• Arpita Gupta

How to generate a monthly income of ₹1.5 lakhs after 20 years

If you're spending ₹40,000/- per month today, after 20 years with Inflation @7% p.a., this monthly expense will grow to ₹1.5 lakhs per month (to maintain the SAME standard of living).

So, how much one would have to invest and in which instrument to meet this financial requirement post-retirement or after 20 years?

1. How much to invest

Assuming a post-tax return of 10-12 percent p.a., if you invest

a. Lumpsum amount today - ₹50 lakhs

b. or A Monthly Investment for 20 years - ₹47,000/- p.m.

After 20 years, we will be comfortably looking at a total sum of anywhere between ₹3.6 crores for a conservative investor to ₹5.3 crores for a little aggressive investor. Post that, if we look at an annual withdrawal rate of 4 percent, we can expect anything between ₹1.2 lakh to ₹1.7 lakh, which averages it out to ₹1.5 lakh after balancing the portfolio annually.

2. Where to invest?

In a mix of Hybrid balance advantage funds and equity funds (mix depending on your risk profile).

3. Don't miss this

Balancing the portfolio on a regular basis is the key here. Do not invest and sleep over the portfolio.

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