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Ans: Hi,

Lets understand the value of your current Investments at the time of retirement. Below is the list with its current value and (expected rate of return).
Emergency Fund - 25 lakhs (3.5%)
Fixed Deposits - 65 lakhs (7%)
PF/PPF/NPS - 25 lakhs (8%)
MF/Stocks - 25 lakhs (10%)
LIC Policies - 25 lakhs (no change)
Your current investments listed above will achieve a value of 3.5 crore at the time of retirement 4 years from now.

Apart from this you have mentioned properties worth 7.25 Cr. Assuming you will only use/liquidate them if required, so excluding them from consideration for now.

You total income is 2.30 lakhs per month (includes rent) and expenses are 75k per month. So there is potential to add to the above investments for the next 4 years.

I will assume your current expenses are sufficient for the lifestyle you want to continue post retirement.
You will require a corpus on retirement after 4 years to sustain your expenses adjusted with inflation of 6% which will be close to 1 lakh per month (at the time of retirement).
With this starting point, and adjusting for inflation of 6% each year, and life expectancy of 30 years post retirement you need a corpus of approx. 2.5 crore - again assumed this will earn a return of 8% for the 30 years.
If you can invest wisely and generate a slightly higher return of say 10%, the corpus requirement will be 2 crore.

Your current investments at the time of retirement with value of 3.5 crore is sufficient to cover your expenses for the next 30 years inflation adjusted at 6%.
And this is excluding the properties you own and additional investments you can make for the next 4 years.

Summary - You are more than stable as far as your financial state is concerned. You have a strong base to meet your retirement needs and also a potential to create wealth for the generations ahead.

I want to highlight/recommend few points -
1. Increase the medical Insurance for yourself and family to 1Crore as medical expenses will only increase in future.
2. Stop the Term Life Insurance and save the premium for investment. As you have no liabilities and net-worth is high enough to cover any outcomes in life ahead, this premium is a lost cause considering your strong financial state.
3. Revisit the LIC Policies you have and consider surrendering/stopping them if they are not nearing their maturity. They are not giving you enough cover and providing below par returns. So do discuss with a trusted licensed advisor and evaluate them. If they will mature in the next 4 years, ignore this point.
4. Post retirement period is a long duration of 30 years, so do consider getting a good advisor - a Certified Financial Planner who can guide you to plan your retirement well and help you design a portfolio for additional wealth creation as a legacy for your children/dependents.


Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Shaks,

Your query will resonate with many working professionals.

First and foremost, please check/calculate if you have capital gains arising out of the sale of your current flat. This is important for tax implication and will also help make your decision for utilizing the funds.

Lets assume you have some capital gains from this sale, then you can again have to confirm if the capital gains can be utilized without paying tax on it - this is possible if you have purchased the new flat within the last 1 year. If so, then you can utilize/adjust the capital gains towards payments made for the new flat and save tax on it. If you have purchased the new flat earlier than the last 1 year, then you have 2 options - pay tax on the capital gains and then use the funds as you wish OR invest the capital gains amount in NHAI bonds (locked) for the next 5 years (pay tax only on the interest earned).

Once you have sorted the above, you will know what is the amount in hand to make your decision, so lets dive into it.
You have a loan of 60 Lacs and you can manage the EMI from your salaries. Over the next 6-7 years, your salary will also see an increment of approx 7-8% annually, so I suggest you utilize this excess amount each year to prepay/topup your EMI payments. This will help reduce the loan burden over time. At the time of retirement, your loan outstanding can be paid with available options at that time.
You mentioned PPF as an option - I would suggest you do not utilize PPF amount towards this loan closure. The reason is PPF is a completely tax exempt asset and can be utilized well towards retirement income. Of course depends on how much you have accumulated in PPF.

So lets now consider paying the loan amount with the sale proceeds of the current flat. You have a loan today (assuming interest rate applicable is 8-8.5%), which you can manage and you are keen to continue it till retirement, so also recommend you do so. Keep the sale proceed amount available for investment and wealth creation as there are opportunities that can generate returns at a same rate (conservative options) and higher returns (with a slightly higher risk associated).

As you do not have any major liability which is outstanding or cannot be managed, and also you are investing 90k per month in Mutual funds, you can consider wealth creation options for the sale amount available.
PMS is an option but I feel its risks will out weigh the returns in the time frame you have, unless you have a known and trust-worthy option you want to consider.
As you are looking to retire early, at age 50, you should target to create a corpus that will sustain your retirement life (consider at least 30 years post retirement) and your child's education requirements.
Hence my recommendation would be to invest in Mutual Funds and continue with your PPF until retirement. A well constructed portfolio to create a retirement corpus and your child's education requirements would be required.

You can consult a Certified Financial Planner to help you with this plan. They can guide you with your Investments and Retirement planning and provide options to consider and provide advise on risk management (Insurance requirements).

