A retirement corpus of Rs 5 crore may seem impossible for a middle-class salaried person to achieve. Still, if investments are made systematically, the road to the goal becomes much smoother and easyl. According to personal finance experts, investing early will put you in a better position to reach your financial goals. 

They claim that investment discipline is just as crucial as income to build a significant retirement fund. They claim that investing in index funds, long-term mutual funds,  and diversified portfolios may accomplish the financial objective of Rs 5 crore. Here is how.

Strategy of Investment

If you begin investing at age 25, attaining the goal will take 35 years. By investing just Rs 7,698 a month, you can accomplish the goal of INR 5 crore assuming an annual return rate of 12%. Similarly, if you begin investing at age 30, you have 30 years to build a retirement corpus before hitting 60.

Several variables, like spending more on pleasures and focusing more on short-term objectives, may contribute to delayed retirement preparation. Delaying retirement preparation, however, may increase your burden because the longer you wait, the more aggressively you will need to invest in the future. Thus, this is what you should do.

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Boosting the Contribution Percentage to the SIP 

Several personal finance specialists advise step-up investment techniques. The step-up strategy is increasing the SIP allocation annually by a specific percentage as income rises. According to some financial counsellors, starting out by investing through the SIP route in equities mutual funds will be wise. 

After five years, you can progressively transfer to debt or hybrid funds. To accumulate INR 5 crore in 30 years, you must put away INR 7,000 per month during the first year and increase the SIP (systematic investment plan) amount by 10% yearly. 

This is based on the assumption that the investment horizon is 30 to 35 years, and the investment registers a CAGR of 12% during the first 25 years and 10% during the last 5 years. 40% of the allocation should go to large caps, 30% to small caps, and 30% to mid-caps.

Putting money into two or three balanced funds 

You should consider investing in two to three balanced funds (aggressive hybrids) or multi-cap funds. If you invest in a balanced fund, you will not have to worry about rebalancing it. 

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Generally, balanced funds will maintain an equity-to-bond yield ratio of 70% to 30%. Although a multi-cap fund will be slightly more risky than a balanced one, it can provide higher returns. 

Possessing two multi-cap funds

Having two multi-cap funds—one mid-cap and one small-cap—is another portfolio development option. Although this fund’s composition is a little more aggressive, it offers strong returns on rising markets for longer.

If you wait until it is too late to invest, you can still amass a retirement corpus of INR 5 crore by investing Rs 26,000 monthly for 15 years at a realized return of 25% annually. Any portfolio must be diversified; one option is to diversify using debt and equity assets.

Building a Lasting Corpus 

According to an independent tax and investing expert, you should invest 40% of your portfolio in index funds that represent the Nifty 50 and the Sensex and divide the remaining 50% between mid-cap and small-cap stocks to build a long-term retirement corpus with, say, a 30-35-year time horizon. You will receive an average return of at least 12% from it. 

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Since interest rates have decreased, index funds’ predicted returns have decreased from their historical range of 15–16% to just around 12%. It is also suggested that you close non-performing mutual funds and check mutual fund performance regularly. 

But once you have reached your objective and are near 60, you should transfer your money to more secure investment vehicles, such as senior citizen investment plans, where the rate of return is greater than 7%.

Your guaranteed pension under the plan will be 7.40% each year, payable monthly. You are guaranteed to receive the stated pension payment rate for 10 years beginning on the policy’s purchase date.


Ageing is a permanent process. Your financial and physical well-being are equally vital. The ideal time to begin retirement savings is as soon as you begin working. This enables you to make tiny investments and accumulate a sizable capital, like Rs. 5 crore. 

The amount to invest each month should also be determined based on retirement age. By doing this, you will make sure that when you hang up your boots, your finances are still comfortable.