How to secure a monthly pension of Rs 15,000?

I want to get a monthly pension of ₹15,000 after five years. I want the pension for the next 10 years. How much I need to invest and in which SIP?
- Pulam

You should have a corpus of around ₹20 lakh to secure a regular income of around 15,000 per month (or 1.8 lakh per year). We have taken a rather conservative return of 7.5 per cent on the investment. This is because you have to invest this amount in a safe and secure avenue like bank deposits or government backed schemes like Senior Citizen Savings Scheme (SCSS), Post Office Monthly Income Scheme, tax-free bonds, etc. Safe avenues don't pay a higher interest. SCSS now pays 9.3 per cent per annum, but you can't assume that the rate would remain the same. So it is always better to play it safe, especially when it comes to retirement corpus.

Since you have an investment horizon of five years, you can consider investing in one or two balanced schemes to create a corpus of around 20 lakh or a little more. (You have to invest around ₹24,500 every month in a balanced scheme and that investments should fetch a return of around 12 per cent per annum for you to create ₹20 lakh.) Here is a list of the best balanced schemes.

This article was originally published on December 17, 2015.