Sir, I'm 43 years old and have 10k sip in parag flexi cap, canara large cap, quant active and axis mid cap.5k sip in motilal midcap, ICICI mid and large cap. Current mutual fund corpus 16 lakhs and have another corpus of 1.5 cr which is mostly in debt instruments like FD. I have a 14 year old son and a passive income of 30k which I expect to continue for next 10 years. My monthly expenses is around 70k. I would like to understand the corpus required for my retirement if I want to retire now and also corpus for my son's education. Expecting your valuable suggestion and advice. I don't expect expenses to grow higher and have a decent medical insurance

Ans: It's great to see you've built a substantial corpus and are planning for your future financial needs. Let's analyze your situation and determine the steps needed to achieve your goals.

Current Financial Status
Corpus Allocation
Your corpus of ?3.4 crore, with a significant portion in equities, FDs, and PF, reflects a diversified investment approach.

Additional Income
The rental income of ?72,000 per annum provides an additional source of cash flow, contributing to your overall financial stability.

Future Financial Goals
Education Expenses
You have identified the need for ?50 lakh for your daughter's education in 14 years and have committed to investing ?2 lakh per month in SIPs to achieve this goal.

Retirement Planning
To secure a regular monthly income of ?2 lakh post-retirement, we need to calculate the additional retirement corpus required.

Retirement Corpus Calculation
Desired Monthly Income
A monthly income of ?2 lakh translates to an annual income of ?24 lakh post-retirement.

Withdrawal Rate
Assuming a conservative withdrawal rate of 5-6% from the retirement corpus, we can estimate the required corpus as follows:

?24,00,000 / 0.05 = ?4.8 crore
?24,00,000 / 0.06 = ?4 crore

Gap Analysis
Current Retirement Corpus
Your current corpus of ?3.4 crore is significant but falls short of the required retirement corpus.

Additional Savings
To bridge the gap, you may consider increasing your monthly SIP contributions or exploring other investment avenues that offer potential for higher returns.

Asset Allocation
Review your asset allocation to ensure it aligns with your risk tolerance and investment goals, especially considering the need for regular income post-retirement.

Conclusion
While you have made commendable progress towards your financial goals, there is a need to augment your retirement corpus to secure a regular monthly income of ?2 lakh post-retirement. By reassessing your investment strategy, increasing your savings rate, and exploring suitable investment options, you can work towards achieving financial independence and ensuring a comfortable retirement.

If you require further assistance or personalized advice, feel free to reach out. I'm here to support you in navigating your financial journey and achieving your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

You may invest 50 L into an Arbitrage type mutual fund (low risk) earmarked for your son's higher education.

For 1 Cr you may buy an immediate annuity from a life insurance company. Considering annuity rate of 6% you may expect to receive monthly payout of around 50 K.

So your total monthly income will be 50 K from annuity + 30 K passive income= 80 K pm.

After accounting for your monthly expenses of 60 K you have a surplus of 20 K which you may use to initiate a monthly sip into a pure equity mutual fund.

After 10 years this sip may grow into a corpus of around 50 L to top-up your retirement corpus.

Happy Investing;

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

Ans: Hello;

You may keep 50 L in a Arbitrage type mutual fund (low risk; easy redemption) for your kid's education.

You may buy immediate annuity for the balance corpus of 1.2 Cr from a life insurance company.

Assuming 6% annuity rate, you may expect monthly income of around 60 K.

So your passive income of of 30 K+ 60 K annuity income= 90 K is sufficient to cover your regular expenses of 70 K.

Happy Investing!!

Ans: You are 43 years old with an SIP allocation in both large-cap and mid-cap funds. You have a total mutual fund corpus of Rs 16 lakhs and an additional Rs 1.5 lakh in debt instruments. Your passive income is Rs 30k per month and expenses are Rs 70k per month.

Passive Income and Expenses
Your passive income covers part of your monthly expenses. This is good but not sufficient for your monthly needs. You might need to draw from your investments to cover the gap.

Retirement Corpus Calculation
Retiring now requires careful planning. To sustain your lifestyle, you need to account for 70k monthly expenses.

Let's assume:

Your retirement age is 60

Life expectancy is 85

Monthly expenses remain the same

You will need a significant corpus to cover 25 years of expenses post-retirement.

Educational Corpus for Your Son
Your son is 14 years old, and college expenses will kick in within the next 4-5 years. Assuming a conservative approach:

Consider the cost of education, including tuition and other expenses

Account for inflation

Investment Strategy
Continuing Current SIPs
Parag Flexi Cap

Canara Large Cap

Quant Active

Axis Mid Cap

Motilal Midcap

ICICI Mid and Large Cap

Potential Changes
Evaluate the performance of your current funds. If they are consistently underperforming, consider switching to better-performing funds. However, ensure these align with your risk profile.

Diversification
Balance your portfolio with a mix of large, mid, and small caps

Consider international exposure for broader diversification

Debt Instruments
With Rs 1.5 lakh in debt instruments, ensure they align with your risk tolerance. Debt instruments provide stability but lower returns.

Tax Efficiency
Be mindful of the new mutual fund capital gains tax rules:

LTCG above Rs 1.25 lakh is taxed at 12.5%

STCG is taxed at 20%

Regular Reviews
Regularly review and rebalance your portfolio. This keeps your investments aligned with your goals and market conditions.

Insurance
Ensure you have adequate health and life insurance. This protects your family's financial future.

Emergency Fund
Maintain an emergency fund equivalent to 6-12 months of expenses. This covers unforeseen situations.

Best Regards
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment