Getty ImagesI am a working professional, earning Rs 1 lakh per month. The household expenses are taken care of by my husband. I want to build a retirement corpus for myself and currently have Rs 40 lakh in savings. With a monthly income of Rs 1 lakh and 12 years left for retirement at 60, I want to know how I should invest to build a corpus of Rs 4 crore. I also want to know about different investment options like debt and equity. Is there any workshop where I can learn more and clarify my doubts about investments? Please help me plan my investments effectively.
Rushabh Desai Founder, Rupee With Rushabh Investment Services: Since your husband is managing the household expenses, you can take risk and opt for equity to invest your entire monthly earnings of Rs 1 lakh and savings of Rs 40 lakh to build a retirement corpus for yourself. Assuming 12% CAGR return in equity for 12 years, an SIP of Rs 1 lakh and lump sum of Rs 40 lakh will give you around Rs 4.78 crore (pre-tax). Hence, you will be able to achieve your retirement goal of Rs 4 crore. Assuming that you will be able to take further risk in equity, you can consider investing in a total of five funds, with one each of growth-oriented flexi-cap fund, value-oriented flexi-cap fund, momentum index fund, contra fund and growth-oriented mid-cap fund. This will help you diversify across different market caps and styles, to help your portfolio generate superior risk-adjusted returns. Remember to keep a buffer period of around a year or two at the end of your time horizon, and redeem only in good market conditions to maintain optimum returns. If you are keen to learn about equity and debt investments, you can consider courses from institutions like NISM, BSE and/or NSE. They have a wide variety of course options to choose from. You can also visit their websites for more information.
I work in a private company and invest in mutual funds. My goal is to build a corpus over 20 years and start a Systematic Withdrawal Plan (SWP) when I am 60. To manage market volatility, I plan to shift from equity to debt or fixed-income options before starting the SWP. Which debt fund category or fixed-income instruments are best suited for this purpose, ensuring safety and stability?
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Rushabh Desai Founder, Rupee With Rushabh Investment Services: Volatility is an inherent part of equity markets, and there’s no reason to be alarmed by it. Historically, markets have gone through phases of correction and recovery, and this current dip is no different. In fact, such corrections offer a valuable opportunity to invest at lower levels, allowing you to accumulate more mutual fund units. When the markets recover and enter a bull phase, these additional units can lead to superior risk-adjusted returns. That’s why it’s important to view corrections positively. Given your 20-year investment horizon, it’s advisable to stay invested in quality equity mutual funds across different market capitalisations. This approach will help you build wealth, beat inflation, and support your post-retirement needs. Over time, especially towards the end of the 20-year period, the impact of market volatility will be significantly reduced. As you approach retirement at age 60, you can gradually shift to a more conservative strategy. Consider hybrid funds within the equity savings category, which typically maintain a 15–25% allocation to pure equity. Alternatively, you can invest in high-quality debt funds from the corporate bond category for SWPs. If you still find the volatility of pure equity funds difficult to handle, you may opt for hybrid funds that follow counter-cyclical or valuation-conscious strategies—typically found in the dynamic asset allocation category. These offer a more balanced approach while still participating in market growth.
Ask our experts
Have a question for the experts? etwealth@timesgroup.com
Rushabh Desai Founder, Rupee With Rushabh Investment Services: Since your husband is managing the household expenses, you can take risk and opt for equity to invest your entire monthly earnings of Rs 1 lakh and savings of Rs 40 lakh to build a retirement corpus for yourself. Assuming 12% CAGR return in equity for 12 years, an SIP of Rs 1 lakh and lump sum of Rs 40 lakh will give you around Rs 4.78 crore (pre-tax). Hence, you will be able to achieve your retirement goal of Rs 4 crore. Assuming that you will be able to take further risk in equity, you can consider investing in a total of five funds, with one each of growth-oriented flexi-cap fund, value-oriented flexi-cap fund, momentum index fund, contra fund and growth-oriented mid-cap fund. This will help you diversify across different market caps and styles, to help your portfolio generate superior risk-adjusted returns. Remember to keep a buffer period of around a year or two at the end of your time horizon, and redeem only in good market conditions to maintain optimum returns. If you are keen to learn about equity and debt investments, you can consider courses from institutions like NISM, BSE and/or NSE. They have a wide variety of course options to choose from. You can also visit their websites for more information.
I work in a private company and invest in mutual funds. My goal is to build a corpus over 20 years and start a Systematic Withdrawal Plan (SWP) when I am 60. To manage market volatility, I plan to shift from equity to debt or fixed-income options before starting the SWP. Which debt fund category or fixed-income instruments are best suited for this purpose, ensuring safety and stability?
Also read | I have multiple health insurance policies. How can I split a large claim across different health insurers?
Rushabh Desai Founder, Rupee With Rushabh Investment Services: Volatility is an inherent part of equity markets, and there’s no reason to be alarmed by it. Historically, markets have gone through phases of correction and recovery, and this current dip is no different. In fact, such corrections offer a valuable opportunity to invest at lower levels, allowing you to accumulate more mutual fund units. When the markets recover and enter a bull phase, these additional units can lead to superior risk-adjusted returns. That’s why it’s important to view corrections positively. Given your 20-year investment horizon, it’s advisable to stay invested in quality equity mutual funds across different market capitalisations. This approach will help you build wealth, beat inflation, and support your post-retirement needs. Over time, especially towards the end of the 20-year period, the impact of market volatility will be significantly reduced. As you approach retirement at age 60, you can gradually shift to a more conservative strategy. Consider hybrid funds within the equity savings category, which typically maintain a 15–25% allocation to pure equity. Alternatively, you can invest in high-quality debt funds from the corporate bond category for SWPs. If you still find the volatility of pure equity funds difficult to handle, you may opt for hybrid funds that follow counter-cyclical or valuation-conscious strategies—typically found in the dynamic asset allocation category. These offer a more balanced approach while still participating in market growth.
Ask our experts
Have a question for the experts? etwealth@timesgroup.com
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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