Retirement planning: How to earn monthly income of Rs 1.5 lakh

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Key Points

The MF break-up is as follows: small caps (10%), index funds (30%), flexi & multi caps (15%), balanced advantage (10%), ELSS (10%) and large caps (25%)..

You can invest your gratuity and EPF corpus in long-term debt mutual funds, such as HDFC Long Duration Debt Fund and Nippon India Lakshya Nivesh, for predictable income..

Balanced advantage funds (BAF) and multi-asset funds (MAF) are a good category to earn 8-12% annually at risk levels that are higher than debt, but lower than equity..

Assuming you retire at 55 with Rs 2 crore, life expectancy of 80 years, 6-7% annual returns from debt products, and a monthly withdrawal of Rs 50,000, with 7% annual step-up (for inflation), your total withdrawals at the end of 25 years shall be around `3.81.

Hence, to be on the safe side, you should either increase your retirement corpus, push back your retirement age, raise your risk appetite to invest at least 20-30% in the equity asset class, or reduce your expenses..

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