I’m 57 and work for a private firm. How much should I invest to get Rs 25,000 monthly after retirement?

I am 57 years old and working at a private company. Please advise where I can invest so that I can get Rs 25,000 a month. I have around Rs 50 lakh in my bank account. 

Reply by Mayank Bhatnagar, Chief Operating Officer, FinEdge. 

It is great to see you seriously considering your post-retirement income. The short answer to your question is: you would need around Rs 53 lakh to fund the inflation-adjusted equivalent of Rs 25,000 per month for a 20-year retirement duration. This number considers an average inflation rate of 5 per cent per annum from now for the next 23 years. Do not make the mistake of planning for a static sum of Rs 25,000 for your entire retirement duration, as that would result in a steady drop in your lifestyle year on year. The effects of inflation are usually felt too late, and by that time it usually becomes very difficult to do something about it. 

Having worked for so many years, you would have probably accumulated a sizeable PPF corpus by now. Also, you may have made small investments here and there, which may add up to sizeable amounts. Now is the time to take stock of things, combine everything, get the support of an expert to put things together and plan your retirement goal properly. 

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You only have 3 years to go for your retirement, so taking excessive risks would not be prudent. Instead, you can run a mutual fund SIP in a Balanced Advantage Fund (which is a moderate-risk investment) for the next 3 years, with whatever amount is convenient for you. 

Once you retire, make sure you do not get stuck in an annuity plan by a life insurance company. Instead, invest in a diversified portfolio of mutual funds and set up a robust SWP (Systematic Withdrawal Plan) strategy instead. Besides, you must also invest in the Senior Citizens Savings Scheme and Post Office MIS and get decent returns post-retirement. Remember, you must not take risk investing your money in equity funds at this point in time. Also, a qualified expert can be very helpful in this regard.

(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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