Mutual Funds or NPS for retirement – Next 35 yrs ?

POSTED BY srinivas bandaru ON October 7, 2013 7:04 pm COMMENTS (4)

hi, i am of 25 years age and i want to invest 2500/- per month in mutual funds for next 35 years to get corpus around 2.5 crores. Is this a good idea for retirement planning or else should i opt for NPS?? In what type of MF’s should i invest, either equity or balanced??

i’ll get around 1crore from my company at the time of retirement. And as per company policy, i can get 2.5 lakhs per month as pension from year 2050.

4 replies on this article “Mutual Funds or NPS for retirement – Next 35 yrs ?”

  1. ashalanshu says:

    Dear Srinivas, if all the things stated by you are true, i w’d ask you to invest in MFs only. The reason is you can control your withdrawal from MFs which is not the case with NPS.

    Thanks

    ashal

  2. somasekhararaom says:

    Hi,

    After reading this post, i was unable to control laugh. Sorry to say that. But i think in practical, your calculations are wrong. Because today 5500/- is equals to 2.6 Lakhs in 2050 with the Yearly Inflation 11%. Today 30K is equals to 14Lkhs at that time.

    For Reference, Go through below link. There you can find out Inflation calculator. There no need to enter numbers in “Reduced Amount” Box.

    http://www.buyupside.com/calculators/inflationjan08.htm

    How you expected 7% Inflation for the next 37 Yrs? Always consider CPI, not WPI.

    So increase your Monthly Investments in Mutual Funds. That too choose Small & Mid Cap Funds. They will fetch you higher returns.

    Thanks,
    Sekhar.

  3. srinivas bandaru says:

    Dear Ashal, I had calculated the corpus by using ICICI retirement planning calculator by taking values as total monthly expenses( excluding EMI’s, education, insurance) 30k. plan to retire at 60 yrs. expected inflation rate 7%. Then, At retirement I would require Rs.25623796 (value at retirement) for which I need to save Rs.2271 per month. But then, i am planning for 4 cr corpus expecting inflation rate may go higher. I’ll get 1cr from my company and the pension is guaranteed amount calculated according to my company’s policy.

    Regards
    Srinivas

  4. ashalanshu says:

    Dear Srinivas, how did you reach to a figure that 2.5 Cr. Rs. ‘ll be enough for you in your post retired life? I want to understand the reason/logic of this figure. Is the 2.5L Rs. mly pension gtd. right now for a future date? How?

    thanks

    Ashal

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