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    Will these mutual funds help me create Rs 5 crore for my retirement?

    Synopsis

    If you have any mutual fund queries, message ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

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    My goal is retirement in 25 years. I want to build a corpus of Rs 5 crore. Currently, investing Rs 30,000 per month and plan to increase 10% every year.

    Risk profile is moderate to aggressive. My mutual fund portfolio is:

    Motilal Oswal Multicap 35 Fund: Rs 12,000
    Canara Robeco Equity Hybrid Fund: Rs 8,000
    ICICI Prudential All Seasons Bond Fund:Rs 5,000
    ICICI Prudential US Bluechip Equity Fund: Rs 2,500
    DSP World Gold Fund: Rs 2,500
    I also have Rs 2 lakh in SBI Savings Fund which I have kept as an emergency fund.
    Do let me know how to optimise.
    -Shilpa

    Assuming an annual return of 12%, you need to invest around Rs 26,000 per month to create Rs 5 crore in 25 years. However, do not be overjoyed. A nice round figure like Rs 5 crore may not be enough to retire comfortably. You need to work with real numbers. For example, your living expenses, impact of inflation on it after 25 years, tax outgo from your investment returns, among others to calculate a realistic target for your retirement corpus. You can use an online tool for it or seek the help of a investment advisor or financial planner. However, stick to good financial practices like maximise your savings (at least 30-40% of your income), invest at least 30%, and so on. They will help you to meet your various financial goals.

    You have not mentioned your risk profile in your message. So, it is not possible to offer you a personalized advice. However, a quick look at your mutual fund portfolio reveals that it lacks focus. It is not clear why you have used a bond fund to take care of your long-term goal like retirement. In fact, 1/3rd of your portfolio goes towards bond fund, overseas fund, and gold. Is it a conscious decision to diversify and reduce the overall risk in your portfolio? If so, you may continue with them. However, you need to reduce the expected return from your portfolio. If you have chosen them without too much care, you need to revisit your portfolio and make sure that it is in line with your risk profile.

    If you are not sure about the basics of investing in mutual funds, you must consult an investment advisor or a financial planner if you want a plan. It is always better to have a sharply focused portfolio based on your goal, investment horizon, and risk profile. Such a plan ensure that you meet your goals without fail.

    Things You should consider
    • Annualized Return
      for 3 year: 15.35%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 4.1 Years
    Things You should consider
    • Annualized Return
      for 3 year: 4.02%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.10 Years
    Finally, it is always better to keep your emergency funds in a bank account or liquid funds.

    (If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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