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Ramalingam

Ramalingam Kalirajan  |6266 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 11, 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
Asked by Anonymous - Apr 11, 2024Hindi
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I am 40 years old and having 2 daughters aged 8 and 4 yrs. I invest approx 50k through SIP in MF ( ICICI prudential retirement direct growth - 8k from 2 year, Axis small cap fund direct growth -10 K from 2 year , white oak capital pharma direct growth - 5K from 2 months and Tata ethical fund - 25 K from 2 years) plus have exposure to stocks with approx value of 15 L I want a corpus of 3 Cr by the time I am 55. What should I do to achieve it? What else should I do for post retirement expenses of around 2 lakh per month based on inflation costs?

Ans: To achieve your goal of a 3 Cr corpus by age 55, consider these steps:

Increase SIP contributions: Gradually increase your SIP amounts annually to capitalize on the power of compounding. Aim to maximize contributions while maintaining a diversified portfolio.

Review asset allocation: Regularly assess your asset allocation to ensure it aligns with your risk tolerance and financial goals. Consider shifting towards a more conservative allocation as you approach retirement age.

Explore additional investment avenues: Look beyond mutual funds and stocks to diversify your portfolio. Consider options like PPF, NPS, real estate, and fixed-income instruments to spread risk and enhance returns.

Monitor and adjust: Keep a close eye on your investments and make adjustments as needed based on market conditions, life changes, and financial goals.

For post-retirement expenses:

Estimate retirement expenses: Calculate your estimated monthly expenses in retirement, factoring in inflation and potential healthcare costs.

Create a retirement plan: Develop a comprehensive retirement plan that includes your desired lifestyle, retirement age, expected expenses, and income sources like pensions, annuities, and investments.

Build a retirement portfolio: Allocate your investments to generate regular income in retirement while preserving capital. Consider options like dividend-paying stocks, bonds, annuities, and rental income from real estate.

Seek professional advice: Consult a financial advisor to create a personalized retirement plan tailored to your needs and risk profile. They can help optimize your portfolio, minimize taxes, and ensure a comfortable retirement.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |6266 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 2024

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Dear Sir , I'm now at 53 years ; self employed person . So far managed to make a corpus of 50 L via MF ( 95% equity , 5% debt ) , holding a property of worth 40 L after repaying the loan at Kolkata . I do require a corpus of 2.5 cr after 8 years to maintain my retire life . Presently , I am able to invest much because of my income gone down and dont have spare fund to invest . Only , I am carrying 5000/- pm SIP in Mirae asset Large & mid cap & Axis small cap . I want to understand , how can reach the goal ? Please advice .
Ans: It's admirable how you've diligently built your financial foundation despite the challenges. Your proactive approach to planning is commendable. Considering your current situation, it's essential to reassess your strategy. Have you explored options to optimize your expenses and potentially increase your savings? Additionally, have you considered the impact of inflation on your target corpus?

A Certified Financial Planner can provide personalized guidance tailored to your aspirations and limitations. They can help you recalibrate your investment portfolio, ensuring a balanced approach that aligns with your risk tolerance and long-term goals. While your current SIPs are a step in the right direction, diversifying your investments further could enhance your potential returns.

Remember, financial planning is a journey, not a destination. Stay focused on your objectives, and with careful planning and guidance, you'll navigate through any challenges towards a secure and fulfilling retirement.

..Read more

Ramalingam

Ramalingam Kalirajan  |6266 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 26, 2024

Asked by Anonymous - Feb 20, 2024Hindi
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I m 49yrs, investing in SIP since 2019, started with Rs.10k/month, now Rs.20k/month. This month invested Rs.10lk in 4 equity linked MFs with 50% in liquid fund for 6months. Expecting Rs.43lks from PPF by 2031. How should I go further to have monthly income of Rs.2lk after 60yrs of age OR any other suggestion ylto have better corpus accumulation for retired life after 60yrs of age?
Ans: Thank you for sharing your financial journey and goals. Let’s create a plan to help you achieve a monthly income of Rs 2 lakhs after the age of 60 and accumulate a substantial retirement corpus.

