विशेषज्ञ की सलाह चाहिए?हमारे गुरु मदद कर सकते हैं
Ramalingam Kalirajan |10878 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Oct 24, 2024
Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Oct 23, 2024
I am 42 yrs old IT professional, looking for early retirement. Have 32 lakhs in MF, 30 lakhs in PF and 18 lakhs in PPF which is maturing next year. My q is can I invest 30+18 = 48 lakhs in SWP and can start withdrawing from day 1 ? What is the max amount I can withdraw per month from this 80 lakh corpus ? (32 lakh MF invested from last 1 yr + 48 lakhs in SWP)
Ans: You are in a solid financial position, with Rs 32 lakhs in mutual funds, Rs 30 lakhs in Provident Fund (PF), and Rs 18 lakhs in Public Provident Fund (PPF) maturing next year. This amounts to Rs 80 lakhs in total. You are considering investing Rs 48 lakhs (PF + PPF) in a Systematic Withdrawal Plan (SWP) and want to know how much you can withdraw monthly.
Let’s break down your situation, evaluate the potential of SWP, and suggest an optimal approach.
SWP: An Overview and Suitability
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your investments regularly. It’s a reliable way to create an income stream, but starting withdrawals from Day 1 may not be ideal for maximizing long-term returns. Since you are 42 and looking at early retirement, we need to assess whether SWP aligns with your retirement goals.
MF Corpus Growth: Your Rs 32 lakhs invested in mutual funds for only one year means it hasn’t had enough time to grow significantly. Ideally, investments need 3-5 years to harness the power of compounding.
SWP from Day 1: Starting SWP immediately from Rs 48 lakhs might limit the growth potential of your corpus, especially if market returns are volatile in the short term.
Understanding Withdrawal Rates
The most important factor in SWP is the withdrawal rate. Withdraw too much, and you risk depleting your corpus early. A sustainable withdrawal rate is around 4-6% annually.
Rs 80 Lakh Corpus: If you plan to withdraw Rs 48 lakhs via SWP and combine it with your Rs 32 lakh MF corpus, the total amount available is Rs 80 lakhs. With this, let’s assess possible withdrawal amounts:
4% Withdrawal Rate: You can withdraw about Rs 3.2 lakhs per year, which is around Rs 26,000 per month.
5% Withdrawal Rate: You can withdraw Rs 4 lakhs per year, which is Rs 33,000 per month.
6% Withdrawal Rate: You can withdraw Rs 4.8 lakhs per year, which comes to Rs 40,000 per month.
While these amounts seem manageable, remember that withdrawing too much can deplete your corpus too soon. It’s wise to start with a conservative rate, allowing your remaining investments to grow and generate returns.
Balancing Growth and Withdrawals
Growth Consideration: The Rs 32 lakh invested in mutual funds for the last year needs more time to generate substantial returns. I would recommend not immediately withdrawing from this corpus, giving it 3-5 years for better growth potential.
Inflation: Inflation will impact your purchasing power. So, a higher withdrawal rate may seem attractive now, but it can reduce the longevity of your corpus. Withdrawing at 6% per annum is aggressive and may lead to running out of funds in the future.
Potential Challenges of Early SWP
Taxation: Equity Mutual Fund gains are taxed differently under the current rules. Short-Term Capital Gains (STCG) are taxed at 20%, and Long-Term Capital Gains (LTCG) over Rs 1.25 lakh are taxed at 12.5%. You should account for these taxes when planning SWP withdrawals.
Market Risk: SWPs depend on the performance of mutual funds, which are market-linked. A market downturn can negatively affect your corpus, which is especially risky when you start withdrawing immediately.
A 360-Degree Solution
Diversify Withdrawals: Rather than withdrawing entirely from SWP, consider creating a diversified income stream. This includes using interest from your PPF and PF and combining it with SWP. This approach reduces the pressure on your mutual fund corpus.
Staggered Withdrawals: If possible, delay withdrawals from your mutual fund corpus for at least 2-3 years. Let the funds grow while you live off the PPF and PF interest income, reducing the stress on your SWP in the early years.
Use Debt Mutual Funds: For your SWP, invest a portion in debt mutual funds to reduce risk. While equity mutual funds offer higher growth, debt mutual funds provide stability and regular returns. This will help balance your overall portfolio.
Disadvantages of SWP from Day 1
Limited Growth Potential: Starting SWP withdrawals immediately limits the time for your corpus to grow. Ideally, a few years of compounding would increase your returns.
Depleting Corpus Early: If the market performs poorly, your regular withdrawals might eat into the principal amount. Over time, this could result in faster depletion of your corpus, especially if you withdraw aggressively.
