I want to retire at 35

[bhagwad]

Ok, so I'm currently 31 years old and have saved up 23 lakhs in equity based mutual funds. My goal is to retire by 35, and put my money into some scheme that will support me for the rest of my life. I earn around 60k per month with no children and no one to support. It's just me. I don't even have to pay house rent.

Here are my calculations. I would appreciate anyone pointing out errors, flaws, and advice as to the best way to achieve my goals.

I want a regular income of 40-50k (in today's value) per month. This is just for my peace of mind. My actual expenses will be around 20k (in today's' value) and I'll continue investing whatever I don't spend to fend off inflation. Here are two strategies:

1. Reach 60 lakh (in today's value) in 4 years by continuing to invest in equity mutual funds as I've been doing all along. When I hit 35, I'll put it into debt instruments that will give me 8-10% returns p.a and I can live off the income for the rest of my life.

2. Reach 60L and just keep withdrawing for my requirements whenever I want. It's tax free since long term capital gains from equity investments are exempt and I won't spend it faster than it's growing and should easily keep up with inflation.

I would appreciate any insights, advice as to how to better achieve my goals, or anyone pointing out flaws in my calculations. Thank you in advance!

 

[bearishbull]

Ok, so I'm currently 31 years old and have saved up 23 lakhs in equity based mutual funds. My goal is to retire by 35, and put my money into some scheme that will support me for the rest of my life. I earn around 60k per month with no children and no one to support. It's just me. I don't even have to pay house rent.

Here are my calculations. I would appreciate anyone pointing out errors, flaws, and advice as to the best way to achieve my goals.

I want a regular income of 40-50k (in today's value) per month. This is just for my peace of mind. My actual expenses will be around 20k (in today's' value) and I'll continue investing whatever I don't spend to fend off inflation. Here are two strategies:

1. Reach 60 lakh (in today's value) in 4 years by continuing to invest in equity mutual funds as I've been doing all along. When I hit 35, I'll put it into debt instruments that will give me 8-10% returns p.a and I can live off the income for the rest of my life.

2. Reach 60L and just keep withdrawing for my requirements whenever I want. It's tax free since long term capital gains from equity investments are exempt and I won't spend it faster than it's growing and should easily keep up with inflation.

I would appreciate any insights, advice as to how to better achieve my goals, or anyone pointing out flaws in my calculations. Thank you in advance!

I would employ conservative as well as aggressive approach side by side.
1. Auto-renew 1-year FD of 1 lakh for each month of the year.
2. Invest directly into share market in probable multi-baggers in an event of market crash.

 

[bhagwad]

I would employ conservative as well as aggressive approach side by side.
1. Auto-renew 1-year FD of 1 lakh for each month of the year.
2. Invest directly into share market in probable multi-baggers in an event of market crash.

Interesting. I'd have to put in more than 1 lakh since I want around 45k per month. More like 5 lakh FD for each month of the year. That's a pretty damn good idea!

I'll have to pay tax though...but there might be no way of getting around that.

But thank you for the suggestion. First time I've heard of something like that. :clap:

 

[whisky]

bhagwad Cha gaye guru, retire 35 sahi jaa rahe ho, mere desh ka kya hoga:lol:

Thoko Tali:thumb::clap:

 

[pratapvb]

instead of putting 5lakh each in month FD that is your full 60L capital......

you could as suggested mix FD with equity

so say 2L montly auto-renew FDs....with quarterly interest credited to savings a/c (for your expenses)....= 24L in FDs

rest let it remain in appropriate MF for additional growth and withdraw from there only on need basis

 

[knarendra]

Post office saving schemes gives more interest than Banks

 

[bearishbull]

instead of putting 5lakh each in month FD that is your full 60L capital......

you could as suggested mix FD with equity

so say 2L montly auto-renew FDs....with quarterly interest credited to savings a/c (for your expenses)....= 24L in FDs

rest let it remain in appropriate MF for additional growth and withdraw from there only on need basis

If an FD of 2 lacs for each month is done, then you will be getting 18600 - 1860 = Rs. 16740 per month on maturity.

Rate of interest taken as 9%, compounded 9.3, TDS deducted at 10%.

So there is no need to go for quarterly credit of interest.

 

[bearishbull]

Interesting. I'd have to put in more than 1 lakh since I want around 45k per month. More like 5 lakh FD for each month of the year. That's a pretty damn good idea!

I'll have to pay tax though...but there might be no way of getting around that.

But thank you for the suggestion. First time I've heard of something like that. :clap:

Technically, FDs are not totally safe investments either. Only 1 lac is insured by the bank. So if you have 20 lacs in fixed deposit in different branches of a single bank, the bank is liable to pay you only 1 lac in case the bank goes under, suffers heavy losses, or something that is extraordinary and puts them out of business (rarity but possibility).

 

[bhagwad]

instead of putting 5lakh each in month FD that is your full 60L capital......

you could as suggested mix FD with equity

so say 2L montly auto-renew FDs....with quarterly interest credited to savings a/c (for your expenses)....= 24L in FDs

rest let it remain in appropriate MF for additional growth and withdraw from there only on need basis

This sounds like an excellent idea. There's also little danger of me withdrawing more than necessary and I can let the additional funds keep growing in equity. Awesome. Thank you!

 

[bhagwad]

Post office saving schemes gives more interest than Banks

Isn't there a limit on the amount of money we can invest in the post office schemes?