The ideal way to plan for retirement is to invest early. Longer the tenure, higher the compounding benefits. A monthly C of Rs 20,000 for 30 years at a growth rate of 12 per cent can build a corpus of Rs 7 crore. A delay of five years, the corpus reduces to Rs 3.76 crore (46 per cent less) with just a reduction of Rs 12 lakh in total investment.
Retirement is a combination of two phase accumulation before retirement and utilisation after retirement. Once you retire, you can divide the expenses into different categories and then decide the towards mandatory expenses, funding goals (if any) and for discretionary expenses. The discretionary expenses could have 25-25 per cent equity exposure. This recommended investment pattern will help in generating better risk adjusted returns.
Advertisement
Portfolio conceptualised by:
Sudipto Roy, MD, Principal Retirement Advisors, India
Just one email a week