Will Rs 6 crore be enough for my retired life? Or should I invest more?

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I am 32 years old, and married. I have an eight-month-old child. Since November 2018, I have been investing Rs 30,000 per month via SIP in these mutual funds:
Mirae Asset Emerging Bluechip Fund: Rs 20,000
L&T Emerging Businesses Fund: Rs 10,000

I have high risk appetite. I am investing for my daughter's education and my retirement. I plan to retire by 2035. I can increase my SIP by 10% every year, starting from 2020. I want to build a corpus of Rs 6 crore in 15 years. I haven't included my future medical expenses.

Right now, I pay Rs 37,000 every month for my housing loan (till 2028) and Rs 38,000 for another house loan (till 2024).

Right now, I see around Rs 60,000 as household expenses every month, apart from the loan repayment. Also, I have a term insurance cover of Rs 1 crore, till I reach 60 years.

So my queries are:
Will a corpus of Rs 6 crore be sufficient for my retirement by 2035 and my child’s higher education? If not, how much more do I need to invest both in terms of time and money?

Also, I understand more schemes would dilute the returns a bit. So, kindly suggest the best possible combination of funds to achieve my goals?
--Sudhir Varma Kammili

Rishabh Parakh, Founder, Money Plant Consultancy, responds:

As you have a high risk appetite, both the schemes you have chosen are good.

Your current investment of Rs. 30,000 per month, with an increase of 10% every year, will provide you a corpus of around Rs 3 crore by 2035, assuming an annual return of 14%.
  • 16.38%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 2.6 YearsTime taken to double money
  • 8.27%Annualized Return for 3 year
  • >3 years Suggested Investment Horizon
  • 2.6 YearsTime taken to double money

You have not mentioned the amount you need for your daughter’s education and you are talking about an early retirement. So, considering these facts, Rs 6 crore may not be sufficient. The sufficient amount depends on your overall financial planning, current income and asset base and the future expenses.

Your current expenses of Rs 65,000 per month if increased by 10% every year, will be around Rs. 2.25 lakh per month after 15 years. So the corpus generated by then will be consumed in the next 17-18 years starting from 2035.

You should plan to build a corpus of at least Rs. 15 crores. If we add the value of your land which will be available for use in future, then the said target amount will change.

You can also increase the SIP after 2024 and 2028, after you end your home loans. It will help you to build the required corpus for retirement.

Also, plan for your health and life insurance cover, based on your lifestyle and goals.
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