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi BK,

The queries you have raised are simple but the the solutions to them can be many. I will cover the important ones - your main objectives of regular monthly income and also have a corpus that you can leave behind.

So before my response I will make a few assumptions along with your inputs
1. You want to have 3 Lakh per month income to be adjusted by inflation each year.
2. You expect to receive above income for the next 30 years.
3. Return on the corpus invested will be an average of 10% pa.
4. Corpus to last beyond 30 years for your children.
5. No other dependencies to be serviced through your corpus.

Response a) Yes it is very much possible.

Response b) 3 lakh per month has to take into account your lifestyle expenses. It may seem too high for someone or too low for another, so its more relevant for you to measure it against your own expenses today. Do note that with time, and also as you indicated you want to take it easy, this number if its valid today may change once you take it easy.

Response c)
One of the simple solution to achieve your goals/objectives can be to split your 10 crore corpus into 2 amounts and invest them separately.
1. Invest 5.5 crore in Mutual fund schemes - you can further split this into 2~3 schemes for diversification and risk management. Consider between Conservative hybrid, Balanced advantage and Aggressive hybrid funds which can provide an annual average return of 10% (consolidated).
After a year of staying invested, start a SWP (systematic withdrawal plan) from these MF schemes to withdraw 3 lakhs per month and there after increase this by 5% every year.
This corpus will last you between 25 to 30 years.
2. Invest the remaining 4.5 crore separately in Mutual fund schemes - again this can be put into a portfolio of different schemes. This needs to be well balanced for investment for the next 30 years. This is where the long time duration of investment can permit you to take a bit of risk and generate good wealth.
At an average of 10% to 12% returns on the portfolio, expect the portfolio value to be between 78 crore and 125 crore after 30 years.

Response d) Projections provided above with assumed rate of returns.

Please note in the above, tax implications have not been taken into account. Also some important and crucial aspects need to be considered - health insurance being the primary one. You should get yourself a good health cover for the remainder of your life, if you have one, check if it needs to be enhanced or if its sufficient.
Hence I would recommend, you to hire/consult a Certified Financial Planner who can help you build your portfolio with recommended products and schemes that will meet your objectives. A CFP can provide a customized plan to achieve your goals and will also provide you alternatives/options and highlight the pros/cons for each.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Sandeep,

You have mentioned a total of 8 MF schemes for your investment of 28000 per month.
As details regarding your goal and requirement is not available, it is difficult to judge the overall portfolio from that point of view.
The schemes mentioned though are different names but will have a lot of overlap especially when you consider large cap stocks in their portfolio - HDFC Large & Mid / HDFC Large / HFDC Focused 30 and even the 3 Infra funds.

I believe the idea was to diversify your portfolio thru multiple schemes and if so, that is not really achieved.

Assuming you want to invest for over 10 year period, I suggest you keep your portfolio relatively simple with 4-5 schemes - 1 large cap (6000 in HDFC Large is ok), 1 Mid cap (6000 in HDFC Mid-cap or Motilal Oswal Midcap), 1 Small Cap (6000 in Nippon Small cap is ok) and 1 Infra (as you have shown inclination to Infra, 4000 in ICICI Pru Infra is ok) and add 1 Flexicap (6000 in Parag Parikh Flexicap which also has some overseas exposure). This will provide good diversification and less overlap.

This will provide good diversification and asset allocation across market caps.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Karunakar,

You have an House property (independent house) valued at 1.6Cr which you intend to sell and use the amount to purchase another House property (flat) with value of 1.4Cr.
You have raise multiple queries and before responding to them, I will try to explain the capital gains on house property.
Capital Gains = Sale value - cost of acquisition - cost of improvement - expenses incurred for sale (e.g. brokerage).
So first calculate the Capital gains on selling the property, as you mentioned you are selling it for 1.6Cr, so reduce it by the acquisition cost, etc.
Once you have the Capital gains amount, that is the amount you need to re-invest in another property to save tax on it, in your case the Flat (value more than the CG) can be purchase within the next 2 years and no tax will be payable.
So lets assume out of 1.6 Cr, you have CG of 1Cr, then 1Cr reinvested in another property i.e. for your flat cost of 1.4Cr, you will have no tax payable.
So its not the full value of sale, its only on the Capital gains that you need to worry for paying taxes.
The remaining amount of 60lakhs in above example can be utilized as per your requirement.
Responses
1. & 2. You can use any amount above the capital gains for any purpose you see fit - like parking, registration, loan or any other form of investment.
3. If the sale will conclude in April 2025, and your payment of the capital gains towards new flat will be April 2026, then you need to invest the capital gains amount as per below -
- if you are sure of purchase of flat, then within 6 months of sale date invest the amount in "Capital Gains Account Scheme CGAS)" in authorized banks. Amount will be kept in a special FD for 2 years and you can withdraw anytime to pay for your new property.

