retirement planning
Maintaining regular income after retirement is the biggest financial concern of every person. In such a situation, a question arises in the minds of many people that if they have a fund of ₹ 1.5 crore at the time of retirement, can they get an income of ₹ 1 lakh or more every month? Financial experts say that the answer is yes, but it completely depends on the method of investment, risk appetite and withdrawal strategy.
Investment strategy will decide monthly income
According to experts, the monthly income from a retirement corpus of ₹1.5 crore can be around ₹70,000 to ₹1.2 lakh. This will depend on whether the investor adopts a conservative, moderate or aggressive investment strategy.
In retirement planning, it is not only important to earn high returns, but it is also important that the investments remain sustainable in the long run and can also overcome the effects of inflation.
Conservative investors can get stable income
People who want to avoid taking risks usually invest in safe options like Senior Citizen Savings Scheme (SCSS), RBI bonds, fixed deposits and annuity schemes. The main objective of such a strategy is to protect capital and ensure regular income.
According to experts, investors in this category can earn an income of around ₹ 70,000 to ₹ 85,000 every month. Although the returns are relatively low, the impact of market fluctuations is also limited.
Balancing growth and safety in a moderate portfolio
Investors with moderate risk appetite keep a mix of both debt and equity in their portfolio. Schemes like Balanced Advantage Fund, Debt Fund, SCSS and Annuity can be a part of this strategy.
This type of portfolio offers regular income as well as the possibility of capital appreciation in the long term. Financial experts estimate that through this strategy, an income of ₹ 85,000 to ₹ 1 lakh can be earned every month.
Aggressive investment can increase monthly income
Investors who have high risk appetite can invest 50 to 65 percent of their total funds in equity mutual funds and other growth based investment options.
There is a possibility of getting better returns in the long term in this strategy, due to which an income of ₹ 1 lakh to ₹ 1.2 lakh can be possible every month. However, there is also a risk of market decline and instability associated with it.
Correct withdrawal strategy is important
Experts believe that to maintain the retirement fund for a long time, special attention should be paid to the withdrawal rate. Generally a withdrawal of 4.5% to 6.5% per annum is considered safe. This reduces the risk of the investor losing his capital quickly.
Many financial advisors also recommend adopting bucket strategy. In this, liquid funds are kept for short-term needs, safe investments for medium term and equity investments for long term.
Focus on long term security
The objective of retirement planning should not only be to achieve higher monthly income, but it is also important to ensure that the accumulated capital lasts for the entire retirement period. Diversification of investments, separate planning for health expenses and controlled withdrawals can help in keeping retirement funds safe in the long run. With the right strategy, a retirement corpus of ₹1.5 crore can become a strong source of regular income for many years.
