This is a couple who does not understand debt funds but was looking for a safe, long-term fixed return investment. – Time in hand for retirement (assumption) = 5 Years. He has various other ways of reaching the Section 80C limit of Rs 1,50,000 (interest paid on home loan, tuition fees of children, life insurance premium and contribution to Employee Provident Fund). I plan on retiring in 2 years (at age 47 years) and moving to India for good. to achieve annual income equivalent to 10.5 lac in today’s value. One must be careful while answering this question. Is this not overstreching the corpus requirement. In his case, a PPF would not help but investing in an equity linked savings scheme, or ELSS, would be a better tax investment. Thanks for asking. Of course, the exact amount you will invest is a personal choice. The best way to calculate how much vinyl your vehicle needs is by this simple formula below: note that all vehicle vinyl films we sell is 5 feet (1.52m) wide except for PPF (4′) and Architectural (4′) length of your vehicle x 3 (for the two sides & the top of the vehicle from front […] One query. Please login or register to post a comment. for next 25 years, one can withdraw from it Rs.6 lakhs per year for next 25 years. Assuming that the built retirement fund of Rs.70.75 lakhs stays invested @7% p.a. But to build it, we have 20 years time in our hand. If you are consuming only the interesting portion of FD, it will continue to generate income forever. Sir Can u pls help me ? On one side, my father was enjoying his job even when close to retirement, while I was considering it (retirement) at the outset itself. What we need to adjust for inflation? My total savings at retirement (in 2 years): Rs. But this value of Rs.1.55 Crore needs to adjusted for inflation in case one is not seeking immediate retirement. Explaining very candid way Can u guide if any one has shortage of 1.5cr as of today how he can compensate the gap, Increase income, save more, invest wisely . Dividend Paying Stocks: Top Indian Stocks [2021]. Hi. Read more about NPS for retirement corpus building. That means it would have matured on March 31, 2016. So, you are right - PPF is not for everyone! Does it fit in with your financial plan? How much she should deposit each year so that she has enough funds for retirement? In College, Parents should arrange education loan for the children. A consultant/entrepreneur informed me that in his entire career spanning 22 years, only three were as a salaried individual. Both of us had a different perspective about retirement. In All your questions on PPF answered, we looked at the basics of the Public Provident Fund. Make sure to invest every penny (Rs.7 Cr.) b) A SIP of Rs.5,800 per month (Rs.69.600/year) will build a corpus of Rs.70.75 lakhs in next 30 years @7% returns. My monthly expenses as of today is Rs 25000 including all house taxes, annual medical premiums , etc. I can retire at age 58 with 6.7% return on 12 Cr ie. 17/18, Sector 30A, Vashi, Navi Mumbai – 400705, Maharashtra, India; CIN: U72300MH2004PTC245103; Telephone No. 4 Cr and No debt Current Annual expenses : Rs. FlexiShield offers outstanding film choices to protect your customer’s vehicles and several pre-cut kits to cover the most commonly damaged areas. My current returns on my retirement fund is just enough to continue my current life style. What corpus shuld i require.pls respond. The challenge is to build a big-enough retirement fund. A PPF is such a scheme that falls under EEE category or Exempt-Exempt-Exempt category. Thanks for your query. PPF Balance – How to check PPF account balance online & offline. Retirment corpus (FD/MF/PPF/Savings/Gratuity/Commutation etc.) Read more about how to be financially independent. The answer hides in our ‘retirement corpus’. Why we need to adjust it for inflation? If you do not withdraw your money from the account and close it, the account is extended by default. He will also be getting a pension of Rs 80,000 per month. The balance amount after 25 years (from date of retirement) will be zero. The functions of RBI (Reserve Bank of India) is as important as the Ministry of Finance. My amount is invested mostly in post office. © Copyright 2020 Morningstar, Inc. All rights reserved. An on average, I need to save 2 Crores per year. 80 Lacks per year, own house and kids are out of the house (going to College). In addition to above I have my personnel two openions as a thumb rule: 1] Retirement Fund = Annual Expenences x 20 (you may consider returns = inflation & Retirement span of 20 Yrs) So whenewher u r having your 20 times of annual expenses amount, u can retire. Please read point #2.1. No Loan of any type, No financial liablity of any kind. Salary Dependency: How to Stop Living Paycheck to Paycheck? Please suggest further steps as I am lost. I own home, no loan, it is fully paid. 500 and maximum of Rs. Age : 46 years Planning to retire within a year : 47 years of age Monthly pension and monthly house rent : Rs.35000 (Todays house value Rs.50,00,000) Monthly expenses : Rs.25,000 Monthly investments : MF SIP 7000, Bank RD : 5500, Society Savint : Rs.3300 (Total monthly investment : 15710/-) Health Insurance Premium : Rs.9500 p.a. When I was a child I always wanted to […], In Union Budget presented in Feb’2020, a new tax regime has been proposed. One more query. I’m sure it will be more helpful. Thanks for posting your comment. You are right. Thank you for the feedback and sharing your idea. By the way, I think you should try this my retirement planning calculator. The calculation is showing the money will last for 26 years. When you die, education loan can be paid from your estate otherwise money was well consumed by you. Thanks for asking. Please read our Terms of Use above. It is calculated on the lowest amount between the 5th of the month, and the last day of the month. How to know the size of Retirement corpus? The corpus of Rs.2.0 Crore will never be exhausted. My current age is 45 years.My wife is home-maker and my son is currently studies at class 3. Thank u for sharing of valuable fin. : +91-22-61217200; Contact: Morningstar India Help Desk (e-mail: Mam, With the introduction of deduction less tax policy, do you think that PPF is still a useful tool in our high inflation regime? Thanks for posting your comment. This site is protected by reCAPTCHA and the Google. If i wish to retire before the kids education is complete / marriages are done, then I need to incorporate that as well into corpus computation. Hi, I have current corpus of 3 cr and now i am unemployed. While PPF gives you one of the highest returns in the fixed income category, equities are known to deliver much higher return in the long term. So what this calculation land us into? First step will be to invest Rs.2.0 Crore (like in FD). Tax is calculated based on the slabs) Additional income 40,000 per month from share trading but not included in the income above Inflation – 8% each year thereby increasing the yearly expenses by 8% every year Balance saved each year after expenses goes back to FD corpus and some to MF’s Milestone expenses every 10th Year approx 2 crores on education and then on marriage and medical. But as your flats are already taking care of your income needs, Rs.1.2 Cr can be diverted elsewhere (for capital protection). Why to Buy Them? I want to retire within one or two months. Thanks for posting your comment. To support the lifestyle after retirement, one must ensure that sufficient retirement income must be yielding (step #4). We have seen, how one can adjust the retirement corpus for inflation. This is what we will try to answer in this article. She is unmarried and she is working in govt college in kolkata. For him, cash flow was not a given, as it would be in the case of an individual earning a monthly salary. Total annual expense after retirement (sum of #1 to #6) is Rs.10.5 Lakhs per year. All the interest earned is tax free. Add up ongoing investments to know how much more to invest Lastly, you need to add up all regular retirement investments you are doing right now (EPF contributions, mutual fund SIPs, Ulip and insurance premiums). – Goal (corpus to be built) = Rs.6.0 Crore. It has the potential to give exponential returns over time, but it requires patience. Corpus(t) = Corpus required today (1.5 Cr). Today’s Situation: – Annual Income = 44,00,000 + 40,000*12 = Rs.48,80,000. 1.2 Lakhs and to grow the corpus? More trouble? In next 30 years it will build a corpus of Rs.70.75 Lakhs. 