Will I be able to reach my target if I increase my mutual fund SIP by 6-10%?
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I have 25 more years for retirement and would like to plan for 25 years of retired life. As per my calculation, I would need Rs 7 crore at the end of my 60th year (2044) as retirement corpus. I will start investing Rs 31,500 per month in large cap or multi cap funds for 25 years. Will increasing my SIP value every year by 6-10% help me generate the required corpus?
Kids education and marriage
Starting from 2026 till 2040, I would need varying amounts of money regularly every year for my kids' higher education and their marriage. Should I open different mutual fund folio for each such goal? I am planning to invest Rs 20,000 every month for the next 20 years for these goals again in large cap and multi cap mutual funds, by increasing my SIP value every year by 6-10% . Will it be sufficient?
I already have Rs 1 crore term insurance, Rs 20 lakh sum assured in multiple LIC policies and family floater health insurance. I am assuming 10% inflation for education expenses and 8% inflation for others.
Assuming an annual return of 12 per cent, you need to invest around 37,000 every month to create a corpus of Rs 7 crore at the end of 25 years. Since you are starting with Rs 31,000 and planning to increase it by 6-10%, you will be able to meet your retirement target in 25 years.
You should quantify your various goals separately for your children. It will help you to put together an investment plan to achieve them. You can invest in the same scheme for the goal. Just be mindful about the required investments to achieve each goal.
If you have a moderate risk profile, you may invest mostly in multi cap mutual fund schemes. You may also invest in large cap to diversify and bring down the overall risk in your portfolio. However, be careful about your large cap exposure as the category would offer you only moderate returns.