Through the Looking Glass

DNA One needs to understand how big the retirement corpus needs to be to lead a comfortable life in the golden years Aman Jain, 27, is an MBA from a top-rated business school with a great job with a major retail chain. He has recently married his batchmate, Namita (also 27), who has a similar work-profile. Both live in a rented apartment in central Mumbai. Their parents have settled in their respective home towns and are well provided for. Both have good jobs which pay them Rs 35,000 each every month. They have now started thinking about their retirement. They need to understand how big their retirement corpus needs to be so that they can lead a comfortable life in their golden years. They both expect to retire at the age of 58. Let us understand a few concepts before determining their pre-retirement corpus requirement: 1. Life expectancy: With increasing medical progress, life expectancy is increasing. The average life expectancy in India is around 63 years. Urban and afflu

DNA "Where do I park my money for the best returns?" is a standard investor query. The standard answer might well be, "put it in equities and forget it for 5-7 years." But, while there is no denying the power of equities to deliver phenomenal returns over the long term, some tactical moves can help you enhance the returns on your portfolio in the short run. Investment in debt mutual funds, for one, allows you to take a bet on the changes in interest rates and credit quality that can help you get some extra returns. What is a debt mutual fund? A debt mutual fund invests in fixed income securities. In India, the government is the largest issuer of these securities (due to its need to finance its expenses and investments), followed by banks (which issue fixed deposits) and corporates (which issue commercial paper). These funds also invest in securitised papers. The securities issued by a borrower can mature anywhere between 15 days to 30 years. A debt mutual