Home / Money / Personal Finance /  What is the corpus that I should target for retirement?

I am a 53-year-old professor and plan to work till the age of 60. After retirement, I would like to devote some time to social causes. For this, I would like to create a sufficient retirement corpus. I have around 38 lakh at present 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 Badhat Yojana and ITI Multi Cap Fund. I have close to 10 lakh in public provident fund (PPF). Are these sufficient for my retirement? My monthly expenses come to 40,000. Should I withdraw money from PPF and invest in MFs or extend the PPF account?

—Name withheld on request

You could need a corpus of 1.43 crore for your monthly retirement expenses if we consider inflation of 6% per annum. With this, you will be able to withdraw for monthly expenses from the first month of your retirement.

Your present investment in MFs and PPF will help you build a corpus of 90 lakh if we assume a return of 10% per annum from MFs and 7.50% from PPF. Despite this, you still need an additional 53 lakh to achieve the retirement corpus. Since you have seven more years to retire, you can consider investing through MFs to achieve this, with a monthly systematic investment plan (SIP) of 44,000 in equity MFs.

You can also extend your PPF account and continue to remain invested in it as this will also work as a diversification in your overall portfolio.

As for the MF portfolio, most of the funds you are investing in have done well for their investors and you can invest the SIP for your retirement in these funds as well. However, you may like to relook at ITI Multicap Fund from a further investment perspective. You may consider SBI Large and Mid Cap or IIFL Focused Equity Fund as an alternative, as these funds have performed well across market cycles .

Harshad Chetanwala is co-founder at MyWealthGrowth.com.

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