Retirement planning: Defer retirement to build sufficient corpus

Not many investors know whether they have invested in the right funds and if their fund portfolio is on track. The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures. The advice given is based on the performance of the funds, the risk profile of the investor as well as his financial goals.

Dinesh Rastogi is saving for his child’s education and retirement. Here’s what the doctor has advised.

PORTFOLIO CHECK-UP

• Has been investing in equity funds for the past 7-8 years.
• Funds are a mix of good, average and poor performers.
• Has not been reviewing portfolio, leading to suboptimal returns.
• Retirement income target of Rs.1.2 lakh a month—30% of current monthly income of Rs.4 lakh—is low.
• Despite low target, early retirement at 46 is not possible given the current corpus.
• Defer retirement by five years (51 years) to build a corpus that will last 35 years.
• Monthly investments will have to be hiked by Rs.50,000 to Rs.1.75 lakh. SIPs will also have to be increased by 10% every year.
• Portfolio is skewed towards equity. Need to invest in fixed income.
• Many mid-cap funds in portfolio. Be ready for volatility.

Note from the doctor

• In the NPS, opt for a balanced allocation to equity and debt funds.
• Open PPF account to build tax-free corpus with fixed income.
• Both should buy insurance of at least Rs.2 crore each to safeguard their goals.
• Review investments and rebalance at least once in a year.
• Reduce risk when goal is near so that you don’t miss the target.

WRITE TO US FOR HELP
If you want your portfolio examined, write to etwealth@timesgroup.com with ‘Portfolio Doctor’ as the subject. Mention the following information:

• Names of the funds you hold.
• Current value of the investment.
• If you have SIPs running in any of them.
• The financial goals for which you invested.
• How much you need for each financial goal.
• How far away is each goal.