Within 6 months from sale of property or before tax filing for FY of sale date, i.e. FY25-26 filing date 31 July 2026, whichever is earlier, you need to make a decision.
If you are not planning to purchase another house property, then reinvest in specific long term capital gain bonds from NHAI, REC, some others, these bonds have lock-in of 5 years
If you decide to purchase another property, deposit CG in CGAS as mentioned above.

Interest earned on these deposits in taxable (under head of Other income).

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: HI Jitu,

In summary, you have 15 lakhs loans at 1% per day interest (= 365% per annum). No options to borrow from any other organized sources like Bank/NBFC. So monthly Interest is 4.5 lakhs.
Monthly Income is 2 lakhs.

This is called a Debt Trap, where your income is less than your outflow (debt), so you are in a negative balance always and keep borrowing to fill the gap. No point in going into the history of the situation but I hope this has been a big life lesson for you.

Borrowing against you Pension policy can be considered but depends on the company and note that this will be at a high interest rate.
Borrowing from PF funds is only under certain situations (e.g. illness, education, marriage) and so even that is ruled out.
I assume you have already considered all/any asset you may own to repay.

The solution cannot be a very simple one. But I can recommend a couple of options which you can see if they help. You plan should simple -
1. Find a source of funds to repay your current loans
2. Stay with bare minimum requirement for next few years and repay maximum amount towards new loan
3. Do not take any new loans and stay on track for next few years, no matter what.

With a salary of 2 Lakhs, you should take a hard look at your living expenses and cut out all except the basic necessities. At least on paper come up with a number that you can discuss with prospective lenders mentioned below. Give them confidence of your ability to pay back every month with a realistic number e.g. over 1 lakh per month. Make this as high as you can make it. Make compromises everywhere possible and evaluate each expense to see what you can eliminate for the next couple of years, except food and absolutely basic needs, compromise on everything else. And ensure you make this work no matter what. You will have to be strong willed to achieve this and make it work.

Check with any close friends/family members/relatives who will trust you and provide you with some loan and provide you with time to repay. Offer to pay them interest which is higher than FD but reasonable for you and you can go as high as 20% per annum. At 20% you can pay back 55~60K per month for 3 years and payback the loan with interest.

Assuming you have a bank account for direct salary deposit, approach the bank and explain your situation truthfully to them and request an overdraft/loan and offer them to recover an agreed amount at an agreed interest rate from your account directly as soon as your salary is deposited. Again the interest rate will be high but if this works, you will be on your way to recovery. Even if they offer an interest rate of 30%~40% per annum and recover in 3 years, your EMI will be around 62K~70K per month.

Approach your employer and discuss if a loan can be provided to you at a reasonable rate of interest and recovered from your salary each month. If you have been employed with them for over a year or longer, and if they consider to extend a loan this may be the best solution you can get. You can offer to sign a contract for this (stay with employer for a period or until loan is paid up).

Is there any other source of funds you can approach with a similar proposal then do so, as long as you can get a chance to payoff your current set of loans and have a manageable EMI amount to pay back over the next few years, just take the best option and keep every desire aside and stay focused on getting back on track.

Please note that borrowing from an alternate source is not going to work if you take a loan and relax after that. You have already impacted your CIBIL score which makes lenders stay away. Now your top priority will be to find a source of funds at reasonably high interest rate between 20% to 40% resulting in an EMI of 55K to 70K for 3 years, and ensure you do not default the payments and clear this ASAP. If you can pay higher amount each month, then do that and get out of these loans as quickly as possible.

With honesty and sincerity if you continue to stay on track, you can eventually start coming back to normal life where you can plan your expenses and save and invest too. But do remember to live within your means and save as much as possible. Over time build back your CIBIL score for future requirements.

Hope this is helpful in some way.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Niranjan,

As the name suggests, these funds allocate funds across asset classes, Equity, Debt and others (Treasury bonds, InvITs etc).

ICICI Prudential Multi-Asset Fund is the largest fund by AUM in this category. It also has a a more stable returns history and inexpensive primarily due to low turnover ratio.
Quant Multi Asset Fund is relatively quite small but a challenging contender (if last 1 year returns are not considered). Its expensive as its Turnover ratio is higher.

If you have high risk profile then you can consider the Quant fund, otherwise go for ICICI fund.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi,

Welcome back to India and Congratulations on taking this big decision to move back to India.

Before I start my response to your queries, just want you to know we share a couple of things in common. I was abroad for a considerable time and returned back to India and I was also in the IT field at that time, before I moved ship to Personal Finance and Financial Planning. So I can relate to some of your concerns, queries and thought process in that regard.

