Can I invest in balanced funds and do STP to equity funds for retirement corpus

If we have understood your query well, then your main objective is to accumulate Rs 7 Crores for your retirement after 22 years, right?

Now, how you can achieve the goal is a function of how much you can invest in lump sum now or through SIPs or the method that you have outlined.

First, let us discuss your method. By investing in balanced funds you are actually investing a large part in equities (upto minimum 65%). Then why you want to do STP again to Equity funds is something we are unable to understand.

We think, you should keep it simple by following either of these three methods - 1) Do not invest in lump sum and instead Start SIPs of Rs 52,500 in diversified equity funds and/or mid cap funds for 22 years and you will be able to reach your retirement goal of 7 Crores (assuming return of 12.5%).

2) Invest Rs 25 Lakhs, which you have in hand now, into liquid or short term funds and do STP to diversified or midcap funds on weekly/fortnightly or monthly basis. But remember, you should not go for long term STPs as the markets are rising and you may not benefit from STP if the market is not volatile. Remain invested in the equity funds and this way you may be able to accumulate a corpus of around 3.5 Crores! For achieving the rest corpus of Rs 3.50 Crores, you should start monthly SIP of Rs 26,000.

The third way is to invest the lump sum straightway in selected equity funds and achieve rest part of the goal through monthly SIPs.

Here, we have not accounted your current SIPs as you have not mentioned the monthly SIP amount and the period since when you have started the same.

Hope the above helps! Thanks for writing to Advisorkhoj!