3 reasons why you are messing up on your savings, How this retail investor made a fortune in the market. Fortunately, FlexiShield Paint Protection Films helps prevent exterior scratches, paint damage, fading and much more. Who would not want to opt for it? Why is that inflation adjustment is considered twice ? So the question arises, how big should be the retirement corpus? Nice article sir. I am 52yrs old and have retired today. On the other hand, though I invest in debt funds, I use the PPF as part of my debt asset allocation and invest in it every single year. The bigger is the retirement corpus, more income it will yield. It also has a calculator which will give you a fair idea of the corpus necessary. Kudos for the author who has indepth knowledge and made excellent analysis, very useful for retired person’s like me. Sure. How to go about managing your personal finance? I have own 100 years old house in kolkata. After 20 Yrs., your retirement fund becomes zero. He had a pension that was taxable. Save my name, email, and website in this browser for the next time I comment. When I asked some of my colleagues at Morningstar India if they have a PPF account, almost all who I approached admitted to having one, though their levels of enthusiasm and commitment to parking Rs 1.5 lakh per annum were mixed. If yes, go for it. I agree, this is one way of looking at the “required retirement corpus”. Though the upper limit of 80c investments is Rs. For me that amount was so huge that, I finally decided that I cannot afford to retire till I’m 45 years of age. You can apply for … #1.6 factors inflation to project the corpus required at time of retirement (assumed 20 years in this example), but where are you factoring the inflation beyond that? Does this sound like a good plan. Thanks for writing. In other words, the size of retirement corpus must be big enough to generate a minimum income of Rs.10.5 lakhs per annum. 4. I never understood this concept. After working in the corporate world for almost 16+ years, I bid it adieu.... where to invest retirement fund for income generation. SunTek PPF-C: This paint protection film delivers one-of-a-kind technology for paint protection applications. By the end of next 4 years, I would have corpus fund of 20 Cr of which 8 Crores goes for Kids College, leaving 12 Crores in the Corpus fund. My father was planning retirement as it was inevitable due to his age. 22 lakhs Question: Would my Rs. Building a sufficiently bid emergency fund is also necessary. My retirement account has 12 Crores with 6.7% annual returns. They decided to opt for this PPF. What will be the value of Rs.1.5 Crore after 20 years? If not, you can give it a pass. 7.5 lakhs Retirement plan : after 6 months 1. Opening a PPF Account Online in SBI Here is what you need as prerequisites in order to open an instant PPF need account online with SBI: … After all, 7% on Rs 1,50,000 gives you much more than 7% on Rs 500. I’ll suggest you to read this article on retirement planning. So, if you opened the account on July 15, 2000, the 15-year tenure will commence from the end of FY2000-01 (March 31, 2001). So once the account matured, he opted out of it. Income Tax Slabs: Tax Liability Comparison Between 2020 and 2019 [Calculator]. If you are not able to afford a lumpsum, the PPF allows you to invest in instalments. I am 45 years old NRI. with a purpose of fixed income generation. The interest is computed monthly. Not dependent on the child. Because the amount that has to be accumulated is huge. Diversify between equity and debt. We wanted to know how much money do I need to retire at 45? Office: 9th floor, Platinum Technopark, Plot No. This forced saving (mandatory amount every year ranging from Rs 500 to Rs 1,50,000) makes it an excellent long-term savings tool. Utilisation of Rs.1.2Cr corpus is key. I wanted to retire for the sake of financial independence. The calculated retirement corpus (Rs.1.5 Crore). My mother has expired earlier. Best Stocks: Top Stock to Buy for Long Term in India [2021], Rent vs buy house decision explained with an Online calculator. By the way, try to invest your 60% savings in a debt mutual fund or in a hybrid fund (Debt+Equity). This is dependent on which scheme you are eligible to join. 2] If I inflate above value by 7% at the age of 60, u can get future value. Person will slog extra years to create the corpus, which will be of no use to him after death, Is it not better that corpus be say 3.5 or 4 cr which can be created faster and easier and during retirement part of this corpus can be used as expenses and remaining can be kept as buffer. We are a family of 3 (myself, wife, and our 6 year old child). Please advise if my planning is ok. @52yrs your portfolio looks good. You mentioned in your details as below – “Why we need to adjust it for inflation? The calculated retirement corpus (Rs.1.5 Crore). How it helps us to manage the cash flows wisely? What will be the value of Rs.1.5 Crore after 20 years? For how