I’m 41, and I wish to retire at 55 and have a monthly income of at least Rs 3 lakh. What should I do?

I am 41 years old and want to retire by age 55. My current savings are Rs 30 lakh in EPF, Rs 30 lakh in equity, and Rs 8.25 lakh in NPS. The investment I do as follows

1. PF – Rs 41,250 by the employer and same contribution by me as well which combined around Rs 82,500

2. Rs 21,000 monthly SIP, Nippon small cap 6000, axis small cap 6000, quant small cap 6000/- and marae asset large cap 3000/- all started very soon, having a corpus of 2.5L as of today.

3. Investing Rs 21,250 in NPS monthly.

4. Around Rs 50,000 monthly in equity

I have a Rs 50 lakh home loan, which I have planned to get rid of by 2028. I have another home loan, which will be closed by the end of 2025.

I have a daughter who is doing CA, and for marriage, it will require around Rs 1 crore. I have a son who is going to pursue medicine, which will cost me Rs 50-75 Lakh. How can I plan my retirement to get at least Rs 3 lakh monthly by the age of 55? My current monthly take-home salary is around Rs 3 lakh.

Reply by Rajiv Bajaj, Chairman & MD, BajajCapital Ltd.

Understanding an investor’s financial landscape, including their investment horizon, risk tolerance, and goals, is crucial in tailoring an effective investment strategy. Based on the provided information, your monthly investments in mutual funds and equities total approximately Rs. 71,000, contributing to a combined savings of around Rs 70.5 lakh in EPF, Equity, NPS, and Mutual Funds.

We recommend a strategic adjustment to your investment approach. Once one of your home loans is concluded in 2025, consider reallocating those funds to increase your monthly SIP in mutual funds. This proactive step will significantly contribute to building a robust corpus for your retirement.

While the goal years for your daughter’s marriage and son’s higher education have not been specified, assuming a requirement of approximately Rs 1.6 crore in the next 6-7 years, it’s prudent to substantially increase your monthly SIP in mutual funds. This augmentation is vital to ensure the availability of a substantial corpus when needed.

An analysis of your current mutual fund portfolio reveals a tilt towards small-cap schemes, which may not be advisable for optimal diversification. Ideally, a well-balanced portfolio should span different categories, including Large & Mid Cap, Flexi Cap, Mid Cap, and Small Cap. To achieve this balance, consider diversifying your investments across the following recommended funds:

1. HDFC Large & Mid Cap Fund

2. Franklin India Flexi Cap Fund

3. HDFC Mid Cap Opportunities Fund

4. HSBC Small Cap Fund

This diversified approach aims to enhance your portfolio’s resilience and better align it with your financial goals.

(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)

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