This may be a bit long but hopefully its helpful.
Your current Financial summary -
Cash/Liquid funds - INR 4 Crores
PPF equivalent - INR 70 Lakhs available at age 65
Inherited properties - valued at INR 30 crores no plan to liquidate as of now
Salary/Income - INR 1.3 lakhs per month in hand

As a few critical data points are not mentioned but with few indicators in queries, I will make some assumptions for the same - Age 37 years, Location for housing/work - Metro/2nd tier city.

Lets get a couple of things kept aside for this discussion -
PPF equivalent - INR 70 lakhs > for retirement can grow to an amount between INR 2 Crores (@4% returns) to INR 4.5 Crores (@7% returns), will cover this again when I mention Retirement below.
Inherited Properties - as there is no plan for liquidation, excluding this completely.

Decisions to be made -
1. Investment Options
2. Housing Buy/Rent
3. Financial freedom/independence

Lets go through each of these and I will add more for your consideration as they will have a weightage on all future decisions.

1. Investment Options
A> Commercial real estate with investment on INR 4 Crores and return of INR 1.5 lakhs per month
Pros -
Regular month income
Commercial Real Estate asset

Cons -
Return on Investment is 4.5% before reducing charges for maintenance, may be below 4% net in hand
Rental Income is taxable (added to other incomes and taxed as per slab rate) expect highest tax rate of 30% as total income will exceed INR 30 lakhs (Salary + rent)
All available funds will be deployed

Note - Commercial real estate appreciation is primarily based on location. Capital gains on Commercial real estate attract tax at 20% as of now.

B> Lets consider an alternative approach assuming investment is for a long term which is usually for real estate assets e.g. 20 years
Invest INR 4 Crores in Mutual funds.
A well diversified portfolio can generate 12% returns over the long term. The Corpus after 20 years will be over INR 38 Crores.

But considering your requirement for a monthly income from this investment, lets do another approach. Split your Investment.
Invest INR 2 Crores in a well diversified Mutual Funds portfolio expecting a 12% return - Corpus at the end of 20 years = INR 19+ crores
For regular income, Invest INR 2 Crores in Balanced Advantage mutual funds and considering a modest return of 10% (last 10 years data will show higher returns). Keep investment for 1 year before withdrawing to attract Long term Capital Gains tax (tax efficient approach). After 1 year you can receive INR 1.5 lakhs per month (increasing at 5% annually) for the next 20 years.

Pros -
Investment generates higher rate of return, Corpus growing/compounding at 12% return
Regular month income
Investment returns are more tax efficient
Flexibility to deploy all or partial funds towards building a corpus
Corpus can be liquidated in future much faster and easily than Real estate

Cons -
No real estate asset

Recommendation - Approach B is recommended as this will provide liquidity and appreciation towards wealth creation. This will also provide availability of funds for a new venture as and when required if that becomes a viable option in the future.

2. Housing Buy/Rent
If you plan to stay in India for long and settle down (not clearly indicated considering career options), you can consider buying a house property. But if the work location is not what you believe to be the place where you would like to settle down, then start with a Rental option and over time reconsider location for buying option.

Buying Property
Pros -
Asset is generated
Stability of residence if/when self occupied
Some amount of tax deductions/exemptions can be claimed if Loan is taken

Cons -
A large amount of funds required/blocked for full payment / partial payment (with loan)
EMI on Loan reduces income/funds in hand
EMI is much higher than rent
Locked to the property, change will be expensive

Renting Property
Pros -
Capital is not deployed immediately
Rent can be claimed for tax benefits
Provide opportunity to consider long term housing decision
Difference between EMI and Rent can be Invested to generate a good corpus
Flexibility to move jobs across locations

Cons
No Asset is generated
Rent is an expense
No sense of ownership in the house you stay

So in summary, the decision is more individual and how you perceive the house property as an asset. For flexibility to settle down in your career in India I can recommend to start with a Rental option and I am sure in a few years you will know where and what to buy (if at all) towards your house property. Also Location is again critical towards budget and type of housing to consider.

3. Financial freedom/independence
This is probably more important than we realize. With time if we accumulate debt through loans, and expenses, this is one goal which takes a back seat.
Assuming you have worked on the above 2 goals and finalized your options/approach for them, I would strongly recommend you plan your monthly expenses and cash in/outflows to understand what amount you have in hand that can be considered towards savings for the future.
With a long road ahead in your work life (another 20+ years), Asset allocation needs to be considered when planning to deploy your savings. Equity based investment can provide health returns for investments that are for more than 7 years and a well diversified Mutual Fund portfolio can achieve this. For requirements within 5-7 years do consider debt products to park your money and earn modest returns giving priority to liquidity and safety.

Few very important points are not mentioned but I would like to highlight and you should start considering them immediately.

1. Life Insurance - Buy a Term Life plan for yourself and once your wife starts earning, for her too. The amount needs to be calculated and my final recommendation (last para below) will cover this. Start with INR 50 lakhs and keep adding based on the Financial plan.