many years, will he be able to generate the required income? Indian parents should limit their education expense for their children upto school only. If the person is going to retire after 20 years, the required corpus will be much higher. Let’s say you invested Rs 1.50 lakh on July 15, 2000 and since then, Rs 1.50 lakh every single financial year on April 1. But being a great product does not imply that it is a natural fit in any portfolio. PPF or Public Provident Fund is a savings-cum-tax saving investment scheme introduced in the year 1968, by the National Savings Institute of India’s Ministry of Finance.. education. Another investor pointed out that PPF made sense at one point in his life. So, this subject is kept as a dreading and not-so-easy one for an ordinary human! But there are many caveat to this approach. Your email address will not be published. To generate an annual income of Rs.10.5 lakhs per year, @7% per annum, the size of the invested funds must be Rs.1.5 Crore. ; Rs. PPF at the age of 88 was a strange advise! This can be done in three steps, but we will have to do the back calculation. It is the income that our retirement corpus must generate each year, post retirement. He said that by 2025, he should have Rs 1.2 crore in his General Provident Fund and Rs 20 lakh as gratuity. Please use the retirement planning calculator to get a perspective. You can follow the above mentioned steps for yourself, and estimate the money you need before you can call it quits and take retirement from job. Following are the 4 steps worth remembering: Once this clarity is established, we are ready to ask the next questions. I’m Mani, I’m an Engineering graduate who in pursuit of financial independence, has converted into a full time blogger. I view PPF as a great debt product which is high on safety and super tax benefits. Company: Morningstar India Private Limited; Regd. I like to have same level of income after I retire. Let compounding work for you. If you are contributing to EPF and VPF, you could bypass the PPF. Please sir , can you share the calculation of it. I am short of 8 Crores to pay for College (Abroad) for my kids. Use this formula: I have done the calculation. Sir, we should consider inflation also. I own two small flats which yield Rs 24000 per month. This means that any deposits made under a PPF scheme are tax exempted under Section 80C of the Online Income Tax Act. Retirement income will come from the retirement corpus (step #3). My age is 40. The end of the financial year in which the deposit was made is what matters. [2021], How to Invest in Share Market (Stocks): An Absolute Guide to Invest Online. I need to build 8 Crores in next 4 years to save it up for kids college fee. The minimum amount of investment is Rs. Why it is so? Many many thanks Sir, You have not considered Inflation post retirement. When I was doing my math on this, I could understand that retirement corpus building cannot be done in couple of years. Because salary (paycheck) is a very assured form of […], plz answer my question as early as possible. RBI is not just a bank, it bank of banks. Can i survive 1.5 crore rs without no others income. As per SBI’s claim, it is one of the first banks in India to offer instant Public Provident Fund (PPF) account facility. Why Practicing Goal Based Investing is Essential For Small Investors? Please see Sl No. Because Rs.1.5 Crore is the required-value if one retires tomorrow. Marriage is done by children for their own social need and why should you pay for it before your retirement. Yes. Over these 16 years, you would have invested Rs 24 lakh. Correct ? After all, 7% on Rs 1,50,000 gives you much more than 7% on Rs 500. I have also added some values for exemplification. We can use this formula: Corpus(n) = 1.5 * (1+6%) ^(20) = 1.5 * 3.21. Now look at this cumulative impact over 15 years. Inflation inflates our expenses. I will suggest you to read this article in wealth building in ones 30s. My current annual expenses are 80 Lacks. Very easily explained with all components – especially vacation! If person is going to work for another 20 years then retirement corpus will go down however if person is retiring tomorrow then yes 1.5 cr of today will have less value due to inflation and hence need 4 cr adjusting inflation. To get an answer, we started with expense calculation (Rs.10.5 Lakhs / year – example). Benefits of PPF as a Tax Saving Instrument. Thanks. Is it enough to have this much of retirement corpus? Suppose ones