Rate of Return on Your Investment can Heavily Impact the Final Retirement Corpus.

Investing in Debt for Long Term Goals & Equity for Short Term Goals

The Table below Combines the Expected Rate of Return on the Various Asset Classes that are Used for Investment in India, The Respective Products & How Much Monthly Saving Is Required for the Same. The Actual Rates on Each of the Products May Vary, The Range of 6-7% For Debt Fund / Fd Is a Broad Range taken to Show the Impact on Accumulation. Similarly, Equity Mutual Funds Returns are Normally Assumed to Be in the Range of 12% By Various Sources.

If You Choose Debt Fund / Fd For Saving for Your Retirement, You Will Require Much Larger Amounts to Reach Your Goal. Allocating that Much Amount to a Single Goal of Retirement Might Not be Practical as You Will have to Current Living Expenses & Other Goals to Take Care of Too.

Some Automated Savings Like Your PF Deduction from Your Salary already Puts Amounts into Debt Basket; If You Further Keep Adding Many Other Debt Products to the Portfolio You Might Fall Short in Achieving Your Goal. Since Equity Is an Ideal Investment for Long Term It Is Advisable to Use this Asset Class to Save For Retirement. Since PF Already Takes Care of Debt, You Can Ignore PPF And Invest in Equity to Boost Up the Savings for Retirement.