Mutual Fund Calculator: Adarsh Vinay is a 24 year old professional who wins ??40,000 per month. Adarsh comes from a middle class family and he wants to retire at the age of 50 because he started his career quite early. Adarsh Vinay has a slightly higher risk appetite but is not ready to invest in direct stock markets.
On how Adarsh Vinay can reach his retirement goal; Pankaj Mathpal, Founder and CEO of Optima Money Managers said, “For a middle-class family member, ??60,000 is enough to cover the monthly financial needs after retirement. However, if an investor plans to retire after 25 years, then the ??60,000 a month will not be enough for it because inflation will also increase during this period. By maintaining an average inflation of 6.5 percent for the next 25 years, this ??60,000 monthly needs after retirement will reach approximately ??3 lakh. It is therefore necessary to accumulate as many retirement funds that can help him obtain ??3 lakh per month with an inflation rate of 6.5% adjusted after retirement. “
Pankaj Mathpal said that inflation will continue to grow after the investor’s retirement and therefore the investor should develop enough funds to help him recover. ??Monthly income of 3 lakh with 6.5 percent annual inflation adjusted after retirement. He said the fund needs to be reinvested in the SWP (Systematic Withdrawal Plan) as it would bring in around 8 percent per year, beating average annual inflation by 6.5 percent.
Asked about the funds required after 25 years to reach that retirement goal, Pankaj Mathpal of Optima Money Managers said, “Assuming an ROI of 8% per year and an annual inflation rate of 6.5%, about ??8.82 crore would be needed to get an inflation adjusted monthly pension ??3 lakh per month. “
On the investment tool that can help the investor to respond to this ??Investment objective of 8.82 crore over 25 years; Vinit Khandare, CEO and Founder of MyFundBazaar India Private Limited, said: “Equity mutual funds can be a good option for the investor if he is hesitant to invest in direct stock markets. The 15 x 15 x 15 Mutual Fund Rule suggests that one can expect to earn a 15% return on one’s investment in an equity mutual fund, if the time horizon is 15 years or more. However, he also advised investors to opt for an annual SIP increase of 15%, as he plans to retire at age 50.
Mutual Fund Return Calculator
Assuming a 15% return on one’s mutual fund stock investment in a SIP mutual fund for 25 years while maintaining a 15% annual increase in SIP, the SIP mutual fund calculator suggests that the investor must start with a monthly SIP of ??9,500. This will allow the investor to accumulate ??8.85 crores.
Asked about the SIP of mutual funds that can return 15%, Pankaj Mathpal of Optima Money Managers listed the following mutual fund plans:
1]Nippon India Flexi Cap Fund;
2]Aditya Birla Sun Life Advantage Equity Fund;
3]ICICI Prudential MNC Fund;
4]Canara Robeco Flexi cap.
On SWP which can generate an annual return of 8%, Vinit Khandare of MyFundBazaar India has listed the following plans:
1]Short term ABSL funds;
2]HDFC Very Short Term Fund; and
3]SBI savings fund.
Warning: The opinions and recommendations expressed above are those of individual analysts or wealth management companies, not of Mint.
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