2. Health Insurance - Buy a good coverage for Family (even though you may have some with your employer). Recommend to go upto 1 Crore (and there are multiple options Base cover + Top-up covers for this).

3. Emergency Funds - Keep aside at least 6-9 months of expenses as emergency funds in a safe and liquid investment e.g. Fixed Deposits.

4. Your child's education - Within another 1.5 years schooling (pre-primary) will start and the education expenses are not as easily managed now. They will require a plan as they escalate very quickly as the child moves towards higher levels of education. Education inflation is in the range of 12% ~ 15% on average. So depending on what your decide for the school/education institute, this becomes a considerable amount and if unplanned may erode your corpus very quickly.

5. Though you have mentioned Retirement briefly, the PPF-equivalent amount will not be sufficient for retirement. Retirement typically at 60 years of age demands a corpus to cover the next 20-25 years of lifespan. Considering inflation may be just getting covered by the modest returns on your INR 70 lakhs fund, you are definitely short on the retirement side.

As you can see we have not considered the inherited property in this discussion, it can have a considerable impact towards your over financial plan.

Though I have provided some responses to your individual queries, this will still need a more comprehensive Financial Planning.
Hence I strongly recommend you approach a Certified Financial Planner and go through the process to arrive at a Financial plan which will be in sync with your Life plan. A CFP will take into account all aspects of your personal preferences and guide you towards various options and alternatives you can consider. The comprehensive Financial plan will include/cover all aspects of Investment management, Risk management (life and health Insurance), Retirement planning and Tax management - a tax efficient approach towards your requirements. Please remember just as Life is ever changing and evolving for each of us, so will your Financial plan require the changes and evolution to stay relevant for you, and this is where a CFP will add the most value when you have a long association. A CFP will plan and re-plan your goals and its requirements over the years and provide options and recommend the amounts and product categories to consider for each of them.

Best wishes for you to settle down and hope the above has provided a start towards it.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Deepa,

Retirement is usually defined with few parameters for calculation of corpus - Post retirement life expectancy duration in years, monthly requirement and corpus investment risk capability.
You have mentioned monthly requirement of INR 200000.
We can assume the below
1. Post retirement life expectancy is 20 years (if more then required corpus will be more)
2. Corpus investment will be in less risk like FDs giving us 6% rate of return (if rate of return is higher then required corpus will be less)

Considering this, the corpus requirement will be INR 2.81 Crores. If any of the assumed parameters are changed, the the corpus will also change accordingly. This does not include the tax implications on the income you generate each year.

I recommend you approach and consult a Certified Financial Planner who can guide you towards your Retirement plan which will take into account your profile and various parameters regarding your life style and demographics to prepare it. The biggest advantage will be it will be a comprehensive plan covering all aspects and make you think and provide many details which you may/may not be able link to retirement but is essential part of it.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Debasis,

Retirement at 45 is achievable. You have another 12 years before your target of retirement at 45 age and assuming you will stay committed to your current investment plan.
As there is still a long life ahead I hope you will think about what to do post retirement.

Some information is missing so I will make some assumptions and provide my updates and views on your current portfolio
Mutual Funds - 22000 per month investment and assuming average return of 12% will help accumulate nearly 1 Cr
PPF - contributing 1.5 lakhs yearly at 7 % will help accumulate nearly 60 lakhs
ULIP - exact month is not available so assuming 1 lakh for the next 12 years at 9% return (it has a lot of expenses in the initial 5 years) will help accumulate nearly 22 lakhs (see note below for ULIP)
NPS - 50000 per year at 10% returns (depends on asset allocation) will accumulate nearly 25 lakhs

Note on ULIP - ULIPs are life insurance + investment product. They do not give enough Life insurance nor do they give comparable returns like Mutual Funds. They will have high expenses in the initial 5-7 years (typical lock-in period) and its market linked (like mutual funds). The Insurance is not really enough and hence advice is to take separate Life Insurance - Term Life insurance for a good amount which is quite cheap and invest remaining amount into Mutual Funds/NPS - this will give best possible Life insurance cover and investment returns. So if you have completed your lock-in period (check policy document), I recommend close the ULIP and replan as mentioned.
If this ULIP was part of tax plan under 80C, then re-invest in ELSS Mutual funds or NPS for same benefit under 80C, and even the Term plan premium will be considered under 80C - so effectively same amount under 80C but better cover and investments.

The total corpus you will accumulate is approximately 2 Crores and this can definitely help you generate income of 1 lakh per month.
There are many aspects that are not considered in this scenario, do keep the below in mind.
The amount of Health insurance you have, you should have cover of 1 crore for self and family.
The Life insurance you require needs to be assessed/calculated. This depends on your net-worth and financial responsibilities towards your family/dependents. Once this is known, plan to get a Term Plan for the required amount ASAP.
Life expenses need to be calculated considering the inflation applicable for your lifestyle. Will 1 lakh be enough to cover your expenses after 12 years when you retire. Also Inflation will keep increasing and thus initial 1 lakh will soon become much more each year.

