Ask us: on investments

If your returns turn out to be higher than what we assumed, you will not need a steep amount to save.

A. We are not aware of what return expectations you have and whether you have based your goal amount on such return estimates. But kindly avoid any assumption that the current stock market return will continue. If we assume a 12% annualised return (which can come with about 60-70% equity investments) for the next 5 years, and a 10% return (as markets mature returns dwindle) for a 20-year period, and 9% return for the remaining goals, you will need the following monthly sums for your goals: ₹38,000 per month for your 5-year goal, ₹6,600 per month for your 20-year goal. ₹1.32 lakh per month for your 25-year goal and ₹15,000 for your 30-year goal. That totals to 1.91 lakh per month of savings. While you may not have this sum right away, start upping your savings every year gradually making sure the immediate goals are first met. That will free up more savings to deploy in future goals.

If your returns turn out to be higher than what we assumed, you will not need a steep amount to save. But since you do not have any control over the returns, the best you can do is keep your expectation toned down and save more steadily. For the 5-year goal, consider a 60:40 equity debt portfolio (assuming you have a moderate risk appetite). Use Nifty 50, Nifty Next 50 and Nifty Midcap 150 index based passive funds for equity and use short duration and ultra-short duration funds for debt.

For the remaining follow a 70:30 equity debt allocation. To the same index funds we mentioned add indices like Nifty 500 Nasdaq 100 and Nifty Low Vol index based funds/fund of funds. For debt it can be the above funds plus corporate bond funds plus PPF investments. Ensure your exposure to midcap funds or Nasdaq 100 funds are not over 10-15% each of your overall allocation as these are high risk and can cause your investments to swing up and down.