Do I need to plan separately for my retirement?

I am 33 years old. I am planning to start investing through an SIP. My goal is to create wealth for the long term. I want to create a corpus of Rs 60 lakh in 15 years, for child's education and buying a home. I am a government employee. I earn Rs 33,000 per month after a deduction of Rs 6,185 as CPF towards my pension funds. I can invest Rs 10,000 per month for achieving my goal. I may increase my investment when I get an hike in salary. Please advise me how can I invest the money to achieve the desired corpus? Please also advise whether the CPF contribution of Rs 6,185 (employee and employer together) is sufficient for retirement or I need to plan separately for my retirement? I am little bit aggressive investor, would prefer to go for an aggressive portfolio.
--Sukhjeet Singh

If you invest Rs 10,000 per month for the next 15 years, you may be able to build a corpus of Rs 50.46 lakh. We have assumed an annual return of 12 per cent on your investments. Since you would be increasing your investments after hikes in salary, you would be able to create your target corpus.

However, you should relook at the target of Rs 60 lakh you have set for yourself. Have you worked with real numbers? If no, find out the value of your goals currently, and then inflated it by 5-6 per cent to reach a realistic figure. This would ensure that you meet your goals without fail.

It is not clear whether you qualify for a lifelong pension. If so, you need not worry too much about your retirement. Still, you should try to invest as much as you can to create a bigger retirement corpus to fool proof yourself from any kind of eventuality. Even if we assume that you make an annual return of 6 per cent on your CPF contributions for the next 25 years, you would be able to create a corpus of only Rs 43 lakh. It is highly unlikely that you would be able to pocket 6 per cent returns as rates are likely to drop in future. As you would know, Rs 43 lakh will not count much after 25 years.

Here is the link to our recommended equity mutual fund SIP portfolios. Choose a portfolio based on your risk profile and SIP amount. Don't go by your risk perception, take an online risk tolerance quiz to be sure whether your perception is correct.


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