VR Logo

Building a retirement corpus of Rs 2 crore

Equity has the potential to offer superior returns than other asset classes and that is why it is considered the best investment option to fund long-term financial goals

I am a 40-year-old working woman. I would like to have a retirement corpus of around ₹2 crore. I can invest ₹15,000 every month for the next 20 years to build the corpus. Please suggest suitable investment avenues. I also have around ₹25 lakh in fixed deposits which I would like to retain for other personal commitments.
- Monika Tare

You should consider investing in one or two equity mutual fund schemes to achieve a long-term financial goal like retirement. Equity has the potential to offer superior returns than other asset classes and that is why it is considered the best investment option to fund long-term financial goals.

Here is a list of the best diversified equity schemes.

If you invest ₹15,000 month every month without fail for the next twenty years and if your investments earn a return of around 12 per cent per annum, you would be able to build a corpus of around 1.5 crore. You don't have to feel disheartened about the short fall. We have assumed that you are going to invest ₹15,000 every month. This need not be the case. You can always increase your investment as and when your income goes up. It is also equally possible that you may earn more than the assumed rate of 12 per cent on your investments.

Another way to make up for the short fall is to take a closer look at your FD. If you don't need the money within the next couple of years, try to park the money in debt mutual funds to earn better tax-adjusted returns. The basic rule to follow is keep only the money you need immediately in safe avenues like bank deposits. Opt for debt mutual funds to park the money up to five years and invest in equity funds if you don't need the money at least for the next five to seven years. Don't let a huge amount of money in lying in your bank account. Bank deposits hardly beat inflation.

Post Your Query