I strongly recommend you connect with a Certified Financial Planner for personalized guidance and prepare a plan that will take into consideration all above points and much more to provide you a comprehensive Financial Plan. Benefits will include a more tax efficient plan which will consider your requirements and ensure retirement goals are achieved and if there is a shortfall - what alternatives you need to consider.

Hope this is helpful and all the best for the future.

Regards
Janak Patel
Certified Financial Planner.

Ans: Hi,

There are many things to consider for an early retirement (around age 50 as you mentioned), first is to start thinking about it in a more realistic manner. An early retirement has different meaning to each individual - opportunities to relax and pursue your passion and interests and live life on your own terms. So do think about how to keep yourself occupied once you retire.

At 50 years of age, it a still a long life ahead. Considering the investments and assets mentioned in your query, it may seem more than adequate, but some critical information are missing in it for a full assessment. What are your expenses, liabilities and plans/goals in life and also who are your dependents and what are your financial responsibilities. These need to be considered before concluding if you are well placed for the long retirement ahead.

There are many aspects that will need planning and expert guidance -
• Expense management - Regular income to cover your monthly expenses and ad-hoc/annual expenses
• Investment management - Optimize investment portfolio and plan on reinvesting maturing benefits of LIC that are aligned to your requirements
• Tax optimization of investments and reimbursements - Tax is applicable on gains from most sources of income except a few and in your case LIC (depending on the policy type) and PPF balance are tax exempt
• Risk management - besides health insurance (increase it to 1 Cr), do you need any other type of insurance, that needs to be assessed/calculated
• Succession and inheritance planning - passing of your assets and investments to family, friends or anyone you wish

I recommend you to connect with a good advisor / Certified Financial Planner who will study all aspects of your life and provide guidance and feedback and help you plan the retirement.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Rajan,

Good to know you planned investment for your son's education. There a few things to keep in mind when planning investment which are market linked.
The time horizon is very important to reap the benefit from the market linked investments. In your case your son is going to join college this year and than means you will need this money for his fees. Along with this the fund selection based on the risk profile.
There have been 2 things that seem to be of concern at this time - 1. Markets are bearish currently and 2. Not enough time to stay invested. Also the funds you have selected are of very high risk category and hence you may see higher impact in the fund value compare to the market.
If you still see a return of 19% as mentioned, I would recommend you to withdraw and for whatever time you have the money before utilizing it, do consider a low risk option of investment like Bank FDs.
This will provide safety and liquidity of your money when required.
All the best to your son for his future.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi,

Congratulations on starting the Investment journey for your young son. You have taken the best step forward for his future.
You have selected some of the most recommended funds in each category and constructed a good portfolio of mutual funds for your objective. Each fund has a different investment style and they are all well diversified across market caps and your addition to the small portion of Debt is also a good option in the portfolio (assume ICICI Prudential Equity and Debt fund is 10% allocation).
My recommendation is that you review your portfolio every year and do not be impulsive in any changes - unless funds are seen to be underperformers when compared to the market, their benchmarks and their peers for at least 2 years. As each fund and investment style will undergo volatile performance, the funds will reflect this and over the long term this will get levelled. Also I assume this will be for requirements in the future which is at least 8-10 years away.
So do connect with a good advisor / Certified Financial Planner who can guide you through this review process and transparently provide feedback and help you plan the redemption in the future.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi,
Investment and Mutual funds selection is based on may factors, and one of most important factor is Time (horizon). Time is a major factor that determines the amount of risk and the path that can be undertaken to achieve an expected goal/return.
You have mentioned 3 years for your goal and this is a very short period to take on higher risk.
Your goal of 1 Cr with existing investment on 25 L and an SIP of 1.2 L in Mutual Funds can be achieved with an annual consistent return of 18% - this is a challenging expectation from MFs.
My recommendation is to continue your investments and be realistic in your expectations. If this goal is flexible in terms of time horizon then reconsider and plan accordingly. It the time horizon is not flexible then, I suggest you plan ahead and look at less risky investment options like fixed income (not market linked) to safe guard the capital invested. Market linked investments should be considered with a time horizon of at least 5-7 years (the longer the better), and please do not consider the last few years returns and expect similar returns in the next few years.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Satish,

Retirement Corpus needs safety and liquidity along with growth as it has to last a long time.

As your complete requirement is not very clear I will mention some numbers to give you an idea and you can plan based on your actual requirement.
Lets say your monthly expense requirement in 50000 per month i.e. 6 lacs per year. This is an amount for the first year, but with Inflation, it will increase each year.
Depending on your risk profile, the Retirement Corpus needs to be invested after prioritizing the 3 parameters - safety, liquidity and growth.

