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POSTED BY ON April 24, 2011 10:10 pm COMMENTS (6)
I am 25 years old and I want to retire with a corpus of Rs 4 crores, I want to start a SIP in a index fund for my retirement, The SIP amount with be 5000 and I want to retire after 30 years. So I have the following questions.
1. Will I be able to reach my goal.
2. What index fund should i invest in, I am planning to invest Rs 4000/- in nifty and the remaining Rs 1000/- in nifty junior.
3. Since the corpus will grow is a good idea to divide the sip amount into half and invest in funds from two fund houses.
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Please add next 5000 to your previous funds, Increase the value of SIp, then you can wothdraw for your house fom itself. Do not add funds for the purpose.
Thank you, for all the replies.
@Ramesh, As you mentioned, I am looking forward to increase my investment by 10% every year.
@MoneySavingsHelp: I already invest Rs 2000/- in HDFC top 200, Rs 2500/- in DSP BR Top 100, Rs 1000 in Reliance RSF Equity and Rs 2000/- in IDFC premier equity. I am investing the amount to fund the initial payment of a flat which i am planning to purchase after 5 years.
So should i just add on Rs 5000 to these funds.
@arbfinancials: Like ramesh has put out, my current financial lifestyle are on similar lines.
Thank you once again.
Dear Santosh,
This is the right time when you can think of creating a big corpus.
How ever i would like to ask you a few questions which are important to understand your requirement of Retirement fund.
1. What your Goal is ? Had you quantified it ?
2. If not when you are planning to retire ?
3. What is your todays Expenses ? What was that 5 years before ?
4. What type of Std. of living you want to have after retirement ? Maintain or Upgrade or Compramise ?
…………………. Th
I am interested in how you tackle and advise. On Santosh’s behalf, I will answer them:
1. Goal=Retirement. Approximate quantification:- 4 crores.
2. Planning to retire after 30 years, near age of 55 years.
3. Expenses on an average about 20k. 5 years ago, was non-employed and living with parents, so there is no reasonable value of that.
4. Mild upgradation. Atleast no compromise.
Assuming return @15% p.a. on an average, in 30 years, the corpus would be approx. 2.8 crore. So, you need to increase your SIP amount little bit more viz. Rs.7000 pm.
Secondly, do not invest in index funds. Equity diversified funds generally outperforms index funds with great difference. You should divide the amount in
Reliance Regular Savings Fund – equity
HDFC Top 200 Fund
HDFC Equity Fund
IDFC Premier Equity Fund
Review your portfolio atleast 1 in a year and invest more in down market.
Hope it will help you.
InvestmentKit.com
1. 5k per month for 30 years:
without any increment @ 12% per annum = 1.3 crore.
with increment of 10% per annum and return of @12% per annum = 4crore.
so the main point here is Increment @10% per year diligently, may get you to the goal. Even if you calculate the long term return of 12% per annum. 🙂
2. Whatever you choose as the vehicle, you should remain in equities.
3. Choose convenience over “trying to maximize the return”. If you feel more comfortable in having invested in 2 funds, be it.
Other ideas:
Because of the greatly skewed nature of the present indices (Nifty, Sensex) and the relatively large FMC of the passive funds, it is a better idea to have a well-managed active fund. But in the end, it is your choice. 🙂