Pension calculator
Speaking on Ravi's investment goal of ₹1 lakh monthly pension, Pankaj Mathpal, MD & CEO at Optima Money Managers said, "To get monthly pension of ₹1 lakh, my suggestion for Ravi is to develop a retirement fund and invest that in SWP (Systematic Withdrawal Plan). An investor can choose hybrid or conservative hybrid SWP funds that can easily beat the inflation by yielding around 7-8 per cent annual return. However, my suggestion for the investor is to keep inflation post-retirement in mind and assume life after retirement to the tune of 30 years." He said that keeping 6 per cent annual inflation post-retirement, an investor needs ₹2.76 crore fund for SWP to get 1 lakh monthly pension for next 30 years. So, Ravi needs to accumulate ₹2.76 crore in next 30 years to meet his ₹1 lakh monthly pension goal.
Mutual fund sahi hai
On investment tool that may help achieve inflation adjusted ₹1 lakh monthly pension goal, SEBI registered tax and investment expert Jitendra Solanki said, "Generally, an investor requires pension for the period he has earned. So, we plan for at least 30 years post retirement and hence, Ravi requires ₹1 lakh monthly pension for next 30 years post-retirement or up to age 90. As the investor is 30 year old, he has 30 years left to save for its retirement fund. As he doesn't have a big amount in his hand, he should go for the mutual funds SIP as it helps an investor to beat inflation with ease in long term."
15 X 15 X 15 rule of mutual fund
On return that one can expect from a mutual funds SIP of 30 year time-horizon, Jitendra Solanki said, "15 X 15 X 15 rule of mutual fund says that a mutual fund investor can expect 15 per cent return from its mutual funds SIP if the time horizon is 15 years or more. So, a mutual funds SIP of 30 years time horizon may give at least 15 per cent return to an investor."
On how to keep monthly SIP amount at least possible levels, Kartik Jhaveri, Manager — Wealth at Transcend Capital said, "One should increase one's monthly SIP amount with increase in income. It helps an investor to meet one's investment goal with least possible mutual funds SIP amount. If an investor aims to raise ₹2.76 crore in 30 years, he should use 10 per cent annual step up in one's mutual fund investment. This will make the investor to start the SIP with least burden on its monthly budget."
SIP calculator
Assuming 15 per cent annual return from the mutual fund SIP made for 30 years using 10 per cent annual step up, the mutual fund return calculator says that an investor needs to start the SIP with around ₹2,200.
This will help the investor to accumulate ₹2.79 crore. Out of these ₹2.79 crore maturity amount, the investor would be investing ₹43,42,642 over the period of 30 years and the return he or she would get from the investment would be around ₹2,35,94,709.
On SWP plans that one can think of investing ₹2.76 crore for ₹1 lakh monthly pension for next 30 years, Pankaj Mathpal of Optima Money listed out the following SWP plans:
1] SBI Conservative Hybrid Fund;
2] ICICI Prudential Equity And Debt Fund; and
3] Kotak Debt Hybrid Fund.
