Your desire to achieve a steady income post-retirement is commendable. Let’s break this down step-by-step:
- Understanding Your Requirement: You aim to receive 150,000 INR/month (or 18,00,000 INR/year) post the age of 60. Given the average life expectancy and to account for unforeseen circumstances, let’s assume you’d need this income for 25 years post-retirement. This means you’re targeting a corpus of around 4.5 crores INR by the age of 60, which will provide you this income without eroding the principal amount.
- Current Age to Retirement: You have 19 years to build this corpus. But this isn’t just about saving; it’s also about investing prudently.
- Investment Options: Medium-risk options like hybrid funds, large-cap equity funds, and debt mutual funds can be the pillars of your portfolio. These reflect the Roots and Wings philosophy — they balance stable growth (Roots) with the potential for higher returns (Wings).
- Expected Returns: Let’s be conservative and assume an average annual return of 10% on your investments.
- Monthly Savings: To achieve a corpus of 4.5 crores in 19 years with an annual return of 10%, you’ll need to invest around 70,000 INR per month. This is a ballpark figure. Factors like inflation, changes in interest rates, and market performance can influence the exact amount.
- Adjustments: Remember, it’s not set in stone. The investment world, like life itself, is dynamic. Review your portfolio annually. As you progress in your career, your saving capacity might increase. So, adjust your investments accordingly.
- Avoiding Common Pitfalls: Stay clear of high-risk ventures, options, and calls. Avoid leveraging for investments. As highlighted by SEBI, many traders in these areas face significant losses.
- Seeking Expertise: Investment isn’t a one-size-fits-all. A SEBI Registered Investment Advisor can offer tailor-made solutions. Your journey would be smoother with a guiding hand. And if you’re on the lookout, Jama Wealth’s portfolio management services and our investment advisory could be your allies.
The great Indian investor Rakesh Jhunjhunwala once said, “The stock market is a place where if you stay for a day, you will get only the price, but if you stay for a lifetime, you will get the value.” The principle holds true for all investments — a long-term perspective reaps benefits.
To sum up, starting early, being disciplined in your savings and investments, and staying informed are the golden rules. Should you need a co-pilot on this voyage, consider partnering with an investment advisor.
