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Business News/ Mutual Funds / News/  How do I target 4 cr retirement corpus in the next 25 years?
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How do I target ₹4 cr retirement corpus in the next 25 years?

To reduce the risk in the portfolio, replace the Nifty Next 50 fund with a short-duration debt fund. Review your funds and portfolio at least once a year.

Photo: iStockPremium
Photo: iStock

I am 35 years old with a moderate risk appetite and have mutual funds (MFs) worth 8.5 lakh and systematic investment plans (SIPs) in the following schemes —Canara Robeco Bluechip Equity Fund, PGIM India Midcap Opportunities Fund and Axis Small Cap Fund ( 5,000 each), IDFC Nifty 50 Index Fund ( 2,000), and UTI Nifty Next 50 Index Fund ( 8,000). My employee provident fund (EPF) contribution is 10,000 per month and the EPF account has 13 lakh. I have been investing in sovereign gold bonds (SGBs) since the last three years. I am also investing 6,000 per month in tier II (aggressive scheme) of the national pension system (NPS), which has a portfolio of 10 lakh. Is this enough to target a 4 crore retirement corpus?

—Nitin Kumar

You can comfortably meet your retirement goals if you continue with the monthly investments across MFs, provident fund, and NPS. Even by conservative return estimates, you should be able to surpass your intent of a 4 crore corpus by age 60. However, do note that the amount required for retirement is influenced by your expense levels.

Currently, 40% of your investment goes towards mid-cap and small-cap funds. This apart, the Nifty Next 50 is also a more volatile index and in the past few years has seen sub-par returns and the bulk of your allocation is here. There is also no debt allocation.

Therefore, increase the amount invested in the Nifty 50 index fund to 8,000 per month. Reduce the amount in the Nifty Next 50 index fund to 3,000 per month and Axis Small Cap to 4,000 per month. Retain investments in Canara Robeco Bluechip Equity and PGIM India Midcap Opportunities at 5,000 each. This will increase the large-cap portfolio allocation to about 52%. To further reduce the risk in the portfolio, replace the Nifty Next 50 fund with a short-duration debt fund. Review your funds and portfolio at least once a year.

Srikanth Meenakshi is co-founder at PrimeInvestor.

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Published: 15 Feb 2023, 10:46 PM IST
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