Ask Money Today: Where should I invest to create corpus of Rs 10 crore for my retirement?

I want to invest to save for my retirement. I am 46 years old. I want to build a corpus of Rs 10 crore for my retirement. I have already accumulated around Rs 45 lakh. I can invest Rs 35,000 per month. Please advise some good equity funds. I can take risk for five to seven years and then would prefer to move to safer equity funds like large caps or balanced funds. Is it possible to achieve this target? Should I invest more? Where should I invest? Please give me good schemes.

-Pritish B.

By Raghvendra Nath, MD, Ladderup Wealth Management

To achieve corpus of Rs 10 crore with monthly SIP of Rs 35,000 till age of retirement (assuming 60 years), you will need annual return of approx. 30 per cent, chances of achieving the same are kind of slim given we have already seen a major bull run from the month of April. With current SIP of Rs 35,000 plus Rs 45 lakh of existing corpus, you will accumulate corpus of around Rs 3.7 crore by the age of retirement. To achieve your required corpus, either you need to increase your monthly SIP to Rs 1.81 lakh or go aggressive in your portfolio and take higher risk, which will increase volatility in your portfolio. 

Given the current amount I would recommend you to start the SIPs into mid and small cap funds instead of the large cap space as currently they are better placed in terms of relative valuations. You can also look to reshuffle your existing portfolio with an asset allocation mix of 25/50/25 spread into the large mid and small cap categories respectively. Shifting to this strategy should place you a bit closer to your goal requirements. However, accumulation of wealth even at this rate wouldn't suffice your specified retirement corpus.  

I would recommend you consult a financial advisor to understand your retirement corpus requirement based on your income and expenses as I believe the retirement corpus is a bit overstated. If that is not the case I believe you need to keep a track of your expenses and increase your financial investments as your investment corpus isn't reflecting your current lifestyle expenses.

(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)

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