I am a 53 year old professor and plan to work till the age of 60. After retirement, I want to devote some time to social causes. For this I would like to create an adequate retirement corpus. I have 38 Lakh currently in the following Mutual Funds (MFs) – Parag Parikh Flexi Cap, PGIM India Midcap Opportunities, Mirae Asset Emerging Bluechip, Canara Robeco Emerging Equities, Mahindra Manulife Multi Cap Savings Scheme and ITI Multi Cap Fund. I have 10 lakh in Public Provident Fund (PPF). Is this enough for my retirement? my monthly expenses are 40,000. Should I withdraw money from PPF and invest in mutual funds or expand PPF account?
Name withheld on request
To you 1.43 crore for your monthly retirement expenses if we consider an inflation of 6% per annum. This will enable you to make withdrawals for monthly expenses from the first month of your retirement.
Your existing investments in Mutual Funds and PPF will help you build a corpus 90 lakhs if we assume 10% p.a. return from MF and 7.50% from PPF. Despite this, you still need an extra 53 lakhs to get the retirement fund. Since you have another seven years to retire, you can consider investing through MFs to achieve this, with a monthly Systematic Investment Plan (SIP). 44,000 in Equity MF.
You can also expand your PPF account and continue investing in it as it will also act as a diversification to your overall portfolio.
For MF portfolio, most of the funds you are investing in have done well for their investors and you can also invest SIP for your retirement in these funds. However, you may like to look at ITI Multicap Fund from another investment perspective. You can consider SBI Large & Mid Cap or IIFL Focused Equity Fund as an alternative, as these funds have performed well across market cycles.
Harshad Chetanwala is the co-founder of MyWealthGrowth.com.
catch all business News, market news, today’s fresh news events and Breaking News Update on Live Mint. download mint news app To get daily market updates.