Every goal gets the same three steps: what it will cost in the year you need the money, how many years you have, and how much risk those years allow. The monthly amount comes out of those three. The worked examples below use stated assumptions so you can see the arithmetic, and our goal planner lets you put in your own numbers.
The returns used here are assumptions for illustration, not promises. Shares can fall sharply in any year, which is why the time left to a goal decides how much of its money should be in them.
How much should I invest for my child's education?
Work out what the course will cost in the year your child starts, then invest the monthly amount that reaches it, moving into safer investments in the last three years.
Education costs have risen faster than general prices, so use a higher inflation figure for them than for household spending.
A worked example
- A course costs ₹25 lakh today and your child starts it in 15 years.
- At an assumed 8% a year education inflation, it will cost about ₹79 lakh.
- At an assumed 11% a year return, you need about ₹18,100 a month for 15 years.
- If you start at about ₹10,300 a month and raise it by 10% each year, you reach the same amount.
- Or about ₹16.6 lakh invested once, today, at the same assumed return.
How to hold the money
With ten years or more to go, an equity-heavy mix gives the money time to recover from falls. In the last three years, move what you have built into debt funds or deposits, so a bad year in the market does not land just before the fees are due.
Keep the education money separate from your other savings, so it is not quietly used for something else.
What else people use, and when it fits
- Sukanya Samriddhi Yojana, for a girl child: a government-backed scheme with a set interest rate and a long lock-in. It suits the safe part of the plan, not the whole of it.
- PPF: government-backed, with a 15-year lock-in. Useful for steady, safe savings alongside mutual funds.
- Child plans from insurers: they bundle life cover with investment. Term cover on the parent plus separate investing usually does the same job at lower cost. See our insurance planning guide.
- Investment apps with goal calculators: fine for running the numbers and a SIP yourself, if you will also make the move to safer investments on time.
How much should I invest for retirement?
Invest enough to build a corpus that pays your expenses, rising with inflation, for the whole of your retirement. Under the assumptions below that corpus is about 22 times your first year's expenses in retirement. A longer retirement or lower returns push it towards 25 to 30 times.
A worked example
- You are 30, spend ₹50,000 a month today and plan to retire at 60.
- At an assumed 6% a year inflation, the same lifestyle costs about ₹2.87 lakh a month at 60.
- To fund 25 years of retirement, with the corpus assumed to earn 7% a year while you draw from it, you need about ₹7.7 crore at 60.
- At an assumed 11% a year until then, that is about ₹30,500 a month for 30 years.
- Or about ₹11,200 a month to start, raised by 10% every year.
Starting later costs more. The same plan begun at 40, with 20 years to go, needs about ₹52,800 a month, or about ₹25,400 to start with a 10% yearly step-up.
What counts towards it
Your EPF balance, NPS, PPF and existing mutual funds all count towards the corpus. Add up what they are likely to be worth at retirement and invest only for the gap. Our retirement calculator does this with your own numbers.
What else people use, and when it fits
- EPF and PPF: steady and government-backed. They form a good safe base, but on their own rarely grow fast enough for a long retirement.
- NPS: low cost, with money locked until 60 and rules on how much you can take as a lump sum. It suits people who value the lock-in.
- Pension and annuity plans from insurers: they give a guaranteed income, often at a low rate. They are worth a look close to retirement, less so as a way to save for it.
How should I plan investments for buying a home in the next 5 years?
Keep most of the money out of shares, because five years is too short to be sure of recovering from a fall. Use fixed deposits, recurring deposits or short-term debt funds, and aim for the down payment plus the costs a home loan does not cover.
How much you need
Banks lend only part of a home's value. RBI's limits let a bank lend up to 90% for loans up to ₹30 lakh, 80% for loans above ₹30 lakh and up to ₹75 lakh, and 75% above that. Stamp duty and registration come on top and are usually paid from your own money. They vary by state.
A worked example
- A home costs ₹1 crore when you buy it.
- A 25% down payment is ₹25 lakh. Stamp duty, registration and other costs, assumed at 7%, add ₹7 lakh.
- You need about ₹32 lakh in five years.
- At an assumed 7% a year, that is about ₹44,700 a month for 60 months.
- If you already have ₹10 lakh saved, it grows to about ₹14 lakh at the same rate, and the monthly amount falls to about ₹25,100.
Before you commit
Check the EMI the loan will need against your take-home pay, and keep an emergency fund apart from the down payment. A down payment that empties every other account leaves you exposed in the first year of the loan.
Ways to plan for a goal, side by side
| Plan it yourself with a calculator | Investment app with goal tracking | Mutual fund distributor | Insurer's child or pension plan | SEBI registered investment adviser | |
|---|---|---|---|---|---|
| Who does the planning | You | You, with the app's prompts | The distributor, for the funds they sell | Built into the product | An advisor, across all your goals |
| How you pay | Only the funds' costs | Only the funds' costs, if the app offers direct plans | Through regular plans' higher costs | Charges inside the policy | A fee you agree in writing |
| Looks at all goals together | If you do | Partly | Rarely | No, one goal per policy | Yes |
| Usually suits | One goal, steady saving, confident investor | A few goals, happy to run them alone | Someone who wants help buying funds | Someone who wants a fixed, guaranteed outcome and accepts the cost | Goals that compete for the same money |
Where we fit, and where we do not
Invsify is a SEBI registered investment adviser (INA000020572). Invsify Private plans goals, investments, insurance and tax together for ₹8,999 a year, fixed, with no commissions. Our advisory team reviews the plan with you as your life changes.
If you have one goal and you are already saving for it steadily, you do not need us. A calculator, a direct plan and the discipline to move to safer investments on time will do. We are most useful when a child's fees, a home and retirement all draw on the same income and you want help deciding what comes first.