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How should I invest my retirement corpus worth Rs 60 lakh?

Dhirendra Kumar lays down a retirement plan for an investor

How should I invest my retirement corpus worth Rs 60 lakh?

I'm approaching my retirement and will get a corpus of Rs 60 lakh. Please tell me how I should proceed with the investment plan.
- M Jebakumar

I certainly need more information in terms of income expectations. However, to give a broad-based outlook, I would say that this money should be invested in a manner that it can beat inflation as well as help you derive meaningful returns continually. You should follow asset allocation with at least 30-35 per cent in equity. And make sure that your annual withdrawal is not more than 6-7 per cent of your corpus. That would be around Rs 4.2 lakh.

Further, allocating a third of your money to equity will help increase your income requirement with a subsequent appreciation of capital. If you invest all your money in fixed-income, your capital will remain somewhat constant and 5-10 years from now, your need for higher income in line with inflation will not be met. So, work on asset allocation.

For your debt allocation, you can consider investing in Senior Citizen Saving Scheme (SCSS), Post Office Monthly Income Scheme (POMIS) and the remaining in short-duration funds. By setting up an SWP, you can generate income from the debt portion. You can consider multi-cap funds to get equity exposure and do not tinker with this allocation.

The last guideline that I would like to provide is that although you can invest in fixed-income investments in one go, be mindful of spreading your allocation in equity over a long period of time to eliminate the risk of catching a market high. Also, the pain of interim loss in lump-sum equity investments is very difficult to settle with.

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