Investment Tips: If you want a monthly income of Rs 1 lakh, then know where you should invest.
Investment Tips: Everyone wants to have a comfortable life after retirement, but for this, a large sum of money is required. People deposit money according to their capacity. Many people even deposit crores of rupees. But they want that he can earn Rs 1 lakh monthly from this. But it is not known where to invest one crore rupees so that it can get a monthly income of one lakh rupees. Remain confused about this. Let us know how to achieve this goal. A monthly income of Rs 1 lakh or Rs 12 lakh annually requires a 12% return on the invested amount, the Economics Times quoted Prableen Bajpai, founder of FinFix Research and Analytics, as saying.
Invest in hybrid funds
According to Bajpai, considering your comfort with moderate risk, consider investing in two hybrid funds and choose a systematic withdrawal scheme (SWP). Balanced Advantage and multi-asset funds typically deliver 10-12% long-term average returns, across equity, debt, and gold. SWP benefits include lower tax liability on principal withdrawal, favorable taxes compared to fixed-income investment products, and potentially positive real returns over time despite equity exposure. Assuming a monthly withdrawal of Rs 1 lakh, a fund of Rs 1 crore can last for 15 years with 10% returns. The fund can last for nine years with withdrawals increasing to adjust for 6% inflation. Reduce monthly withdrawals to Rs 60,000-70,000 to ensure sufficient funds for 15-18 years. Apart from this, give priority to health insurance and emergency fund.
Choose from different categories of equity
He said that personal finance and investment depends on individual needs, preferences and risk tolerance. However, it is important to follow the basic principles. If you are comfortable with high-risk investments then allocating 100% to equities through mutual funds and stocks leaves no buffer zone. At around age 60, it prescribes a 40% equity allocation, which is much lower than your planned allocation. Consider different approaches and earmark 25-30% for fixed income and the remaining for equities across various categories. Regular inflation-adjusted income during retirement should be a top priority. Use large caps for systematic withdrawal schemes and include a hybrid fund to reduce volatility. Allocate around Rs 5 crore for expenses based on moderate return expectations.
Consider low-risk options as well
Create a fixed income bucket with debt funds including RBI floating rate bonds for income generation and target maturity funds to manage expenses during market volatility, he said. Keep a reserve of Rs 50 lakh in low-risk options like fixed deposits, liquid funds or arbitrage funds for medical emergencies and unexpected needs. Allocate the remaining amount into the growth bucket, which includes a mix of active and passive funds across market cap and direct equities for long-term and future needs. Plan your wife's fund allocation upon retirement for a clear portfolio position. Prioritize wealth sufficiency during retirement rather than building wealth for the next generation. Make a realistic plan assuming achievable returns.
Diversify in Equity Mutual Funds
To grow your money and beat inflation, consider diversifying into equity mutual funds through SIP, said Rushabh Desai, founder of Rupee with Rushabh Investment Services, as reported by the Economics Times. Assuming retirement at the age of 60 with monthly expenses of Rs 40000 (estimated to be Rs 96,000 with 7% annual inflation rate). Considering a life expectancy of 85 at 7% inflation rate, a fund of Rs 4-5 crore will be required till 60. And 5% returns may reduce your existing investments. Redirect some funds from fixed income to equity mutual funds through monthly SIPs of Rs 50,000-60,000, aiming for a combination of flexi-cap, focused and mid-cap funds. Allocation consideration for Parag Parikh Flexi Cap Fund (20%), ICICI Prudential Value Discovery Fund (20%), DSP Flexi Cap Fund (20%), SBI Focused Fund (20%), and Edelweiss Mid Cap Fund (20%) Do it. Alternatively consider a Dynamic Asset Allocation fund combining equity and debt for lower risk. Such adjustments can help bridge the gap and build an adequate retirement fund.
(Disclaimer: This article is only for information, if you want to make any kind of investment then take advice from experts)