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Q: 60-year-old Vijay Sharma writes us from Hyderabad. I would like to invest lump sum amount of Rs 10 lakh now and after three years, when I am 63-year-old, I would like to withdraw Rs 15,000 every month in systematic withdrawal plan. I would never like to withdraw everything. Please suggest a mutual fund.
A: Several issues with your plan. Firstly, Rs 15,000 today will not be the same as Rs 15,000 in five or ten years' time. Secondly, if this is the only retirement corpus you have, it will not be sufficient for a long time even if you assume fixed withdrawal of Rs 15,000 every month. If you are a risk taker and invest in a balanced advantage fund, you can at best safely assume a return of around 10 percent. Withdrawal of Rs 15,000 every month starting after three years will last you a maximum of 13 years (i.e. till 76 years). Either you should increase the corpus amount or look at decreasing your monthly withdrawal or it will last you only till your 76 years that too without inflation adjustment to the Rs 15,000 every month. Seek professional help please.
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