If you have a low risk profile then invest in safe investments - either Debt funds or Fixed deposits - Risk is Inflation will eventually start reducing your corpus.

If you can handle moderate risk then divide the corpus e.g. Keep 75% in growth (with some safety) funds like the Balanced Advantage/Hybrid funds and rest 25% in safe investment such as Debt funds or Fixed deposits from which you can withdraw for monthly expenses.
In your case 25 lacs in safe investment will help manage approximately 4 years of expenses.
The remaining 75 lacs invested in Balanced Advantage funds will continue to provide growth. So if we assume it grows at 8% every year, plan to withdraw 5~8% of your fund and move it into safe investments.

This way you can plan to have approximately 4 years of expenses in safe investments and give the remaining corpus an opportunity to grow to management and stay ahead of inflation.

The above is just a simple view of looking at the Retirement corpus and managing your expenses, but beyond this there are many other aspects that needs to be considered also, such as your health related requirements, your lifestyle requirements, additional goals/responsibilities towards family and life expectancy as you plan for retirement. This will provide you a more accurate and realistic insight into the retirement plan.

Advice you to approach a Certified Financial Planner to provide a comprehensive and customized guidance/plan to you.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: Hi,

As there are many things to consider for an early retirement, one of the first is to start thinking about it in a more realistic manner. An early retirement is not necessarily stop working life, but think of it as a more comfortable schedule that provides you opportunities to relax and pursue your passion and interests and live life on your own terms. You may or may not undertake an activity which can be monetized, meaning which provides you some sort of income - not necessarily to cover your living expenses in whole/part. So do give it some thought of how you intend to keep yourself occupied once you retire from your "current schedule". Will you generate any source of income or will you incur/require more expense.

At current age of 52, an early retirement even if we consider at 55 years of age, it a still a long life ahead. I will make a lot of assumptions in my response as these are not known from your query - such as life expectancy of another 30 years, average return of 8% on all investments for future etc. Are the 2 real estate properties earning any kind of rent that can be considered as income.
There are too many variables that go into the calculations for retirement which are specific to each individual and their circle of life.

Generic solution - You have a currently accumulated investments valued at INR 2.65 Cr (all investments less loan).

Current monthly expenses is INR 1 Lac, over which inflation needs to be applied each year (depends on lifestyle and composition of items of expenses).

So if your cumulative investments appreciate at average 8% annually, and your monthly expense increases at 6% annual inflation, your current accumulated investments are just about enough to manage expenses for next 30yrs (excluding tax implications - refer below).

Points to consider -
1. Inflation in real world is more than 6% (depends on the individual)
2. Liquidation of investments e.g. Real estate attract expenses/fees and tax on capital gains as it will be lumpsum
3. PF post retirement will earn interest only for 3 years, so you need to plan to re-invest the amount
4. Interest income on FD attracts tax at slab rate
5. Withdrawal of amount for monthly expense from your investments will attract tax on capital gains (MF and Equity)

I strongly recommend you connect with a Certified Financial Planner for personalized guidance and prepare a plan that will take into consideration your risk profile and overall investment management towards the retirement. Benefits will include a more tax efficient plan which will consider your requirements and ensure retirement goals are achieved and if there is a shortfall - what alternatives you need to consider.

Hope this is helpful and all the best for the future.

Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Saket,

Your portfolio is a mix of investments across MFs, PMS and PPF.
Assuming PMS is all equity, the asset allocation reflects approximately an 80:20 ratio in Equity:Debt respectively, which seems fine.
As your objectives or goals are not available, it would be difficult to indicate if they suit your profile.

Most of the MF schemes mentioned are fine with a good track record. The exception is the Business Cycle scheme - this is a new scheme and being sectoral it will attract very high risk, its approximately 10% of your portfolio value so continue if you understand the risk.
Alternately you can consider a Flexi-cap or Multi-cap MF scheme that are well diversified and for a 7+ years of time horizon.

PMS services - if your experience with the PMS services are good and they meet your expectations for returns, then do continue.

PPF - plan to utilize it as a tax efficient instrument to withdraw funds at the time of retirement. Continue to contribute max possible and complete lock-in period of 15 years and keep extending the account with contributions. Over the next 10-15 years you can accumulate a good corpus which will be completely tax free for withdrawal.

An observation/suggestion as its not indicated - As you are freelancer, suggest emergency funds - please plan to have at least 6-9 months expenses in an investment which has high liquidity and safety e.g. FDs. In extreme eventualities like the pandemic or a personal crisis, this fund can support the immediate needs.

As you are going to be moving towards your retirement in a decade or so, I recommend you contact a Certified Financial Planner who can add value to your portfolio and provide a personalized evaluation and guidance taking into consideration your family profile, goals and requirement of the future while assessing risk and tax efficiency.

Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Neeta / Raghav,

At the high level the below should help you.

1. Cost of acquisition can include the purchase price and the cost of improvement, so the upkeep expenses to maintain the property cannot be consider, but if you made any form of addition/alterations to the property then you can include it.
The interest paid on loan is eligible for tax benefits, it cannot be included in the cost of acquisition.

2. Old Rule - using the CII for calculations indicate Capital gains of Rs130 lacs, the capital gains tax (20% on difference after indexation) works out to be approximately Rs26 lacs. Note exact dates of purchase/sale will determine the CII values to be used, assumed FY2002-3 and FY2024-25 for now.
New Rule (2024 budget) - Capital gains = difference of sale and cost price i.e. Rs179 lacs, tax of 12.5% on it is approximately Rs22 lacs.

Note - you can add/reduce the cost/sale price with expense incurred in transacting the property e.g. brokerage.

Options to save tax on the Capital gains amount
1. Reinvest in another residential property within 1 year prior and 2 years after sale date or construct within 3 years after sale date.
2. Invest in NHAI bonds - has lock-in period and the interest earned is taxable.

Please contact a CFP or a Tax consultant for further guidance.

Regards
Janak Patel
Certified Financial Planner.

Ans: Same query replied to Neeraj, please refer the same.

Ans: Hi Neeraj,

Mutual Funds are a good option for investment. The investment horizon/timeline is very important when you consider equity mutual funds, they need to be invested for the long period (7+ years).

You have only recently started in June 2024, so keeping patience with your investment is important. You can track the progress of your investment but don't get influenced by day to day fluctuation in its NAV. Decisions should be taken based on many factors but do consider 1-2 years duration to see if fund performance is steady, improving or below par compared to your expectation and its peers and the market.

Now coming to the funds you have provided - Quant Large and Midcap and Quant Flexicap are good funds and I think you should be patient. Note - both are actively managed funds and you can expected to see fluctuations in the short term. Stay invested in these 2 funds as they are well diversified and long term prospects look good.
Quant Infrastructure fund is a Sectoral fund and the fluctuations will be high. If your risk profile is very high, then you can continue. There will be a period of time when the sector loses favor in the market and thus the returns will be impacted and during good times it will provide good returns.
Alternately if you decide to exit then include a fund from another fund house which is well diversified and aligns to your risk profile. Some good options to consider - an Index fund based on Nifty 500 (passive) or a multicap fund (active) - to get a a well diversified exposure to Large-Mid-Small cap.
Note- Redemption at this time may attract exit load apart from tax implications for short term.

Regards
Janak Patel
Certified Financial Planner.

Ans: Hi,

There are many Mutual Fund schemes that are doing well depending on what factors you consider to evaluate them for.
So rather than look for the best (which can change over time and other conditions/factors), I recommend you look for consistency in a MF scheme.

Consistency will help remove the bias and fear of being/not being the best and provide a more solid approach towards investing and staying invested in the MF scheme.

Also when deciding on the MF scheme, do consider the investment goal, time duration of the investment and risk you are willing to associate to your investment. These can help you narrow down on the MF category/scheme.

Regards
Janak Patel
Certified Financial Planner.

Ans: Hi,

Glad to hear you want to invest in Mutual Funds. There are many Mutual Fund schemes and depending in various factors you need to decide which is the correct scheme suitable for you. For this we need to know the goal for which you are investing which will provide more insight of the duration and amount of risk that can be associated.
You mentioned Risk: Aggressive - but the duration of investment is equally if not more important in decision making.

So if I were to assume you have a timeline of 7-10 years for your investment, you can consider Equity based Schemes, if its 4-7 years then a hybrid (Equity+Debt) scheme may be suitable and if its less than 4 years you can consider Debt category.

Considering you aggressive risk profile and assuming you are going to consider investments for more than 7 years, I recommend you invest in a Multicap scheme (70%) and a Large cap scheme (30%). Also ensure you invest your 10 lakhs amount spread across 6-10 months instead of a single investment.

Regards
Janak Patel
Certified Financial Planner.

Ans: Hi Vivek,

Loan is provided at an specified interest rate and for a specified tenure (years/months) and these depend on the type of Loan you have taken e.g. Personal Loan, Home Loan etc. This determines the monthly installment that is required to be paid by you for the tenure agreed.
As you have mentioned Principal amount is 65K and now the Lender is asking to pay 1 Lac - this must include the interest due on the principal amount.
As you have not mentioned type of loan, the interest rate and the duration of this loan, its difficult to understand the terms of the loan and whether you have defaulted on it. Loan payments usually take into account the income and repayment capacity of individual.
Suggest you approach the Lender and discuss the terms and agree on a plan for repayment which is acceptable for both.
Please understand that if you default on a loan payment, the credit score gets impacted.

Regards
Janak Patel
Certified Financial Planner.