BackHow should I invest in order to meet my long-term goals?
For generating a corpus for your children, ₹1 crore today would translate to ₹3.2 crore in 20 years (assuming a 6% inflation), and will need an investment of ₹33,000 a month (assuming a 12% long-term portfolio return)
PremiumI am 34-years-old, have no children and plan to retire around 55-58 years of age. As of now, I have savings of ₹9 lakh and invest in the following SIPs:
₹10,000 each in Parag Parikh Flexi Cap fund , Axis Small Cap Fund , ICICI Pru Technology Direct Fund and PGIM India mid-cap opportunities fund.
I have also invested ₹120,000 in NPS (National Pension System), ₹200,000 in ELSS (equity linked savings scheme), and have a term insurance of ₹1 crore each for me and my wife till the age of 75 years, besides a ₹10 lakh family floater health insurance.
Now, I need the corpus for these: A sum of ₹1 crore for two children in the future, ₹60 lakh (with inflation) for the marriages of the children, and ₹50,000 per month after retirement. I also need money for my dream house (I will redeem ₹25 lakh after 5 years)
How much extra premium do I need to pay to reach my goal?
—Ashutosh Kumar Singh
All but one of your goals are long-term oriented, so I am going to ignore that one short-term goal for the purposes of this planning (the house goal). You can use a combination of your current savings and judicious redemption from your investments to take care of that. For generating a corpus for your children, ₹1 crore today would translate to ₹3.2 crore in 20 years (assuming a 6% inflation), and will need an investment of ₹33,000 a month (assuming a 12% long-term portfolio return). Similar numbers for the other goals are ₹2.5 crore for wedding (in 25 years), requiring a ₹14,000 per month investment, and ₹4.5 crore for retirement, requiring ₹32,000 per month investment. The total monthly investment required would be around ₹80,000 per month to meet all your goals in future. At this time, you are making about ₹65,000 per month on average and that is a very good start. Please create individual investment buckets for each of the goals and segregate your investments for ease of management.
Srikanth Meenakshi is founder, Primeinvestor.in.
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