I am 35 years old and have a moderate risk appetite and have mutual funds (MFs) worth Rs. 8.5 Lakh and Systematic Investment Plan (SIP) in the following schemes – Canara Robeco Bluechip Equity Fund, PGIM India Midcap Opportunities Fund and Axis Small Cap Fund ( 5,000 each), IDFC Nifty 50 Index Fund ( 2,000), and UTI Nifty Next 50 Index Fund ( 8,000). My Employees Provident Fund (EPF) contribution is 10,000 per month and have in EPF account 13 lakhs. I have been investing in Sovereign Gold Bond (SGB) for the last three years. I am also investing 6,000 per month in Tier II (aggressive planning) of the National Pension System (NPS), which has a portfolio of 10 lakhs. Is it enough to target 4 crore retirement fund?
-Nitin Kumar
If you continue with monthly investments in Mutual Funds, Provident Fund and NPS, you can comfortably meet your retirement goals. Even with conservative return projections, you should be able to exceed your intention. 4 crore corpus till the age of 60 years. Note, however, that the amount needed for retirement is affected by your level of spending.
Currently, 40% of your investments go into mid-cap and small-cap funds. Moreover, Nifty Next 50 is also a more volatile index and has seen lower returns over the years and the bulk of your allocation is here. There is no loan allocation either.
Hence, multiply the amount invested in Nifty 50 Index Fund 8,000 per month. By reducing the amount in Nifty Next 50 Index Fund 3,000 per month and to Axis Small Cap 4,000 per month. Stay invested in Canara Robeco Bluechip Equity and PGIM India Midcap opportunities 5,000 each. This would increase the large-cap portfolio allocation to around 52%. To further reduce the risk in the portfolio, replace Nifty Next 50 Fund with Short-Duration Debt Fund. Review your funds and portfolio at least once a year.
Srikant Meenakshi is the co-founder at PrimeInvestor,
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