Ask Money Today: Would I be able to retire at age 41 with Rs 3 crore

I am 41 years old. I live in my own small flat in Pune. I do not have any pending loan. My parents get a government pension and we live together. My monthly expenses are Rs 50,000. I have no plans to marry or have children. So far, I have created an investment corpus of Rs 3 crore invested as below:

Rs 2.3 crore in equities

Rs 20 lakh in debt

Rs 50 lakh in bank FDs

Rs 15 lakh in Public Provident Fund ( PPF).

I am clueless about what life expectancy should I assume. Given my financial situation, is it a good idea for me to retire now?

-Tejas Gokhale

By Anup Bansal, Chief Investment Officer, Scripbox

Tejas, Life expectancy may be between 80 and 85 years. You need to ensure that your corpus is sufficient for the next 45 years if you are planning to retire now. A prudently invested portfolio should grow faster than inflation, however let’s assume that your investments grow at the same rate as inflation for the sake of conservatism. With this assumption, the estimated corpus needed is Rs 2.7 crore. Here is an example of the corpus requirements for a monthly expenditure of Rs 50,000 with various returns and inflation numbers.

Considering your parents get a pension, I assume they don’t rely on you. Also, you don’t seem to have any liabilities, so you don’t need life insurance. I would suggest you insure your parents and yourself with a good health insurance, if you haven’t already done so. Your equity allocation is currently 70%, which should be reduced by 10-15% if you decide to retire now. It might be a good idea to conduct a risk assessment exercise on your own with the help of a Financial Advisor.

Having reviewed your information, it appears you have managed your finances prudently and achieved financial freedom. I would like to congratulate you on your success and wish you the best in the future.

(Views expressed by the investment expert are his/her own.)

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