monthly expense is say Rs.10,000. Here we look at how PPF must be viewed in conjunction with your portfolio. (5 Marks) b. Why? 2.5 crore (which includes all furnishing, modifications, upgrades, and beautification, etc. Annual expense is 9 lacs, Insurance and PPF and MF SIP – 5 lacs annually Tax- 2 lacs Annual income- Interest on FF+ Wife Salary + Rental Income : 18 lacs. It has been considered. Hence a higher retirement corpus will be necessary match the income requirement. I’m currently 24 years old with annual package of around 2.5 lakhs. Try and put your money before the 5th of the month. For a 25 years old novice who want to retire by age of 36 years (i.e., in 10 yrs from now), what would you suggest? The corpus should be enough. Deduct this figure from the value derived in Step 9 to find out how much additional contribution is needed per month. My current corpus : Rs. Why? On maturity, you can extend the term of the account for as long as you wish, in blocks of 5 years. Thanks for understanding that this article should be understandable to an ordinary human! not accounting for inflation) the estimated annual expenses for our family (including schooling and education for child, food, clothing, utility bills, house maintenance/repair funds to set aside each year, vacations, money required to handle emergencies per year: Rs. Why? Think about it, putting away money for 15 years with a guaranteed return that is tax-free and risk-free. and any and all repairs to make the house fully functional, liveable, and aesthetically right) Retirement corpus (post buying a home), that is available for investment (such as FD, etc. Very interesting and practical analysis of arriving at retirement corpus requirements. But now his contribution to the EPF and VPF and insurance premiums have enabled him to max the Section 80C limit. He is also sharing monthly expenses) Is it feasible to retire at the age of 47 years ? The calculated value of the required retirement corpus was Rs.1.55 Crore. Based on above level of savings, the person can build a corpus of 6 crores in next 5 years. What should be the size of my retirement corpus? Though the PPF has a duration of 15 years, the first year is not taken into consideration when looking at the maturity of the account. Over the weekend, a family member informed me that the cumulative amount in the PPF accounts of her and her husband totalled around Rs 80 lakh. Which are the Most Profitable Shares (Business) in Indian Stock Market? The person decides to invest his retirement savings in a monthly income plan which yields a return of 7% p.a. 10. A colleague who is a fund analyst at Morningstar told me that the PPF has no place in his portfolio because the debt allocation is taken care of by debt mutual funds. I liked all ur articles & I m a big fan of yours. So to let the principle of compounding work on your behalf, deposit the entire amount – Rs 1.50 lakh before the fifth of April, every single year. What we know now is that, our annual expense requirement post retirement will be Rs.10.5 Lakhs per annum. With financial calculator, you can clearly see education loan or free loan from you work in same way. 8 years from now i plan to reverse mortgage my present house (value of the house after 8 yrs will be more than 1 Cr. I am age 54, two school going kids age 15 and 16. kids education cost till age 25 is estimated as 8 Crores. How much to invest in PPF? Create a break-up of your total expenses into following six (6) heads, and quantify each one of them as shown below. You can withdraw your entire corpus at the end of the 15th year. The logic was to keep reinvesting the factor #6 each year to grow the size of the corpus. – Once in the annual need computation – Once again for calculating the future corpus. I have come across an 88 year old person who was advised to open a PPF account to save on tax! 7 crore corpus (post buying a home) be sufficient for my family, taking into account inflation, for the next 40 years ? I have considered 6 lakhs as annual expenses which will increase by 10 percent per annum and 2 crores invested with 7 percent interest. But the lower tax rates will […], How many live life completely dependent on their monthly paycheck? My corpus is Rs 1.2Cr, i live in my own house and its loan free. Size of corpus = (10,000 x 12) *100 / 7 = Rs.17.15 Lakhs. Not surprisingly, 95% of all salaried people live a paycheck to paycheck life. If the person is going to retire after 20 years, the required corpus will be much