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Goal: Accumulate 35% of income as net savings to reach ₹5 crore by age 60



Target net savings of 35% of pay for a corpus of ₹5 crore by age of 60

In a recent query, a 38-year-old individual earning ₹1.35 lakh per month expressed a desire to accumulate ₹5 crore for retirement. To achieve this ambitious goal by the age of 60, financial experts advise a net savings rate of 35%. This means saving at least ₹6 lakh annually, factoring in a 5% income growth and 7% inflation rate while aiming for investments to grow at 10% post fee and taxes.

For a long-term objective like retirement planning, experts recommend an aggressive investment strategy with 80% allocated to equities and the remaining 20% to debt. Diversifying investment schemes such as active flexi-cap, Nifty Index Fund, mid-cap active fund, and small-cap index funds, along with small savings schemes like PPF and corporate bonds, can aid in reaching the desired corpus.

It is crucial to refrain from using the retirement corpus for discretionary expenses, remain steady during market fluctuations, and gradually reduce equity exposure one to three years before retirement to mitigate risks. Considering the absence of social security benefits in India, meticulous retirement planning becomes imperative to secure financial stability in the later years.

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