Rs 1 Lakh Monthly Retirement Plan: How much to invest in SIP or lump sum at age 30?

If you don't have any income source or a pension plan for your retirement, how will you cover your expenses? It can be covered from the passive income generated from the retirement corpus. 

It depends on the monthly amount you need at your retirement. E.g., if your monthly expenses are Rs 50,000 and you want to maintain the same lifestyle at retirement, you can calculate the corpus required in the first year of your retirement by factoring in the average inflation.

If you have other expenses, such as travel or premiums to be paid, those should also be adjusted by the average inflation rate. Once you have all expenses in place, you can calculate the total retirement corpus.

First, you should know at what age your retirement will start. Another important factor is to know your life expectancy. It is impossible to predict one's life. But it can be estimated by assessing your current health, family health history, etc. Without knowing the retirement age and life expectancy, it is impossible to calculate the retirement corpus.

While calculating the retirement corpus, two important factors are the returns that you will get pre and post retirement. When you are setting a retirement corpus-building goal, it is necessary to know the returns required to achieve it before or on time. 

As far as a retirement corpus portfolio is concerned, it can be a mix of linked and non-market-linked investments. In the beginning of your retirement corpus building, you can keep the portfolio equity-heavy, but as your age increases, you can reduce the equity portion and spike the debt. In the post-retirement stage, the portfolio should lean more towards debt investment.

Inflation plays a key role in retirement corpus building. Things get costlier, so your expenses rise with time. The corpus should also be calculated keeping inflation in mind. 

Age- 30 years Retirement Age- 60 years Life expectancy – 80 years Monthly income at retirement- Rs 1 lakh (inflation-adjusted) Pre-retirement return-12 per cent Post-retirement return- 7 per cent Inflation- 6 per cent Current corpus- 0 

Your future monthly household expenses at 60 Rs 5,74,349 (at 6 per cent inflation)

Age Monthly Amount required Yearly amount required 30  ₹   1,00,000.00  ₹       12,00,000.00 31  ₹   1,06,000.00  ₹       12,72,000.00 32  ₹   1,12,360.00  ₹       13,48,320.00 33  ₹   1,19,101.60  ₹       14,29,219.20 34  ₹   1,26,247.70  ₹       15,14,972.35 35  ₹   1,33,822.56  ₹       16,05,870.69 36  ₹   1,41,851.91  ₹       17,02,222.93 37  ₹   1,50,363.03  ₹       18,04,356.31 38  ₹   1,59,384.81  ₹       19,12,617.69 39  ₹   1,68,947.90  ₹       20,27,374.75 40  ₹   1,79,084.77  ₹       21,49,017.24 41  ₹   1,89,829.86  ₹       22,77,958.27 42  ₹   2,01,219.65  ₹       24,14,635.77 43  ₹   2,13,292.83  ₹       25,59,513.91 44  ₹   2,26,090.40  ₹       27,13,084.75 45  ₹   2,39,655.82  ₹       28,75,869.83 46  ₹   2,54,035.17  ₹       30,48,422.02 47  ₹   2,69,277.28  ₹       32,31,327.34 48  ₹   2,85,433.92  ₹       34,25,206.98 49  ₹   3,02,559.95  ₹       36,30,719.40 50  ₹   3,20,713.55  ₹       38,48,562.57 51  ₹   3,39,956.36  ₹       40,79,476.32 52  ₹   3,60,353.74  ₹       43,24,244.90 53  ₹   3,81,974.97  ₹       45,83,699.59 54  ₹   4,04,893.46  ₹       48,58,721.57 55  ₹   4,29,187.07  ₹       51,50,244.86 56  ₹   4,54,938.30  ₹       54,59,259.56 57  ₹   4,82,234.59  ₹       57,86,815.13 58  ₹   5,11,168.67  ₹       61,34,024.04 59  ₹   5,41,838.79  ₹       65,02,065.48 60  ₹   5,74,349.12  ₹       68,92,189.41 61  ₹   6,08,810.06  ₹       73,05,720.77 62  ₹   6,45,338.67  ₹       77,44,064.02 63  ₹   6,84,058.99  ₹       82,08,707.86 64  ₹   7,25,102.53  ₹       87,01,230.33 65  ₹   7,68,608.68  ₹       92,23,304.15 66  ₹   8,14,725.20  ₹       97,76,702.40 67  ₹   8,63,608.71  ₹   1,03,63,304.54 68  ₹   9,15,425.23  ₹   1,09,85,102.82 69  ₹   9,70,350.75  ₹   1,16,44,208.99 70  ₹ 10,28,571.79  ₹   1,23,42,861.52 71  ₹ 10,90,286.10  ₹   1,30,83,433.22 72  ₹ 11,55,703.27  ₹   1,38,68,439.21 73  ₹ 12,25,045.46  ₹   1,47,00,545.56 74  ₹ 12,98,548.19  ₹   1,55,82,578.30 75  ₹ 13,76,461.08  ₹   1,65,17,532.99 76  ₹ 14,59,048.75  ₹   1,75,08,584.97 77  ₹ 15,46,591.67  ₹   1,85,59,100.07 78  ₹ 16,39,387.17  ₹   1,96,72,646.08 79  ₹ 17,37,750.40  ₹   2,08,53,004.84 80  ₹ 18,42,015.43  ₹   2,21,04,185.13

Rs 12,55,75,535

 

Rs 41,91,451

Rs 35,575