Iwant to build a portfolio for retirement. I am planning to invest about Rs20,000 per month in mutual funds for the next 10 years. Please guide me.
MLF’s Reply: Equity mutual fund schemes can generate great long-term, tax-free returns, provided you invest in the right schemes. Since your investment horizon is 10 years, you could invest in equity schemes through a systematic investment plan (SIP).
By saving Rs10,000 per month, you would be able to accumulate a corpus of Rs23 lakh at the end of 10 years, assuming annualised growth rate of 12%. As your income increases, you could also save an additional amount towards retirement each year. If you increase your contribution towards retirement by 10% each year, you would be able to accumulate a corpus of Rs34 lakh.
You could also choose to save through equity-linked savings schemes or notified retirement fund schemes, to avail a tax rebate on the investment.
I am an NRI (non-resident Indian), 60 years old. I may have some money (about Rs25 lakh) to invest towards the end of February 2015. I am interested in getting maximum returns and can afford to take high risk. I have no taxable income in India. Could you kindly suggest the best mutual funds to invest in? I look forward to your expert advice.
MLF’s Reply: If you have a sufficient retirement corpus/income source that can cover your retirement expenses, you may take additional risk exposure for the long term. Equity mutual fund schemes can generate great long-term, tax-free returns, provided you invest in the right schemes. The key here is long-term investment which should ideally be for a period of at least five years.