Planning large corpus along with a pension? Here’s how mutual fund SIPs can help

Many government employees rely on pensions for retirement security, but building a sizable investment corpus has become equally important to meet long-term financial goals. With stable income and assured post-retirement benefits, they often have the flexibility to invest through mutual funds.

This is also true for Divya Bhattacharya, a central government employee and viewer of The Money Show on ET Now, who aims to build a substantial investment corpus despite the comfort of a pension.

Bhattacharya currently plans to invest Rs 41,000 through SIPs and is willing to step up her investment by Rs 2,000 every year. However, she is unsure about how to structure her mutual fund portfolio. As it is unclear whether she has already started investing in mutual funds or is planning to begin now, the expert helps her out in both scenarios.


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The good news is that Divya’s retirement income is partly secured through her pension, which gives her flexibility to invest more aggressively for long-term wealth creation.

How much corpus can SIPs create?

The expert, Samir Shah, Founder, Investa Financial, said that when we talk about a large corpus, it means different things to person.

If Divya continues with a Rs 41,000 monthly SIP, increases it gradually, and stays invested for around 10 years, assuming an average annual return of 12%, she could potentially accumulate a corpus of around Rs 1.2 crore. However, there’s a simple tweak that could significantly improve this outcome, the expert said.

Shah recommends that instead of increasing her SIP by a fixed Rs 2,000 every year, she can step it up by 10% annually. This small change can make a big difference, potentially helping her build a corpus closer to Rs 2 crore over the same period.

Portfolio structuring

Since Divya has a stable government job and a pension, she can afford a slightly aggressive but balanced equity portfolio.

Shah said that if she has already invested, then her portfolio should be looking like a smallcap should not have more than 20% of the total investment amount.

The rest she can invest into or the exposure she can take it into midcap kind of funds, and close to 30% to 40% should be in largecap, 20-30% should be in flexicap fund, and the balance 10% if she wants to take exposure into gold or silver ETF or if wanted to invest into a passive kind of fund.

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Shah further added that keeping all this in mind, what he assumes is that as Bhattacharya is a central government employee, one part is pension is already covered, and she has a secure job.

So, considering that she has a room to take little aggressive portfolio and has not yet started investing, Shah recommended a portfolio structure which first includes one flexicap fund that is Parag Parikh Flexicap Fund with a SIP amount of Rs 12,000. Second, a mid-cap fund - Motilal Oswal Midcap Fund, again with a SIP of Rs 12,000.

The third is Nippon India Smallcap Fund with a SIP of Rs 10,000, and for the balance Rs 7,000, Shah recommended starting a SIP in an index fund like UTI Nifty 50 Index Fund. This combination offers a mix of stability, growth, and flexibility, while keeping risk under control.

With disciplined SIP investing, regular step-ups, and a well-diversified equity portfolio, the investor can realistically aim to build a large corpus over the next decade. The pension provides a safety net, allowing the investor to focus on long-term growth without being overly conservative.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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