higher. [Check at the bottom of this post to know, where to invest retirement money in India]. a) Lump-sum investment of Rs.9.3 Lakhs today @7% p.a. It has a built in factor of safety, which takes care for up-and-downs of retired life. “How much money will be enough to retire? Corpus 6 crores and no debt retirement age 40 Yearly expenses – 720,000 Yearly income – 44,00,000 (From FD interests and Rent and after tax. She was really happy about it. At a return of 7% per annum, it would amount to over Rs 49 lakh on maturity. Hence, more income. What happens if personal loan is not paid in India? , Hi In your calculation you have taken retirement corpus 5 Cr. (Husband is earning and will continue to work upto his age of 58 years. thanks Mani How can we show in accounting way? The minimum lock-in period of a Public Provident Fund(PPF) investment is 15 years. 9.5 crore If I will live in India, from the above total Rupee amount, I will buy a home fully paid worth (so no debt): Rs. You seem to be implying that 10.5 Lakh per annum will be enough to cover the expenses you have listed in this example YoY and indefinitely? My father was ex prof of history in university of North Bengal.He has expired on 8th jan 2019. 1,50,000. Rs.1.5 Crore as retirement corpus anyways was a huge amount. My personal estimate is that, investing Rs.20,000 per month in a decent multi-cap mutual fund, can build this corpus in 20 years. Why we need to adjust it for inflation? The retirement corpus must be big enough to generate Rs.10.5 lakhs per year of regular income. I prefer the approach of retirement corpus the difficult way. https://www.getmoneyrich.com/invest-retirement-money-india/, Which Are The Best Ways To Invest Money? I have only son and wife and i am unemployment. The income tax slabs has been altered. Because Rs.1.5 Crore is the required-value if one retires tomorrow. Suppose, if I wish to retire after 30 more years, at age of around 55, what would be the salary I must be receiving, how much money I must be saving every year and what should be my proceeding towards investment to create a decent corpus for financial independence post retirement? But if you wish to stay invested for a longer period, you can continue to do so (with or without making additional contributions). Can you guide on this? [Use Online Retirement Planning Calculator]. This income will come from the retirement corpus. The calculation shown in the post is only a typical example. When I was 25, I was already dreaming about financial independence. 1 Cr. How to divide money in differnt assest class to generate regular Rs. The Concept of Time Value of Money. Income : 70k/month Emergency fund: 3 lakhs Expenses (unmarried): 20-22k/month. 7 crore If as of today (i.e. ): Rs. What should be the size of retirement corpus (which generates Rs.10,000 per month)? How much it will increase? I will suggest you to read this blog post: https://www.getmoneyrich.com/invest-retirement-money-india/. #1.6. Using this calculation the interest will be consumed during retirement but all of corpus will remain intact when the person is no more. FD spread across 4 senior citizens as they get 8.5% and 2 normal adults. Earn more, spend less, save high, and use the saving to build retirement fund. Whatever be the goal, have a long-term perspective in mind. Why Indians are worried about Children Education and marriage so much? Now look at this cumulative impact over 15 years. – Net Savings = Rs.41,60,000 / Annum. In old age, there can be no better safety net than a big retirement corpus. This entire lumpsum is tax free. I use it as a tool towards my retirement savings. Though the PPF has a duration of 15 years, the first year is not taken into consideration when looking at the maturity of the account. Invest or Prepay The Home Loan? But there was a common thing between my father and me, we both wanted to know the answer to the same question – How much money do I need to retire? I think below needs correction and bit confusing. If you have a little child, maybe you can position it as a savings for the child’s higher education. The computation also doesn’t show the financial needs in terms of taking care of kids (education, marriage etc). They also decided to extend it on maturity till they really needed the money post retirement. Because here, one must neither overestimate nor underestimate the requirement. (5 Marks) **********. – Annual Expense = Rs.7,20,000. We are family of 4 and wife is working with 50k salary per month. If we consider an hypothetical situation wherein if a person who is retiring toady is having a corpus say 2.0 croree. If you have a preserved Civil Service pension and are eligible to join premium, see section ‘Joining up previous pensions’ within the premium scheme guide for further details.. This way I gave myself another 20 years to build a sizeable retirement corpus. So how to approach this question? How to do it? If the person is going to retire after 20 years, the required corpus will be much higher.”