As the economy gets more open and more connected to the world, investing is becoming and will become more difficult. Once upon a time you bought a HUL, L&T, …(sorry I am saying all this with hindsight bias) and then hoped that life is easy.

You joined the government services and were sure that at age 90 years your widow will get a pension good enough for her to live with a lot of respect.

However going forward this is not going to happen. You will work for lesser number of years, and you are likely to live longer than your grandparents as perhaps your parents too.

How does one go about planning for ones retirement? Buy a pension plan from a mutual fund (there are only 2 of them and not at all suitable unless you are about 40 years of age ATLEAST), or from a life insurance company (too damn expensive in terms of amc charges, and with terrible uncertainty of how it will be distributed.


buy a pension plan (small amount for 80C benefit esp if you do not have an employer PF)

use your PPF (open one if you do not have it..but deposit only a small amount till you reach age 45)

do a SIP in a good well balanced fund (do not lose sleep whether it is large cap, small cap, etc. – if you are looking for names Franklin India Blue Chip, Flexicap, Hdfc Prudence, Icici Pru discovery,…) pick your poison.

Keep all these in a big Manila cover marked “Retirement” and religiously keep your monthly contribution going into it. At a younger age (22-50) keep putting highest amount into the EQUITY sip…then reduce the equity component.

By 55 your corpus should be ready…and you should plan withdrawal for age 58 …and beyond.


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  1. Yes sir.For many of our Readers…its here that we first time met words “Retiement and Retirement corpous”…Thanks to regular exposure ,we Identified our POISONS already and contributing (Even More in this MEGA SALE!)with 20 to 30 years of Horizon .Ever year we are increasing SIP by 10 % .I know our readers who put on same day of Salary ,their retirement contribution in Good Diversified Fund and taking only Balance Take Home to HOME..Thank U Sir

  2. You mentioned that “Buy a pension plan from a mutual fund (there are only 2)”, could you please tell which are these plans?

  3. Well there are 3.

    1. Tata Retirement Solutions from Tata Mutual fund

    2. UTI Retirement plan from UTI and

    3. Templeton India Pension plan – from Templeton.

    The Uti and Templeton plans have the 80C benefit..but the caveat that if DTC (direct tax code) as proposed goes through, all 3 will be on par

  4. Subra Sir, I just saw the Tata Retirement Solutions – it is very expensive charging 2.5% for a debt oriented speciality fund with a lock in. I am sure it will underperform the benchmark by a wide margin – given tracking errors and the hefty 2.5% charge on the debt side. Even assuming that they get decent returns on the debt side, am I not better off with Hdfc prudence and Hdfc MIP (LT)…then slowly increase the cont in Hdfc MIP…and reducing cont to Prudence once I turn 55? Right now I am 27…

  5. The way in which you give brilliant investment ideas is commendable.
    We really respect your simplicity in money management.

  6. hi Subra sir, (dtd: 07/09/2012 1.30am)
    i have read this post almost 100+ times.everytime with a new feeling. i like the words “YOU HAVE NO CHOICE OF DOING THE FOLLOWING”–indeed this is very correct and true(makes me feel that what an idiot i have been ).–let us put the sponge over it.
    iam 39 yrs savings as of now is only Rs.50000 .i don’t know how long my career can last.
    can u pls recommend me a reasonable insurance plan.
    i can invest atmost 500/month for the insurance .( this is required for my dependents).what can be the sum assured ?
    i plan to invest about about Rs.3500/month for (between hdfc prudence(1000)/hdfc balanced(1000) /frankin blue chip(1500)) for about 7-8 years religiously.

    Also btw pls write and post some more innovative and safe methods for building a good retirement corpus in these times as of now. iam deparately looking for this

    thanks & looking to your earnest reply


  7. Ganesh,

    I am novice, but will try from my side to give you some thing.

    1. As you have already picked your poison (between hdfc prudence(1000)/hdfc balanced(1000) /frankin blue chip(1500))
    Please do it ASAP with out delay. Both HDFC Prudence and HDFC Balanced are kind of same balanced funds. I will suggest to pick any one poison 🙂

    2. Emergency Amount (50,000) is way too less. I will suggest my personal favourite books 1.Retire Rich Invest Rs 40 a day from Subra 2. Jago investor – Change your relationship with money.

    3. Retiremement,Insurance Amount – is investing 3,500Rs good enough to create a corpus. These books might be able to get you the amount required for investing.

    If you could Hire yourself as a financial planner after reading these then good enough, else please take the help of professionals and hire a good financial planner for you.

    Subra sir,
    Please publish this one, only if you think it will be of any use to ganesh.

  8. I totally agree with Mr. Subra Sir. Actually we won’t depend on Govt or any company for pension. Better we save just 20% of our total income every year for pension then it will save our total retirement.

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