When I started investing in the 1970s, I did not know what ‘core’ in investing was. When I started running in 2008 I did not know what ‘core’ in running was! However what you understand by the English word ‘core’ is what ‘core’ means whether in investing or in running. Go to a gym or a running website it is full of tips on how to build your ‘core’ if you want to be a good runner. Or any sportsman.

Exactly how you build your retirement portfolio when you are in your 20s or at worst in your early 30s. To build a good solid core you need a lot of time – a multi decade pronged attack – helps in building a strong core. So typically you should do the following:

  • Join a company with a contributing provident fund (many small companies do not have one, never mind)
  • Start an equity fund with the clear view that it is for the retirement purpose alone and YOU WILL NOT INTERRUPT the fund

If you have joined a company on a good salary, but it does not have a good provident fund scheme in place, start a public provident fund account AND an ELSS account – with 90% of the amount going into the ELSS. Assuming you start a SIP/PPF combination of Rs. 12,500 a month (80C limit) then about Rs. 11,500 per month should go into an ELSS account and about Rs. 1000 in your ppf account. This combination should work till you are about 60 years of age when you may stop contributing for saving Income Tax.

THIS WILL BE CORE OF YOUR RETIREMENT PLAN. Assuming that the 80C limits get increased during the life time of investing keep increasing the amounts that you invest. Even better sign up for an increasing SIP so that there is an automatic increase of say Rs. 1000 a year. That is even better than investing a fixed amount every year for 30 years.

Keep checking the costs that you are incurring for building this portfolio. Honestly you can do it yourself, but I am making an assumption that you want to spend your weekends doing all this stuff. If you do not, find a good adviser and make sure he keeps your core intact! Remember this amount has to create a corpus that will look after you and your wife for about 40 years post retirement. It needs to pay for old age care, critical care, Long term care and medical requirements, etc. You cannot ignore this part of the corpus creation. So be at it. Like they say in hindi: “Lage raho”.

Work on your physical core too! Your longevity ensures that you will need to work far beyond 60. So be prepared for a longish career – health has to permit. If you are a professional like a doctor, lawyer or CA – remember the financial life starts at 40 and has to go on till 75 to justify the late start. If that has to happen, the core has to be strong. So join a gym, a fitness group, ..whatever and build a strong physical core too.


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  1. Dear Subra Sir,

    Plesae write an article on retirement planning for young NRI’s in their early 30’s as I have seen too many of them splurging like their is no tommarow.

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