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I want to know how can I get Rs. 2 Crores on my retirement

I am a central Govt. employee, aged 36 years. My annual salary is Rs. 6 lakhs. I am married. I have one kid of 8 months old. I want to know how can I get Rs. 2 crore on my retirement. Presently I had done the following investments: 1. LIC = Rs. 30K yearly, 2. HDFC Term Plan = Rs. 13K yearly, 3. PPF = Rs. 24K yearly, 4. Sukanya = Rs. 24K yearly, 5. NSC = Rs. 15K yearly?

Aug 30, 2016 by SSS, Banaglore  |   Retirement Planning

You have not shared complete picture of your investments and also your employment details including EPF and retirement age etc.

Therefore, we will not be able to answer the query in details. However, presuming that your retirement age is 60 and that after 24 years you want to have 2 Crores, we will focus on this aspect only.

We have also assumed that the investment in LIC policy and term plan of HDFC life is for insurance purposes and Sukanya Samriddhi Scheme is for your girl child. Therefore, only your annual investments of Rs. 24,000 in PPF and 15,000 in NSC can be taken into consideration for target corpus of 2.00 Crores on your retirement after 24 years.

Your investments of Rs. 24,000 per year in PPF can accumulate to Rs. 16 Lakhs at age 60 assuming that you continue to invest every year from this year onwards till age 60 and the average return is around 8%. Similarly, your investment of Rs. 15,000 per annum in NSC can accumulate to approx Rs. 10 Lakhs at age 60 assuming that you continue to invest every year from this year onwards till age 60 and the average return is again around 8%. Therefore, if you continue the current investments in NSC and PPF, you can accumulate Rs. 26 Lakhs only at your retirement!

To accumulate an amount of 2.00 Crores, you should invest through SIPs in diversified equity mutual funds. Investing in mutual funds can get you the best returns compared to any asset class.

An investment of only Rs. 7,000 per month can help you accumulate the balance corpus of Rs. 1 Crores 74 Lakhs (2.00 Crores minus 26 Lakhs accumulated through NSC and PPF) at age 60, based on 15% return assumption from diversified equity funds. Please check the Diversified Equity Fund SIP Returns from here.

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