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

Updated: Dec 1, 2021

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

If you invest (assuming a return of 10-12% p.a.) today -

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 portfolio value 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 a monthly income of ₹1.5 lakh p.m. 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).

What are Hybrid Mutual Funds?

They invest in both

  • Debt - like Government securities, bank FD, corporate FDs, etc. - to give fixed income and stability to the portfolio and

  • Equity - or stock markets - a portion of the money is invested in stock markets - to give a small jump to the returns generated by debt

Minimum Investment Amount

As low as Rs. 1 lakh

Return Expectation?

In the current scenario, when FD rates are at 5% p.a., investors can easily expect a return between 7-10% p.a.

Return between 7-10%? I'm looking for guaranteed returns!

Only Bank FDs offer guaranteed returns (or rather guaranteed losses)!

Here's the thumb rule: Any product offering you guaranteed returns is either giving you returns lower than inflation, or if the returns offered are higher and attractive, they're not guaranteed (some sort of risk is hidden)!

Our recommendation here is to get comfortable with a RANGE of returns and know what returns can the instrument offer in the WORST of the times (like March 2020) and the best of the times.

Lock-in Period? or how long should I stay invested for?

There's no lock-in period, but it is recommended to stay invested for 3-5 years for the best results.


As can be seen in the below graph, when the fund is held for 3 years, there has been ZERO instance when the investor has lost capital.

Below is an example of a hybrid fund and the graph shows the returns generated if an investor would have invested on any date in the last 10 years and stayed invested for 3 years

Worst return - 5.14% p.a. (in March 2020)

Best Return - 16% p.a.

Current Return - 11.5% p.a.

How safe are they?

Hybrid funds are offered by institutions like SBI, Kotak, ICICI, L&T, Axis. The best way to invest in them is to create a portfolio of 2-3 Hybrid funds (each offered by a different institution).


Applicable ONLY ON redemption. If redeemed after 1 year, the gain is taxed at 10%; while before that, tax applicable is 15% on gains made,

3. Don't miss this

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

If you'd like to build a portfolio for yourself to create a monthly income, reach us out on -

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