FINANCE SPECIAL..... Start with any sum of investment and be consistent

Start with any sum of investment and be consistent

I am a 40 year-old man and will be retiring at the age of 58. My monthly salary is Rs 70,000 and expenses goes upto Rs 40,000. I haven't done any investments till now and also don't have a health insurance. Can you please advise how should I start my retirement plan which will secure my old-age life?

- Saurav Gupta

Ramesh Barli replies

Early investments often reap great returns. While one should ideally begin building a retirement corpus at the age of 35, you don't lag behind. At this point in time, you still have 18 years to build on your savings.

One must begin investing depending upon their risk profile. Ideally, a balanced risk profile of 50% equity and 50% debt funds are recommended. Investing in Mutual Funds and SIP are a good bet. A monthly saving of Rs 25,000 - 35,000 through Systematic Investment Plan (SIP) will help you save Rs 54,00,000 to 75,00,000 by the time you retire. Also, equity plans will give you better returns in the long run.

While investing in Mutual funds, it is important to keep a check on your portfolio and make the most of market volatility.

When speaking about building a corpus for your retirement, at a time where you spend about Rs 40,000 to Rs 50,000 a month, your savings should be anywhere between Rs 3 to 4 crores in keeping with the current 5% inflation. To make this happen, early and consistent investments are a must.

With a chance of your monthly income increasing, your purchase of funds and investment savings must also increase. You must capitalize the money you receive as bonus or a windfall.

Regarding your health insurance, I would advise you to invest in it right away. Today's day and age bring with it lengthy medical bills. And at times of crisis, when there are no insurance plans in place, your entire corpus may be disturbed. These insurance plans come handy when one is struck by a serious illness. No insurance plans can derail your saving plan as well.

Make sure that while you save, you do not touch your savings at any time. All your investment schemes will only work if you strictly adhere to your monthly commitments. This will help you to create a good corpus over a period of time and lead a comfortable yet financially secure life.

The writer is fiinancial advisor from Chinchwad

This article has been exclusively created for UTI SWATANTRA