With 2 flats worth 1.75cr, an annual income of 12l and a health insurance, what should I do with my finances?

Ans: Hi Bhupesh, there is no ‘one size fits all’ concept with health insurance. Health insurance is based on preferences of the customer and then the premium quotes are generated based on those factors. You can use insurance broking websites to compare the offerings on the mentioned 5 factors and the premiums for various policies that will help you to compare their benefits and make an informed choice. Depending on your priorities, weigh out the factors and decide accordingly.

Since you have mentioned about your family, you can opt for Family Health Insurance policies with an appropriate sum insured to cover your entire family. Like I have mentioned before, premiums are unique to individuals depending on their preferences, the sum insured they deem suitable, the riders they choose, their medical history etc.

What you can do to ensure you buy the correct policy for yourself is to evaluate policies carefully, keeping in mind the 5 important parameters.

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Ans: I suggest you go ahead with the separate health policy for the new child as of now. Going further if you still find their service quality level poor you can decide about porting suitably.

Ans: Relying solely on rental income from older flats can be risky due to maintenance, vacancy, or location-related issues. Selling one or both flats and reinvesting the proceeds in mutual funds can provide better liquidity, diversification, and tax-efficient growth. Mutual funds with a balanced portfolio of equity and debt can generate steady SWP income, meeting your regular expenses while preserving capital.

For health coverage, consider a super top-up plan offering Rs 25 lakhs with a reasonable deductible, ensuring affordability and comprehensive protection against medical inflation. This ensures financial safety during unexpected health emergencies.

Best Regards,

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

Ans: Your financial position is strong, but careful planning is required before retirement. Your income sources and expenses must be balanced to ensure financial security. Below is a detailed assessment of your retirement readiness.

Understanding Your Financial Position
Assets and Investments
Provident Fund (PF) & Recurring Deposits (RD): Rs 1.4 crore

Public Provident Fund (PPF): Rs 44 lakh

Kisan Vikas Patra (KVP): Rs 113 lakh (will become Rs 226 lakh in 2031)

National Savings Certificate (NSC): Rs 48 lakh

Bank Balance: Rs 3 lakh

Cash in Hand: Rs 5 lakh

Mutual Funds: Rs 57 lakh

Systematic Investment Plan (SIP): Rs 1.14 crore

Life Insurance (LIC Policy): Rs 10 lakh

Medical Insurance: Rs 7.5 lakh

Shares: Rs 10 lakh

Current Income Sources
Monthly Rental Income: Rs 17,000

Monthly Dividend Income: Rs 85,000

Liabilities and Major Expenses
Housing Loan EMI: Rs 1.15 lakh per month (Ends in 2028)

Potential Rent from Owned House: Rs 55,000 per month (After Loan Closure)

Assessing Retirement Readiness
Income vs Expenses Before 2028
Current Fixed Income: Rs 1.02 lakh (Rent + Dividends)

Loan EMI: Rs 1.15 lakh

Deficit: Rs 13,000 per month

Action Plan: Until 2028, you may withdraw from FD or MF SWP to cover the shortfall.

Income vs Expenses After 2028
Post-Loan Monthly Rental Income: Rs 72,000 (Rs 55,000 + Rs 17,000)

Dividend Income: Rs 85,000 per month

Total Passive Income: Rs 1.57 lakh per month

Action Plan: After 2028, you can comfortably retire as passive income exceeds EMI burden.

Structuring Investments for Stable Retirement Income
Systematic Withdrawal Plan (SWP) for Regular Income
SWP helps generate tax-efficient monthly income.

Withdraw from debt or balanced funds for stability.

Ensure withdrawals are lower than growth rate to protect capital.

Fixed Deposits and NSC for Safe Returns
Keep a portion in short-term deposits for liquidity.

NSC and PPF grow tax-free; use them for future expenses.

Debt and Gilt Funds for Lower-Risk Returns
Keep money in debt funds for moderate risk and higher liquidity.

Gilt funds provide safer fixed returns.

Stocks and Mutual Funds for Growth
Retain some mutual funds for long-term wealth creation.

Actively managed funds perform better than passive index funds.

Keep some equity allocation for inflation protection.

Managing Liabilities and Taxes
Loan Closure Strategy
Consider prepaying a part of the housing loan using FDs or low-return assets.

Once EMI ends in 2028, rental income increases financial stability.

Tax Planning on Investments
Equity MF LTCG above Rs 1.25 lakh taxed at 12.5%.

Debt MF taxed as per income tax slab.

Plan withdrawals efficiently to reduce tax burden.

Final Insights
You can retire comfortably after 2028.

Till 2028, manage EMI burden using existing funds.

Use SWP, dividends, and rental income for stable cash flow.

Keep a mix of equity, debt, and fixed income for risk management.

Ensure proper tax planning for efficient withdrawals.

Let me know if you need a detailed action plan.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment