I can set aside Rs 10,000 every week to invest in funds and have 9 years left to retirement. I have enough insurance and a pension plan. How can I beat inflation before I turn 70? Where should I put my weekly investment?
-C Ramachandran
You appear to be a wise investor with a reasonable corpus for retirement. You can use your corpus to get inflation beating returns from if you invest systematically. But you should worry about inflation and expenses even after 70, because medical bills and other needs generally soar at that age.
You can accumulate substantial wealth in the available time frame, with reasonable safety if you invest in balanced funds. You should choose two well-rated balanced funds that have a good track record. For instance, a weekly SIP of Rs 10,000 for 9 years amounts to nearly Rs 77 lakh, if your investments earn 12 per cent annually.
Make your weekly investment in these funds. This will also be tax-efficient because balanced funds invest more than 65 per cent in equity, and gains from investments held over a year are tax free.
This article was originally published on December 13, 2013.
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