How To Build A Rs. 10 Crore Retirement Corpus

By | September 23, 2016

How To Build A Rs. 10 Crore Retirement Corpus

Don’t be scared away by those mind-boggling numbers that online retirement calculators throw up at you when you want to estimate your retirement finances. We’ll tell you how you can save big for your golden years with regular investments.

Let’s break it down for you with a simple example.

Consider that your present monthly expenses are Rs. 60,000. If you factor in inflation of 7% in the next 30 years, you will require upwards of Rs. 4.6 lakh per month to meet these expenses. If you continue down the same road, your retirement fund should have at least Rs. 9 crore.

Did we lose you right there?

Wait. Retirement won’t be so scary if planned well. The sooner you start saving for your golden years, the more comfortable you’ll be.

We’ll tell you how you can invest now to enjoy a sizable retirement corpus in your later years.

Mutual Funds

Experts in Mutual Funds give us over-optimistic assumptions. They claim that an SIP of Rs. 15,000 per month can accumulate to Rs. 10 crore in 30 years (not taking inflation into account). Sounds too good to be true? Here’s the catch. To achieve this corpus amount through Mutual Funds, you need to assume compounded annual returns at 15% over the next 30 years. As the investment is market-linked, you may or may not get this rate of return.

Life Insurance

Many Life Insurance policies available in the market give you a certain Sum Assured on retirement. But at what returns?

Before you think that Life Insurance is the best way to save for retirement, find out about the returns you will get. The returns generated through a Life Insurance plan are generally on the lower side. Consider this – An endowment policy that promises Rs. 10 crore after 30 years comes at a rather heavy price. The annual premium for such a plan would be approximately Rs. 12 lakh.

Additional Reading: Savings v Investments

 What can you do?

So, as far as retirement planning goes, we’ll give you a plan that can help you save up so that you can comfortably put your feet up. Let’s get started.

Increase your investments

Say you are already investing in your Employee Provident Fund or Public Provident Fund account or in equities. You only need to increase your investment amounts.

Think about this example.

You are 30 years old and your monthly paycheque is Rs. 50,000. Here’s what you can do.

Begin to save just 10% of your monthly income towards your retirement. Park these funds in an investment option that gives you at least 9% returns (like Debt Funds). By the time you celebrate your 60th year, your retirement fund balance would be Rs. 9.32 crore.

Here’s a better idea: Think about increasing your investment by 10% every year. This way you will have saved Rs. 2.76 crore.

Check This: Now Withdraw From EPF Without Restrictions

Have a portfolio with a good mix of investments

Let’s consider three categories of investors.

Risk-averse investors: These are the investors who put a long distance between themselves and equities.

Moderate investors: These investors have some exposure to equity investments.

Aggressive investors: These investors do not mind taking financial risks and have dabbled extensively in equities.

If each of these types of investors begins with a monthly investment of Rs. 15,000 across various retirement savings instruments and they increase their investments by 10% annually, this is what the outcomes would be.

  • The risk averse investor will have accumulated a significantly smaller corpus because his investments would predominantly be in Provident Fund schemes, small savings schemes, low-return Life Insurance policies and pension plans. Although Life Insurance policies give you assured returns and are tax-free, the returns these savings instruments generate are very low.
  • The moderate investor would have made investments of not more than 53% in equities. Therefore, the moderate investor will come close to achieving the Rs. 10 crore investment corpus.
  • The aggressive investor, on the other hand, will have an equity exposure that is slightly higher than 53%. The aggressive investor is able to achieve the goal of building a Rs. 10 crore retirement corpus.

Additional Reading: How Much Do I Need When I Retire?

Make disciplined investments

What is of utmost importance to reach your financial goals is to be disciplined in making regular investments. To achieve a Rs. 10 crore retirement fund, we have considered that you should be prepared to make regular investments for a period of 30 years.

To make money from your investments in equities, you must most importantly have a long term vision in place and the patience to allow your money to grow without thinking of making withdrawals.

In case your investment tenure is only for 1-2 years, a Rs. 10 crore retirement fund will only remain a distant dream.

It is important to plan carefully and execute these plans with a sense of discipline to achieve your financial goals. That is the essence of successful financial planning.

Additional Reading: Best Investments For The Next 10 Years

Are you ready to take on the challenge and build a Rs. 10 crore retirement fund?

You know where to begin. Start early, save more!

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit for the latest rates/offers.

2 thoughts on “How To Build A Rs. 10 Crore Retirement Corpus

  1. Y.kuthubuddim

    I have retired from the servive and request you sugget to invest amount reçeived. Kuhubuďdin

    1. Team BankBazaar

      Dear Kuhubuďdin,

      While we do provide general tips and advice on personal finance, we do not give specific investment advice. You can check this link to learn about available investment options.

      Team BankBazaar


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