Tax Impact: You’ll be liable to pay taxes on the gains you withdraw. If your withdrawals push you into a higher tax bracket, it will reduce the net income from your SWP.
Benefits of Actively Managed Funds over Index Funds
Active Funds Outperform in Volatile Markets: Actively managed funds can offer better returns during volatile or bear markets. Fund managers adjust the portfolio based on market conditions, while index funds track a fixed benchmark.
Flexibility in Strategy: Active fund managers have the flexibility to shift between sectors, rebalance portfolios, and use tactical asset allocation to outperform benchmarks.
Potential for Higher Returns: While index funds offer lower fees, actively managed funds have the potential to deliver higher long-term returns, especially when market conditions are favorable.
Final Insights
SWP is a good option for generating regular income, but starting it from Day 1 may limit your future growth potential. A conservative withdrawal rate of 4-5% is advisable to ensure your corpus lasts longer. Delaying withdrawals from your existing Rs 32 lakh mutual fund corpus will give it time to grow and offer higher future returns. Focus on creating a diversified, balanced approach with a mix of equity and debt mutual funds to minimize risks.
Early retirement is achievable with careful planning, but the sustainability of your income stream is key. Consult a Certified Financial Planner to fine-tune your strategy based on your specific retirement goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Let’s break down your situation, evaluate the potential of SWP, and suggest an optimal approach.
SWP: An Overview and Suitability
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your investments regularly. It’s a reliable way to create an income stream, but starting withdrawals from Day 1 may not be ideal for maximizing long-term returns. Since you are 42 and looking at early retirement, we need to assess whether SWP aligns with your retirement goals.
MF Corpus Growth: Your Rs 32 lakhs invested in mutual funds for only one year means it hasn’t had enough time to grow significantly. Ideally, investments need 3-5 years to harness the power of compounding.
SWP from Day 1: Starting SWP immediately from Rs 48 lakhs might limit the growth potential of your corpus, especially if market returns are volatile in the short term.
Understanding Withdrawal Rates
The most important factor in SWP is the withdrawal rate. Withdraw too much, and you risk depleting your corpus early. A sustainable withdrawal rate is around 4-6% annually.
Rs 80 Lakh Corpus: If you plan to withdraw Rs 48 lakhs via SWP and combine it with your Rs 32 lakh MF corpus, the total amount available is Rs 80 lakhs. With this, let’s assess possible withdrawal amounts:
4% Withdrawal Rate: You can withdraw about Rs 3.2 lakhs per year, which is around Rs 26,000 per month.
5% Withdrawal Rate: You can withdraw Rs 4 lakhs per year, which is Rs 33,000 per month.
6% Withdrawal Rate: You can withdraw Rs 4.8 lakhs per year, which comes to Rs 40,000 per month.
While these amounts seem manageable, remember that withdrawing too much can deplete your corpus too soon. It’s wise to start with a conservative rate, allowing your remaining investments to grow and generate returns.
Balancing Growth and Withdrawals
Growth Consideration: The Rs 32 lakh invested in mutual funds for the last year needs more time to generate substantial returns. I would recommend not immediately withdrawing from this corpus, giving it 3-5 years for better growth potential.
Inflation: Inflation will impact your purchasing power. So, a higher withdrawal rate may seem attractive now, but it can reduce the longevity of your corpus. Withdrawing at 6% per annum is aggressive and may lead to running out of funds in the future.
Potential Challenges of Early SWP
Taxation: Equity Mutual Fund gains are taxed differently under the current rules. Short-Term Capital Gains (STCG) are taxed at 20%, and Long-Term Capital Gains (LTCG) over Rs 1.25 lakh are taxed at 12.5%. You should account for these taxes when planning SWP withdrawals.
Market Risk: SWPs depend on the performance of mutual funds, which are market-linked. A market downturn can negatively affect your corpus, which is especially risky when you start withdrawing immediately.
A 360-Degree Solution
Diversify Withdrawals: Rather than withdrawing entirely from SWP, consider creating a diversified income stream. This includes using interest from your PPF and PF and combining it with SWP. This approach reduces the pressure on your mutual fund corpus.
Staggered Withdrawals: If possible, delay withdrawals from your mutual fund corpus for at least 2-3 years. Let the funds grow while you live off the PPF and PF interest income, reducing the stress on your SWP in the early years.
Use Debt Mutual Funds: For your SWP, invest a portion in debt mutual funds to reduce risk. While equity mutual funds offer higher growth, debt mutual funds provide stability and regular returns. This will help balance your overall portfolio.
Disadvantages of SWP from Day 1
Limited Growth Potential: Starting SWP withdrawals immediately limits the time for your corpus to grow. Ideally, a few years of compounding would increase your returns.
