Planning early retirement? How to build a ₹10 crore corpus by age 52

I am currently 42 and plan to accumulate ₹10 crore for my retirement. I would like to opt for early retirement by the time I am, say, 50 or a maximum of 52. So far, I have nearly ₹1 crore in my EPF account, while my other investments are direct equities of ₹23 lakh, ₹1.30 crore in mutual funds (MFs) and ₹20 lakh in bank fixed deposits. I can invest ₹1.3 lakh every month. I am looking for guidance on how to achieve this goal and what things I need to keep in mind.

—Name withheld on request

Early retirement is a common desire these days, and many would like to retire at the earliest given opportunity. Retirement goals are among the most important since the accumulated money is consumed over years and the post-retirement stage for most is quite long. Under normal circumstances, this is assumed to be 20-25 years. But this is longer if you are opting for early retirement. It is quite likely that those planning to retire early will take up some consulting or other engagement, but the income from such work is usually lower.

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Looking at all these factors, it is extremely important to have a sufficient amount before opting for early retirement. If we assume a life expectancy of up to 85, then you will have to plan for 33-35 years. We hope you have factored this into the ₹10 Cr corpus that you want to build for your retirement.

Looking at all your investments, and if we assume that they are mapped to your retirement, then your existing portfolio of direct stocks and MFs growing at an average of 12% per annum from here onwards should reach approximately ₹3.78 crore by age 50 and ₹4.75 crore at 52.

Similarly, your current EPF amount, at 7% p.a., should be around ₹1.71 crore by 50 and ₹1.96 crore at age 52. Here, your monthly contribution to EPF is not factored as we do not have the amount. Hence, the final amount from EPF should be higher than these numbers.

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Now, coming to the monthly investment of ₹1.30 lakh. This should help you build an additional corpus of ₹2.02 crore at 50 and ₹2.88 Cr at 52, assuming you invest this money in stocks and/or equity MFs which grow at 12% p.a.

If we calculate the total corpus considering all the investments at 50, it comes to ₹7.52 crore, and close to ₹9.60 crore by 52.

So, at present, you can plan for an early retirement age of 52 as your monthly investment in EPF will also add more to the above amount. You can invest in equity MFs monthly to build your corpus, as it is a more convenient way to invest in equities.

Harshad Chetanwala is CFP, co-founder at MyWealthGrowth.com