Everyone looks forward to a safe and peaceful retirement period. During this time, financial security is important because there is usually no stable income after people stop working.
Savings built during working years help cover daily expenses, medical needs, and emergencies. It is important to plan carefully and ensure that your finances are secured. Some people take years of advance planning to ensure that they are able to support their lifestyle even during retirement years.
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Planning early makes a big difference, allowing people to benefit from the power of compounding through regular investments, pensions and other funds. These days, one of the popular retirement goals is to have Rs 1 lakh per month of income. Many people feel that such an amount can certainly help out in allowing them to live a comfortable life and enjoy time with their families.
But what is the best way to reach this goal, and how can people navigate this path towards easy retirement years? Saving early, investing regularly, and managing expenses wisely is key. However, knowing where to invest and how much to invest is equally important.
Ideal Corpus Value
Experts say a single senior citizen may need around Rs 2-2.5 crore in savings to maintain a monthly expense of about Rs 1 lakh in today's purchasing power (for 20 years). In India, there are many tools available such as equity mutual funds, senior citizens savings schemes (SCSS), fixed deposits, etc, which can help people attain a comfortable retirement corpus.
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According to Vinit Rathi, CEO of Avisa Wealth Creators, retirees who prefer an equity-free corpus may need about Rs 1.6-1.8 crore. This estimate assumes 7-8% annual returns from fixed-income options such as post-office schemes.
Here's What He Suggests:
Time Horizon / Bucket | Investment Instrument | Suggested Allocation | Purpose |
0–1 year expenses | Savings account and liquid funds | 1 year of expenses | Provides immediate liquidity |
1–3 years | Short-term fixed deposits | Portion of corpus | Offers stable returns while keeping funds relatively accessible; near-term outlook. |
3–7 years | SCSS and POMIS | Aligned with 5-year tenure | Generates predictable income from government-backed schemes; good for medium term plans |
Long-term growth bucket | Equity mutual funds | 20%–40% of corpus | Provides growth potential to help beat inflation and support long-term financial security. |
How Much Investment Is Needed?
With just equity-oriented corpus, one needs around Rs 25,000 per month (expected return rate of 12%) for over 15 years to generate over Rs 2 crore corpus at a 10% annual step-up. A step-up refers to an investor's approach to increase investment at a certain frequency, such as yearly.
However, to balance the portfolio, experts recommend diversification across segments to ensure the investor can meet both short and long-term goals. In such cases, the best approach to asset allocation can be discussed with a certified financial advisor. This ensures that professional guidance can help plan investments wisely, reduce risks, and avoid stress.
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