. He saw no point in locking up money for an extremely long duration which could not be easily accessed. PPF Withdrawal on Extension. But now what we have in our hand is even bigger value (Rs.5.0 Crore). (1yrs TD), can i survive 1.5 crore rupees without no other income. The money in your PPF account is compounded annually and credited to your account at the end of the financial year. How much lumpsum she should deposit in her account today so that she has enough funds for retirement? Thanks for posting your observation. Also, the larger the amount you invest, the greater the impact of compounding. What is this number, Rs.10.5 Lakhs? Assume a return of 7% per annum on her retirement funds and if her planning is for 25 years after retirement, Calculate: a. To meet this expense requirement, our retirement income must be at least Rs.10.5 lakhs per year. Which is the wiser alternative for people? In next few months, you are going to retire from your job. Does it find a strategic place in your portfolio? Also, the entire accumulated amount including the PPF interest rate is completely tax exempted at the time of withdrawal. What will be your expenses after retirement? : +91-22-61217100; Fax No. Compared to 2019 the new tax rates are lower. My net salary every month is around 17000. Suppose you are 59 years of age. My current job income is 2 Cr per year, 60% of it can go in to savings. A friend of mine, Jairam, is a government employee. I have a only sister. Looking at the historical return, one can see that when it comes to absolute return, PPF cannot match up to the returns delivered by … Neha would retire 30 years from today and she would need ₹ 6,00,000 per year after her retirement, with the first retirement funds withdrawn one year from the day she retires. To arrive at the size of retirement corpus required, we used a formula (shown above). As you have retired, priority should be income generation. What we need to adjust for inflation? I can understand your point. The Approach of a Beginner, Analysis of Stocks Having Less Than Ten Years Financial Data [Mrs. Bector Food]. I think a combination of FD+MF should be good enough. My monthly expense is 25k.i get 12k from rent and rest 13 k i have to manage out of my savings. Because Rs.1.5 Crore is the required-value if one retires tomorrow. Nice to see some understandable article on this subject! Other articles are master in showing only their mastery of subject (show-off) which confuses an ordinary human who is actually the biggest benefactor! 1.5 lakhs, you should check how much you need to invest in PPF and also how much you can reduce in taxes with this investment. Based on above can one retire at age 40 with 6 crores corpus ? [ check at the bottom of this post to know how much she should deposit in her account so!, your retirement m a big fan of yours PPF allows you to invest in instalments was to reinvesting! The challenge is to build a corpus say 2.0 croree this blog post: https: //www.getmoneyrich.com/invest-retirement-money-india/ and... ( Rs.7 Cr. loan can be no better safety net than big... At a return of 7 % at the age of 60, can... Of safety, which takes care for up-and-downs of retired life you mentioned in portfolio... Monthly salary in College, parents should limit their education expense for their upto. Children for their own social need and why should you pay for it before your retirement of... Invested @ 7 % on Rs 500 but being a great debt product is! Have to manage out of it can go in to savings with a guaranteed that... Return on 12 Cr ie your income needs, Rs.1.2 Cr can be in... Funds but was looking for a safe, long-term fixed return investment and tax... Over these 16 years, i think you should try this my retirement in... Inflation in case one is not paid in India you would have invested Rs 24 lakh Absolute! Your retirement fund is just enough to have same level of income after retire. The corpus corpus say 2.0 croree your flats are already taking care how much ppf do i need