Depleting Corpus Early: If the market performs poorly, your regular withdrawals might eat into the principal amount. Over time, this could result in faster depletion of your corpus, especially if you withdraw aggressively.
Tax Impact: You’ll be liable to pay taxes on the gains you withdraw. If your withdrawals push you into a higher tax bracket, it will reduce the net income from your SWP.
Benefits of Actively Managed Funds over Index Funds
Active Funds Outperform in Volatile Markets: Actively managed funds can offer better returns during volatile or bear markets. Fund managers adjust the portfolio based on market conditions, while index funds track a fixed benchmark.
Flexibility in Strategy: Active fund managers have the flexibility to shift between sectors, rebalance portfolios, and use tactical asset allocation to outperform benchmarks.
Potential for Higher Returns: While index funds offer lower fees, actively managed funds have the potential to deliver higher long-term returns, especially when market conditions are favorable.
Final Insights
SWP is a good option for generating regular income, but starting it from Day 1 may limit your future growth potential. A conservative withdrawal rate of 4-5% is advisable to ensure your corpus lasts longer. Delaying withdrawals from your existing Rs 32 lakh mutual fund corpus will give it time to grow and offer higher future returns. Focus on creating a diversified, balanced approach with a mix of equity and debt mutual funds to minimize risks.
Early retirement is achievable with careful planning, but the sustainability of your income stream is key. Consult a Certified Financial Planner to fine-tune your strategy based on your specific retirement goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Asked on - Oct 24, 2024 | Answered on Oct 26, 2024
धन्यवाद, लेकिन मुझे नहीं लगता कि पीएफ या पीपीएफ से ब्याज की निकासी की अनुमति है। मुझे लगता है कि उन पीपीएफ और पीएफ को म्यूचुअल फंड में डालना और फिर निकासी शुरू करना बेहतर होगा?
Ans: सही है, परिपक्वता तक PPF या PF पर ब्याज निकासी की अनुमति नहीं है। परिपक्वता के बाद इन फंडों को म्यूचुअल फंड में स्थानांतरित करने से तरलता में सुधार हो सकता है और विकास की संभावना हो सकती है। म्यूचुअल फंड सिस्टमेटिक विड्रॉल प्लान (SWP) के माध्यम से लचीली निकासी की पेशकश करते हैं, जिससे एक स्थायी आय स्रोत बनता है।
सादर,
के. रामलिंगम, एमबीए, सीएफपी,
मुख्य वित्तीय योजनाकार,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
सादर,
के. रामलिंगम, एमबीए, सीएफपी,
मुख्य वित्तीय योजनाकार,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Asked on - Oct 26, 2024 | Answered on Oct 26, 2024
सही है लेकिन इससे आपका पिछला कथन निरर्थक हो जाता है..पीएफ और पीपीएफ से 50 लाख रुपए एमएफ में ट्रांसफर करना और फिर पहले दिन से ही निकासी शुरू करना पूरी रकम खत्म कर देगा। इसके बजाय मेरा मानना है कि 45 साल की उम्र तक 3 साल और काम करें (इसलिए एमएफ में अधिक एसआईपी करें) और 3 साल बाद पीपीएफ/पीएफ को एफडी में डालकर 7% प्रति वर्ष ब्याज लें..आप क्या सलाह देंगे
Ans: 45 वर्ष की आयु तक तीन साल अतिरिक्त काम करके म्यूचुअल फंड (MF) में SIP योगदान को बढ़ावा देना और साथ ही अपने PF और PPF को बरकरार रखना आपके रिटायरमेंट कॉर्पस को मजबूत कर सकता है। तीन साल के बाद, आप अपने PF/PPF कॉर्पस को लगभग 7% प्रति वर्ष के स्थिर रिटर्न के लिए फिक्स्ड डिपॉजिट (FD) में स्थानांतरित करने पर विचार कर सकते हैं। यह दृष्टिकोण नियमित आय उत्पन्न करते हुए मूलधन को सुरक्षित रखता है। आप आवश्यकतानुसार PF और PPF से आंशिक निकासी भी कर सकते हैं, जिससे कॉर्पस को तुरंत खत्म किए बिना लचीलापन सुनिश्चित होता है। यह रणनीति विकास को स्थिरता के साथ संतुलित करती है, आय स्रोतों को बढ़ाती है और आपकी रिटायरमेंट संपत्तियों को प्रभावी ढंग से सुरक्षित रखती है।
सादर,
के. रामलिंगम, एमबीए, सीएफपी,
मुख्य वित्तीय योजनाकार
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
सादर,
के. रामलिंगम, एमबीए, सीएफपी,
मुख्य वित्तीय योजनाकार
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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