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Wouldn’t it be amazing to retire early and still enjoy a luxurious, stress-free life?
No bosses, no deadlines—just peace, comfort, and the freedom to live life your way.
But here’s the big question: How much money will you actually need every month after you retire?
Most people assume their current expenses will remain the same during retirement. But is that really true?
There’s a silent financial villain at play—inflation. It quietly inflates your expenses every year.
For instance, if your current monthly household expense is ₹80,000, how much do you think you’ll need 15 years from now to maintain the same standard of living?
With an average inflation rate of 7%, that ₹80,000 expense will balloon to around ₹2 lakhs per month by the time you retire.
Are you preparing for that?
Table of Contents:
1. No Pension? No Problem – Create Your Own!
2. How Much Monthly Income Do You Need After Retirement?
3. What Happens When You Invest ₹2.6 Crore?
i) Conservative Investors
ii) Moderate Investors
iii) Aggressive Investors
4. Ideal Allocation of ₹2.6 Crore for ₹2 Lakh Pension
5. Can You Really Get These Returns?
6. Key Points to Remember
7. Final Takeaway
1. No Pension? No Problem – Create Your Own!
The traditional pension system is mostly a thing of the past.
But does that mean you can’t have a regular income during retirement?
Of course not! You can build your own pension through disciplined investing.
Start early. Stay consistent. Invest in high-growth assets like equity mutual funds and hybrid funds.
If you begin investing from your 20s or 30s, you’ll have the power of compounding on your side.
2. How Much Monthly Income Do You Need After Retirement?
Let’s say you want to receive ₹2,00,000 every month during your retirement years to maintain your current lifestyle.
To find out how much retirement corpus you need to generate this income, we assume:
- A life expectancy of 85 years
- Retirement age of 60
- An average post-retirement returns of 9% per annum
- A withdrawal rate that allows the corpus to last 25 years
So, how much retirement corpus is needed for ₹2 lakh monthly pension in India?
You will need approximately ₹2.6 crore at the time of retirement.
This corpus, when invested wisely, can comfortably provide a monthly income of ₹2 lakhs for the next 25 years.
Now comes the next important question—what is the best investment option to get ₹2 lakhs monthly pension?
The most efficient strategy would be to build this ₹2.6 crore corpus as your retirement pension is through SIPs in equity mutual funds during your working years.
Then, post-retirement, you can shift a portion into SWP (Systematic Withdrawal Plans) of hybrid or debt mutual funds.
This setup not only gives you monthly income but also offers tax efficiency and capital preservation.
3. What Happens When You Invest ₹2.6 Crore?
Now let’s focus on how to use that ₹2.6 crore to generate a monthly pension of ₹2 lakhs.
By smartly allocating your retirement corpus across a mix of debt and equity investments, you can create a steady income stream that beats inflation and saves on taxes.
But here’s the key—your portfolio needs to match your risk tolerance.
Are you a Conservative, Moderate, or Aggressive investor?
Let’s explore how different investors can approach retirement planning.
i) Conservative Investors
Conservative investors prefer safety over high returns.
But can low-risk instruments generate enough to meet the ₹2 lakh/month target?
Let’s see.
Suggested Allocation for ₹2.6 Crore Corpus
| Investment Type | Amount Invested | Expected Return % | Monthly Income (₹) |
|---|---|---|---|
| Fixed Deposit (FD) | ₹65 Lakhs | 7% p.a. | ₹37,875 |
| Senior Citizen Saving Scheme (SCSS) | ₹65 Lakhs | 8.2% p.a. | ₹44,145 |
| Debt Mutual Funds | ₹65 Lakhs | 8% p.a. | ₹43,325 |
| Hybrid Mutual Funds | ₹65 Lakhs | 10% p.a. | ₹54,170 |
| Total | ₹2.6 Crore | ₹1,79,515 |
Even after careful allocation, the total monthly income falls short of ₹2 lakhs.
So, should conservative investors build a larger corpus or increase their allocation to higher-return instruments?
That depends on your comfort with risk—but without equity exposure, beating inflation becomes tough.
ii) Moderate Investors
Moderate investors aim to strike a balance between safety and growth. This category has slightly more equity exposure.
