Retirement planning: Can you retire with Rs 10 crore corpus in your early 50s? Here's what experts say

I’m 32 and earn Rs 18 lakh a year, while my monthly expenses are Rs 55,000. I have a mutual fund SIP of Rs 17,000 and invest Rs 20,000 a month in a recurring deposit. I, along with my employer, contribute Rs 27,000 a month in the NPS. My investments include Rs 13 lakh in mutual funds, Rs 4 lakh in shares, Rs 10 lakh in FD/RD, and Rs 20 lakh in the NPS. I have a term insurance of Rs 1.5 crore and Rs 15 lakh health cover. I want to retire in early 50s with a Rs 10 crore corpus. How can I achieve this?

Rushabh Desai Founder, Rupee With Rushabh Investment Services: You are saving around 40% of your monthly salary and have decent investments. Assuming 12% CAGR in equity (stocks, mutual funds) and 6-7% CAGR in fixed income (assuming NPS is in fixed income), your existing and monthly investments will give Rs 6.5-7 crore (pre-tax) after 20 years. To achieve your goal of Rs 10 crore, you will need to do the following: ? An annual top-up of 10-15% on the existing mutual fund monthly SIP amount. ? Instead of investing in a recurring deposit, consider ultra short-term and low duration mutual funds for better yields. These are open-ended funds and will provide liquidity as well. ? Choose the ‘auto’ option in the NPS as this will help you get exposure to equity, which will boost returns. All these measures should be taken on the basis of your risk appetite and financial situation in life. If you don’t want to take excessive risk, you could extend your retirement age till 60. With increasing life expectancy and inflation, it is not advisable to retire early.

I’m 35 and married, with a four-year-old child. Over eight years, I’ve built a mutual fund portfolio of Rs 65 lakh at 22% CAGR. I also have Rs 15 lakh in stocks, Rs 10 lakh in fixed deposits, Rs 14 lakh in the EPF, and Rs 3 lakh in the NPS. I invest Rs 40,000 a month via SIPs, Rs 50,000 a year in the NPS, and Rs 60,000 a year in corporate NPS. My monthly expenses are Rs 50,000. I have a Rs 2 crore term plan and Rs 50 lakh health insurance. Is my retirement planning on track?

Adhil Shetty CEO, BankBazaar: Your retirement corpus should ideally be 300 times your average monthly expense at the time of retirement. So, if you are planning to retire in 10 years, consider your current expense and calculate how much it will rise by the time you retire, assuming 8% inflation. Then work to build a corpus that’s 300 times your projected monthly expenses. Assuming 12% growth for all your investments in the next 10 years, your corpus would be nearly Rs 4.4 crore, while your monthly expenses would be around Rs 1 lakh. Assuming 4% annual withdrawal, this should be enough to retire comfortably in 10 years. These calculations do not include investment for any other goal, such as child’s higher education. Inflation in education can be as high as 12-15%, and you would need to save separately for this goal.

Ask our experts
Have a question for the experts? etwealth@timesgroup.com