How much should I invest to build a retirement corpus of Rs 1 crore?

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I am 37 years old. I have been investing Rs 2,000 each in four mutual funds for the last two years: ICICI Prudential Large & Mid Cap Fund, DSP Midcap Fund, HDFC Hybrid Equity Fund, and Mirae Asset Emerging Bluechip Fund.

For the last three years, I have been investing Rs 25,000 every year in PPF.

It is not possible for me to invest more, but I require Rs 50 lakh for my child’s education (he is just 14 months old) and Rs 1 crore for my retirement. How can I achieve these goals? I also want to prepay my home loan which I took last year. I am currently paying Rs 20,000 every month as EMI for the home loan. I have an emergency fund of Rs 3 lakh.
---Nakul Lakhe

Subir Jha, Founder, Buckspeak, responds:

Goal-based approach is one of the best ways to invest in mutual funds. Let us target each goal separately: for your child’s education, say, after 17 years, you would need to invest Rs 7,500 per month to create a corpus of Rs 50 lakh, assuming an annual return of 12%. However, it would make sense for you to know the present value of Rs 50 lakh to compare it with today’s cost of higher education.

For your retirement, let us assume that you continue to invest in both PPF and equity mutual funds. Assuming an annual return of 10%, you would need to invest approximately Rs 9,500 every month to achieve your goal of Rs 1 crore when you are 60 years old. Assuming Rs 2,000 per month in PPF, your equity mutual fund contribution would be Rs 7,500 per month.
  • 11.97%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 2.1 YearsTime taken to double money
  • 8.37%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 3.8 YearsTime taken to double money


An emergency fund should be equal to six to 12 months of your monthly household expenses, including your home loan EMIs.

Based on the information provided by you, you would need to invest more to achieve your goals. However, you have already shared your inability to do it immediately. But with every increase in your income in future, you should contribute more towards these goals to reach your target corpus.
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