Mutual fund schemes to invest in to build a retirement corpus of Rs 5 crore in 12 years

In each edition of ET Wealth, our panel of experts answer questions related to all aspects of personal finance. If you have a question, send it to us immediately at [email protected]

My husband is 48 and plans to retire at 60. We want to build a pension corpus of Rs 5 crore in 12 years. Please suggest SIP amount and schemes to invest in. We have an aggressive risk appetite.

Vidya Bala, Co-Founder, responds, “The target is very aggressive. Assuming a return of 10-12%, you will need Rs 1.6-1.8 lakh per month in savings to achieve this. The return assumption is moderate to high. So don’t try to change the return expectation upwards A combination of passive and active funds will help you not to suffer poor performance in active funds Consider 15% in UTI Nifty 50, 25% in Motilal Oswal Nifty 500, 20% in Parag Parikh Flexicap when they open, 15% in any midcap 150 fund, 15% in HDFC Corporate Bond and 10% in Axis Treasury Advantage Fund.”

I’m 36 and just got married. My spouse does not work. I stay with my parents, saving on rent and other household expenses. I have a corpus of around Rs 15 lakh spread across NPS, PPF, FD, savings accounts, stocks and mutual funds. I currently have SIPs in Kotak Small Cap, Axis Midcap, ICICI Prudential Bluechip and Axis Long Term Equity Fund, totaling Rs 17,500 per month. I recently left Motilal Oswal Flexicap and HDFC Hybrid Equity Funds. I also have term plan of Rs 1 crore and health insurance of Rs 3.5 lakh. I want to accumulate about Rs 20 crore over the next 25 years. How can I do this?

Raj Khosla, Founder and Managing Director, responds, “To achieve a corpus of Rs 20 crore in 25 years, you need to invest around Rs 1.5 lakh per month with an expected rate of return of 10% on portfolio basis. Stay invested and increase investments in the existing portfolio. FD and investments in savings accounts must meet the emergency fund to cover 9-12 months of household expenses.The balance of the portfolio must be invested in debt and equity at a ratio of 25 to 75. The Debt portfolio should be majority in PPF and Debt Funds The balance should be invested in equity diversified funds through SIPs As income increases, increase your SIP investments Investing in equity Direct actions are high risk and high reward and should be done after detailed analysis.For unforeseen events, you must have minimum life insurance coverage of 20 times your annual income and insurance. rancid family floating disease of Rs 20 lakh. Investing in real estate should be valued as it will aid in asset building and also provide multiple tax benefits on the home loan. Examine your portfolio once in three years.”

Dolores W. Simon