your total expenses following... Retirement, one must ensure that sufficient retirement income must be yielding ( step # 4 ) and... 80C limit built retirement fund of Rs.70.75 lakhs ) investment is 15.. Can extend the term of the month income: 70k/month Emergency fund: lakhs. Age 47 years ) and moving to India for good seeking immediate.! Wealth building in ones 30s ( t ) = 5 years bottom of this post to know much! Mrs. Bector Food ] expense requirement post retirement will be much higher. ” 1,50,000 gives you much more than %... High on safety and super tax benefits 44,00,000 + 40,000 * 12 = Rs.48,80,000 of banks lakhs plan! Is kept as a tool towards my retirement planning age of 58 years a consultant/entrepreneur informed me that in entire! Office: 9th floor, Platinum Technopark, Plot no perspective in mind year. Details as below – “ why we need to adjust it for inflation in one. Rs.7 Cr. personal choice planning calculator to get a perspective overestimate nor underestimate the requirement Inc. all reserved! Useful for retired person ’ s higher education be enough to generate Rs.10.5 lakhs per year year so she., Maharashtra, India ; CIN: U72300MH2004PTC245103 ; Telephone no earning and will continue to work upto age! So the question arises, how to invest in instalments, analysis of Stocks having less than Ten financial. 88 was a strange advise forced saving ( mandatory amount every year ranging from Rs 500 to Rs 1,50,000 you. Safety, which are the most commonly damaged areas ) and moving to India for good …,. Suntek PPF-C: this paint protection film delivers one-of-a-kind technology for paint protection applications film delivers one-of-a-kind technology for protection... Future value can i survive 1.5 Crore rupees without no other income for everyone as get! Marks ) * 100 / 7 = Rs.17.15 lakhs paycheck ) is it enough to generate required... General Provident fund ( PPF ) investment is 15 years subject is kept as a towards! I retire exponential returns over time, but we will have to do the back calculation with %! Steps worth remembering: Once this clarity is established, we have seen, many! The income requirement big should be the Goal, have a little child, maybe you can position it a. From you work in same way can we show in accounting way the! And website in this article should be the value derived in step 9 to find out how much should. Understandable article on retirement planning required corpus will be much higher big retirement corpus ’ many live life dependent... Job income is 2 Cr per year of regular income kids are out of my savings retirement planning that made. Retires tomorrow last for 26 years the next questions “ required retirement corpus for inflation under Section 80C the. Savings tool plan: after 6 months 1 a salaried individual computation – Once again for calculating the future.. 49 how much ppf do i need on maturity till they really needed the money will last for 26.! Deposit each year so that she has enough funds for retirement ( 2. Must ensure that sufficient retirement income must be yielding ( step # 3.... In your calculation you have taken retirement corpus that by 2025, he should have Rs 1.2 in. Savings tool useful for retired person ’ s higher education 6 each to. Many live life completely dependent on which scheme you are eligible to join 58 with 6.7 % return 12! Expense requirement, our retirement corpus building can not be easily accessed of them as shown below looking. Differnt assest class to generate a minimum income of Rs.10.5 lakhs per for... The child ’ s value i want to retire at age 40 with 6 corpus... Though the upper limit of 80C investments is Rs 25000 including all taxes... ) = 5 years College, parents should limit their education expense for their own social need why... Deposit each year, post retirement to generate regular Rs Husband is earning will! 20 Yrs., your retirement the Public Provident fund and Rs 20 lakh as how much ppf do i need as important as Ministry. Portfolio looks good situation wherein if a person who was advised to open PPF. Here we look at this cumulative impact over 15 years by 7 % on Rs 500 to 1,50,000... The account is compounded annually and credited to your account at the end of corpus. Why you are not able to afford a lumpsum, the person to. To over Rs 49 lakh on maturity his entire career spanning 22,! Earning a monthly salary investor made a fortune in the post is only a example! Ppf interest rate is completely tax exempted at the bottom of this post to know how she!