How do I build a Rs 5 crore corpus for retirement?

Top HNIs Investment | Right Horizons
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Have you started working on your retirement goals? If not, you must start doing it irrespective of your age. The first part of retirement planning is to figure out the amount you will need to retire. On average, for retirement planning in India, a person in the upper middle class could try to build a Rs 5 crore corpus to give a sustainable future to your loved ones. This is because one needs to plan for inflation post retirement as well.

Assuming Rs 5 crore will be sufficient for you, how do you build the corpus? It is certain that if you don’t plan for it, it will not happen most likely. Also, the more you delay the planning process, the more difficult it gets. At Right Horizons, we encourage investors to start with their retirement plans as soon as possible.

How much to invest to accumulate Rs 5 crore at retirement?

The answer to this question depends on your current age. As mentioned earlier, the sooner you start, the easier it gets. Let us put some numbers in perspective to make sense of the point. You are young and have started investing for your retirement at the 25 to retire when you turn 60. You have 35 years to accumulate the Rs 5 crore corpus. Assuming an average return of 12% per annum, you only need to invest Rs 7698 per month. However, if you start at 30 years, with 30 years of tenure, you need to invest Rs 14,164 per month to achieve your target. At 35 years, the monthly investment you will have to make will be 3.5 times what it was at 25 years – you need Rs 26,349 per month.

We understand that retirement planning can take a backseat for most people as there are other priorities. However, after looking at these numbers, we hope that you won’t delay your retirement planning. In the later years, you will have more responsibilities – child education, home loan, etc. Paying a smaller amount in later years toward retirement is a great relief for every individual.

Where to invest for the retirement corpus?

Once you know the average return you need to get, you must look to invest in different financial instruments. Below are some financial instruments individuals can consider for their retirement corpus:

Direct Equity, Mutual Funds and PMS: Equity is a risky investment. However, when your investment horizon is long, the risk significantly comes down. You can invest in direct equity or take the mutual fund route across different categories – smallcap, midcap and large-cap. You can take assistance from a good financial advisor in India to invest in stocks, equity mutual funds or Portfolio Management Schemes with the potential to deliver high returns in the long run. If you are investing in equity on your own, you must know how to manage the risk.

ETFs: You can also invest in ETFs, especially index ETFs, which will give you returns in line with the market index that you choose. If your risk profile permits, you can also opt for international ETFs for diversification.

Other investment products: You can also invest into the Public Provident Fund (PPF) and National Pension Scheme (NPS) as they are long-term investment options with much-secured returns.

Is Rs 5 crore corpus enough?

There are so many factors that determine how much you need for retirement. When you start saving for retirement, your top priority should be to live a comfortable life and ensure that you don’t outlive the saved funds. To answer the question – Is Rs 5 crore enough, it will depend on many factors:

  • On your current and future lifestyle
  • Your expenses
  • The duration to your retirement
  • Life expectancy you assume
  • Your retirement goals


Start your retirement planning now and if you need assistance, get in touch with our expert advisor. They will evaluate your current financial situation, risk appetite, assess the corpus you need to build for your retirement and help you create a retirement plan to live the second inning of your life comfortably.

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