What is an ideal plan to earn ₹2 lakh after retirement?
PremiumDo start monthly investments for the long term in mutual funds. This will require discipline and an increase in income needs to be channelized for investments
I am 30 years old and in need of financial assistance. I am doing a private job and earn around ₹80,000 per month. I also have a PPF/EPF corpus of around ₹10 lakh. I want to achieve financial independence by the age of 45 years. I am paying EMI of ₹37,000 per month for a home loan. I have a girl child who is three years old. I need your assistance for FIRE (financial independence, retire early) by 45 years. Can you please tell me how I will be free from financial dependency?
—Gnana
You plan to work for the next 15 years. This means that the number of years post active work is much more than your working years, i.e. you work for 15 years to take care of your retired years which could be, let’s say, another 40 years.
You need to provide not only for your retirement but also for your daughter’s education. This will require you to save to the maximum of your ability.
Do start monthly investments for the long term in mutual funds. This will require discipline and an increase in income needs to be channelized for investments.
Do an asset allocation and ensure equity mutual funds are used for long-term investments to provide inflation-adjusted returns.
I am 27 years old and am married. Our combined salary is ₹75,000 per month. We have allotted ₹30,000 for savings. Currently, I am investing in 4 different SIP’s of ₹2,500 each ( ₹10,000 in total), besides ₹5,000 in NPS and ₹5,000 in PPF.
What would be my ideal plan if I have to get a pension of ₹2 lakh per month after retirement, considering inflation to be at 6%?
—Vivek G. Ravindranath
You need to push yourself to be able to achieve the same. It will require discipline in your savings, as well as an increase in salary to increase the savings. Let’s look at the existing numbers of ₹30,000 per month for the next 33 years (retirement at the age of 60 years) will make you accumulate a corpus of ₹1.2 crore approximately and growth at 9% will bring your total corpus to ₹7.4 crore. This translates to ₹3.7 lakh per month at a withdrawal rate of 6%; and considering inflation at 6% means the ₹3.7 lakh will be equivalent of ₹54,000 of today’s time.
This means we need to start increasing the savings amount at every opportunity to augment the savings.
Surya Bhatia is managing partner of Asset Managers.
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