I am 55 and currently an NRI. I am due to retire in 2021. I have a son aged 11 years. I have no pension. Please give suggestions on how I can reach my goals before retirement. After retirement I need ₹50,000 to meet monthly expenses. I can invest up to ₹50,000.
Subecha
If you wish to meet all your goals, it is advisable you hang up your boots in 2021. You need to invest ₹1.47 lakh a month for the next 60 months. Retirement being a medium-term goal, you need to build a portfolio that can earn 9.5 per cent. Since the rest of the goals are long-term in nature, you can try to earn 12 per cent return. But since your earning life is five years, you should build a corpus during that period.
For meeting the needs of your son, you need ₹50 lakh. If a sum of ₹25.3 lakh is invested for six years and it earns 12 per cent per annum, this amount can be earned. If you invest a sum of ₹31,000 for the next 60 months and if the portfolio earns 12 per cent return you will be able to reach the target of ₹25.3 lakh. For his marriage the present value of ₹10 lakh will be ₹29.5 lakh if inflated at 7 per cent for 16 years. If you invest a sum of ₹10,400 a month for the next five years it will account for ₹8.5 lakh. Afterwards if you continue to hold it for the next 11 years you can reach the target.
Retirement: To receive inflation adjusted monthly income of ₹50,000 at retirement, you need to have a corpus of ₹1.41 crore at 60. If you earmark your fixed deposits and if it earns post-tax returns of 7 per cent after 5 years it will account for ₹60.3 lakh.
To meet the shortfall you need to save a sum of ₹1,06,000 a month for the next five years and it should earn a return of 9.5 per cent. Invest 50 per cent in equity mutual funds and the rest in debt instruments.
The writer is a financial planner and founder, myassetsconsolidation.com
Send your queries to blinefp@gmail.com
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.