1. Current Financial Situation and Goals
You are currently 49 years old and have been investing in SIPs since 2019. Your current SIP investment is Rs 20,000 per month. You recently invested Rs 10 lakhs in four equity-linked mutual funds, with 50% in a liquid fund for six months. You expect Rs 43 lakhs from your PPF by 2031.

Your primary goals are:

Achieving a monthly income of Rs 2 lakhs after 60.
Accumulating a substantial retirement corpus for a comfortable life post-retirement.
2. Analyzing Your Investments
SIP Investments
SIP investments are a great way to build a corpus over time. With Rs 20,000 per month, you are already on the right path. SIPs help in averaging out market volatility and building wealth over the long term.

Lump Sum Investment
You have invested Rs 10 lakhs in equity mutual funds, with half in a liquid fund. This strategy provides growth potential while ensuring liquidity for short-term needs.

PPF
Your PPF account is expected to yield Rs 43 lakhs by 2031. PPF is a safe investment with tax-free returns, which is excellent for long-term goals.

3. Creating a Retirement Corpus
Calculate the Required Corpus
To achieve a monthly income of Rs 2 lakhs post-retirement, you need to calculate the required retirement corpus. Assuming a life expectancy of 85 years and a withdrawal rate of 4%, you will need approximately Rs 6 crores at the age of 60.

Asset Allocation
Diversification across asset classes is crucial. Here’s a recommended asset allocation:

High-Risk Investments
Equity Mutual Funds: Continue investing in equity mutual funds for long-term growth. Increase your SIP amount annually by 10% to boost your corpus.
Medium-Risk Investments
Balanced Mutual Funds: These funds offer a mix of equity and debt, providing balanced growth with moderate risk.

Corporate Bonds: Invest in high-rated corporate bonds for steady returns with moderate risk.

Low-Risk Investments
Debt Mutual Funds: Invest in debt mutual funds for stable returns and lower risk.

Fixed Deposits and PPF: Continue investing in PPF for safe, tax-free returns. Consider fixed deposits for short-term needs.

4. Generating Monthly Income Post-Retirement
Systematic Withdrawal Plan (SWP)
An SWP allows you to withdraw a fixed amount from your mutual fund investments regularly. This provides a steady income while keeping your principal invested for growth.

Dividend-Paying Mutual Funds
Invest in mutual funds that offer regular dividends. This provides an additional income stream.

Interest from Debt Investments
Interest from fixed deposits, corporate bonds, and debt mutual funds can provide a stable income post-retirement.

5. Additional Considerations
Emergency Fund
Maintain an emergency fund equivalent to 6-12 months of your expenses. This should be easily accessible and invested in liquid instruments like savings accounts or liquid mutual funds.

Tax Planning
Opt for tax-efficient investments to minimize your tax liability. ELSS funds offer tax benefits under Section 80C, while PPF provides tax-free returns.

Regular Portfolio Review
Review your portfolio annually to ensure it remains aligned with your goals and risk tolerance. Rebalance your portfolio as needed to maintain the desired asset allocation.

6. Steps to Achieve Your Goals
Increase SIP Investments: Gradually increase your SIP amount by 10% annually to build a larger corpus.

Diversify Investments: Allocate your investments across equity, balanced, and debt mutual funds for diversification.

Invest Lump Sums Wisely: When you have additional funds, invest them in a mix of equity and debt instruments.

Utilize PPF Wisely: Continue contributing to PPF for safe, tax-free returns.

Plan for Monthly Income: Use SWPs, dividend-paying funds, and interest from debt investments to generate a steady post-retirement income.

Maintain an Emergency Fund: Ensure you have sufficient liquidity to handle emergencies without disrupting your investment strategy.

Tax Planning: Invest in tax-efficient instruments and utilize tax benefits to optimize your returns.

Regular Reviews: Review and rebalance your portfolio annually to stay on track with your goals.

