Given your requirement of a fixed monthly income of ₹3 lakhs post-retirement, it’s important to note that your investment approach will depend heavily on the rate of return from your investments. At a basic level, to achieve ₹3 lakhs per month, you would need ₹36 lakhs per year. If we calculate it with the total corpus of ₹83 lakhs you have, it implies an expected return rate of about 43.37% per annum. Achieving such a high rate of return consistently is almost impossible with traditional or even aggressive investment methods. Don’t chase such returns or fall for people who promise them.
For context, most conservative investments (like fixed deposits, government bonds) yield returns in the range of 5-8% per year, and even high-return investment vehicles like stocks or mutual funds may give a consistent 12-15% annual return.
Let’s explore a few options:
- Fixed Deposits: The safest form of investment is in fixed deposits, but these typically yield about 5-7% per annum. At a generous 7%, your ₹83 lakhs would give you about ₹48,000 per month, well short of your requirement.
- Rental Income: If you’re willing to invest in real estate, a rental property could provide a steady income. However, rental yields in India are typically 2-4% per year, and the risk of vacancy or default is not negligible.
- Dividend Yielding Stocks: Some well-established companies regularly pay out dividends. However, dividend yields are typically only around 1-3% in India, and investing solely for dividends can be risky as dividends are not guaranteed.
- Systematic Withdrawal Plans (SWPs) from Mutual Funds: SWPs allow you to withdraw a fixed amount regularly from your mutual fund investments. However, to get ₹3 lakh per month, you would still need a high annual return. Or be prepared to draw from your capital.
- Annuities: Insurance companies offer annuity plans that provide a steady income stream in return for a lump sum investment. However, these too offer returns of around 5-7%.
Before making a decision, I strongly recommend consulting with a SEBI Registered Investment advisor (like Jama Wealth’s Simply Grow) to understand the potential risks and rewards, tax implications, and to construct a portfolio that’s in line with your financial goals and risk tolerance. Remember, at this stage of life, preservation of capital is as important as earning income from it.