Suggested Allocation for ₹2.6 Crore Corpus
| Investment Type | Amount Invested | Expected Return % | Monthly Income (₹) |
|---|---|---|---|
| Fixed Deposit (FD) | ₹39 Lakhs | 7% p.a. | ₹22,725 |
| SCSS | ₹39 Lakhs | 8.2% p.a. | ₹26,455 |
| Debt Mutual Funds | ₹65 Lakhs | 8% p.a. | ₹43,325 |
| Hybrid Mutual Funds | ₹1.17 Crore | 10% p.a. | ₹97,395 |
| Total | ₹2.6 Crore | ₹1,89,900 |
We’re getting close!
A slightly higher allocation to large-cap mutual funds or a corpus of ₹2.75 crore may help you hit the ₹2 lakh/month goal.
Isn’t it worth optimizing your portfolio to achieve that?
iii) Aggressive Investors
Aggressive investors focus more on equity, seeking higher long-term returns while accepting more volatility.
Suggested Allocation for ₹2.6 Crore Corpus
| Investment Type | Amount Invested | Expected Return % | Monthly Income (₹) |
|---|---|---|---|
| Fixed Deposit (FD) | ₹39 Lakhs | 7% p.a. | ₹22,725 |
| Debt Mutual Funds | ₹39 Lakhs | 8% p.a. | ₹26,000 |
| Hybrid Mutual Funds | ₹91 Lakhs | 10% p.a. | ₹76,000 |
| Equity Mutual Funds | ₹91 Lakhs | 12% p.a. | ₹91,000 |
| Total | ₹2.6 Crore | ₹2,15,725 |
This strategy slightly exceeds the target, providing a cushion for inflation or emergencies.
Wouldn’t that feel more secure?
4. Ideal Allocation of ₹2.6 Crore for ₹2 Lakh Pension
Here’s a model portfolio that smartly blends safety, growth, and inflation protection:
| Investment Type | Investment Amount | Expected Return % | Monthly Income (₹) |
|---|---|---|---|
| Post Office FD | ₹60 Lakhs | 8.2% | ₹41,000 |
| Equity Savings Funds | ₹40 Lakhs | 7.5% | ₹25,000 |
| Hybrid Funds | ₹1 Crore | 10% | ₹83,335 |
| Large Cap Mutual Funds | ₹60 Lakhs | 12% | ₹60,000 |
| Total | ₹2.6 Crore | ₹2,09,335 |
Doesn’t this look like a smart, diversified strategy to meet your monthly pension goal?
5. Can You Really Get These Returns?
Some may ask—is this too optimistic?
Let’s look at real data:
- Equity Savings Funds have delivered 8.6%+ annual returns over the last 3–5 years.
- Hybrid/Balanced Advantage Funds have averaged 11%–12.6% in the past 5 years.
- Flexi Cap Funds (in the equity category) have shown 16%–18% average returns in the past 5 years.
So, yes—these return estimates are realistic and even slightly conservative.
6. Key Points to Remember
✅ Tax Benefits
- Under the new tax regime, senior citizens get up to ₹7 lakh tax exemption.
- Equity and hybrid mutual funds held for over a year qualify for low long-term capital gains tax (only 12.5% on gains exceeding ₹1.25 lakh/year).
✅ Inflation Protection
Your investments must beat inflation to retain purchasing power. That’s why a strong equity and hybrid component is crucial.
✅ Withdrawal Strategy
Use a Systematic Withdrawal Plan (SWP) to withdraw a fixed amount monthly. This preserves your corpus and allows adjustments for inflation each year.
✅ Risk Tolerance
Don’t go 100% into equity. Diversify smartly based on your risk tolerance. Even a 30%–40% equity allocation can provide strong inflation protection.
7. Final Takeaway
Achieving a ₹2 lakh monthly pension isn’t reserved for the ultra-rich.
It’s absolutely possible for anyone with the right financial discipline and strategy.
✅ Start early
✅ Stay invested
✅ Diversify wisely
✅ Adjust annually for inflation
Your retirement shouldn’t be about cutting costs. It should be about enjoying the rewards of your hard work.
Want a personalized retirement plan? Talk to a Certified Financial Planner (CFP) today and build your roadmap to financial freedom.
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