My age is Rs.32 and my salary is ₹62000/month. Can I meet a retirement goal in 2048?

, Santu Mandal

As mentioned in your question that you want to plan for your child’s education and retirement in the coming 16 and 27 years respectively, you also need to set a target amount to work on it more effectively . Good to know that you have accumulated some assets so far and are willing to invest more than 60% of your income towards these goals in future.

Let us first see how much you will be able to accumulate in both equity and debt investments along with your accumulated and monthly investment amount after 16 and 27 years. If we assume 10% p.a. return on equity and 7% p.a. on other debt, you will be able to accumulate Rs.2.88 crores in 16 years and Rs.9.02 crores on retirement after 27 years. The same investment will help you accumulate Rs. 3.51 crore and Rs. 12.94 crores respectively if we assume equity return of 12%.

While today it is not easy to define what kind of education your child will take in future, it is best to consider a reasonable amount for education at this stage. If we assume that you will use Rs 1 crore for your child’s education after 16 years, you will have around Rs 1 crore. 6.31 crores for your retirement at 10% p.a. equity return and 7.60 cr. at 12% p.a. after withdrawing the amount for your child’s education. This amount of Rs 7.60 crore will help you take care of monthly expenses of Rs 46,000/- per month as per today’s cost assuming inflation of 7% and life expectancy till the age of 85 years. You may have to evaluate whether this amount is enough to take care of your family’s monthly expenses for today’s period. Most of the people while working on their retirement like to aim for Rs 50,000 to 75,000 of today’s monthly expenses.

Would also like to suggest that you consider diversifying your mutual fund investments into 5 to 6 funds and avoid putting all the money in index funds even though index funds are good to invest in. If you want to take limited risk then you can look at higher allocation like 30-40% in UTI Nifty Index Fund and the rest can be invested in actively managed equity funds where there is a need for fund managers to invest in companies. There is scope. Which are ahead of Nifty 50 and generate returns for you. This is also because you have at least 16 years to build the corpus.

, Reply to Harshad Chetanwala, Founder of MyWealthGrowth.com

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