Comments
I am 35 years old and my monthly income is Rs 40,000. I invest Rs 5,000 a month in mutual funds and Rs 15,000 in a few ULIPs. My monthly expenses are Rs 15,000. In insurance, I save Rs 15,000 a year in a pension plan and the rest in ULIPs. Are my savings enough for retirement? All these investments were started three years back. I have health cover from my employer. I have term insurance cover for Rs 15 lakh. My only dependent is my wife.
I have invested Rs 7 lakh in FD and have Rs 3 lakh in EPF.
My concerns are:
Is it better to buy a flat or construct a house? Since I am in a transferable job, I will let out this property. In my bank I will not get any concession on interest rates.
I am investing in ULIPs and MFs to earn at least 14 per cent return. Is that possible?
I wish to retire at 45. I do not have pension benefits from my employer. How much do I need to accumulate to live comfortably?
— Shiddu
If you are planning to eventually settle down in the property closer to retirement, it is prudent to buy a piece of land, preferably a little more than what you may require. The inflation on the construction cost can be hedged with land. At the time of retirement you can sell one part of the land to meet the construction cost. For the incremental cost you can accumulate through equity.
If your return expectation is 14 per cent, you need to book profits once you reach your target. Restrict yourself to one Gold ETF. We presume that a majority of the ULIPs that you hold are equity oriented. ULIP, being a long-term product, can earn good returns if you stay invested for at least 10 years.
You need to have Rs 1.04 crore at retirement, considering an inflation of seven per cent. To meet your monthly needs till 80 your investments should earn one per cent over and above inflation. To reach such a target you should save monthly, a sum of Rs 45,200. Given your present income, it will be a tall order. But if you wish to postpone your retirement to 55, you need to have a corpus of Rs 1.53 crore. To reach the target you need to save monthly a sum of Rs 15,500 including your EPF contribution.
(The author is CEO, >myassetsconsolidation.com )
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.