Conclusion
You are on a commendable path towards building a substantial retirement corpus. By increasing your SIP investments, diversifying your portfolio, and planning for a steady post-retirement income, you can achieve your financial goals. Regularly review your portfolio and make adjustments as needed to stay aligned with your objectives.

Investing wisely today will secure your financial future and ensure a comfortable and fulfilling retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6266 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 05, 2024

Asked by Anonymous - May 04, 2024Hindi
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Hi, I am a 35 Year old Single Male with a net monthly salary of 1.75 lakhs per month. My accommodation is provided by the company. So my expenses are not much. I invest 90k per month in MFs. I also have additional investments of 1.5 Lakh in PPF, 50k in NPS, 1.5 Lakh in SGB. My goal is to have a Corpus of 25 Crore and retire at 50. Can you suggest anything else that I should do or am I doing alright? MY MFs are a mix of Small cap, Mid Cap and Large Cap with about 50% weight in Small Caps.
Ans: It sounds like you're on a solid financial path with your current investments and savings habits. Here are a few additional suggestions to consider as you work towards your goal of retiring with a corpus of 25 crores:

Review and Adjust Asset Allocation: Given your goal of retiring at 50, ensure your asset allocation aligns with your risk tolerance and time horizon. Consider rebalancing your portfolio periodically to maintain the desired mix of small, mid, and large-cap funds.
Emergency Fund: While your expenses are low, it's still essential to have an emergency fund to cover unexpected expenses or job loss. Aim for 6-12 months' worth of living expenses in a liquid savings account.
Explore Tax-Efficient Investments: Since you're already investing in tax-saving instruments like PPF and NPS, consider exploring other tax-efficient investment options such as ELSS (Equity Linked Savings Scheme) mutual funds or tax-free bonds to optimize your tax savings.
Regular Financial Check-ups: Schedule regular financial check-ups with a Certified Financial Planner to review your progress towards your retirement goal, adjust your investment strategy as needed, and ensure you're on track to meet your objectives.
Consider Real Estate: Real estate can be a valuable addition to your investment portfolio, providing both rental income and potential capital appreciation. However, carefully evaluate the property market and ensure it aligns with your overall investment strategy and risk tolerance.
Overall, continue with your disciplined savings and investment approach, and regularly reassess your financial plan to ensure it remains aligned with your goals and aspirations. With careful planning and prudent decision-making, you're well-positioned to achieve financial independence and retire comfortably at 50.

..Read more

Ramalingam

Ramalingam Kalirajan  |6266 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 14, 2024

Asked by Anonymous - May 13, 2024Hindi
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I am 35 years old, have close to 70lakhs in stocks for msft, 10 lakhs in MF, monthly SIP of 5000 for Ppf and nps. And close to 5l in savings. I would want to retire in the next couple of years with a corpus of 2-3 Crores. Anything else that I can do differently to achieve this?
Ans: Given your current financial situation and retirement goal, there are a few strategies you can consider to enhance your retirement corpus:

1. Evaluate Stock Holdings:
Review your stock investments in Microsoft (MSFT) and assess whether they align with your risk tolerance and long-term goals. Consider diversifying your stock portfolio to reduce concentration risk.

2. Optimize Mutual Fund Investments:
Review the performance of your mutual fund investments and consider reallocating funds to better-performing funds or those aligned with your retirement timeline and risk profile.

3. Increase Monthly SIPs:
Consider increasing your SIP amounts for PPF and NPS to accelerate wealth accumulation. This will help you build a larger retirement corpus over time, especially considering the tax benefits associated with these investment avenues.

4. Explore Additional Investment Avenues:
Look into other investment options such as debt funds, real estate investment trusts (REITs), or alternative investments to diversify your portfolio further and potentially boost returns.

5. Budgeting and Saving:
Review your monthly expenses and identify areas where you can reduce unnecessary spending. Allocate these savings towards your investment portfolio to accelerate wealth accumulation.

6. Seek Professional Advice:
Consider consulting a Certified Financial Planner to develop a customized financial plan tailored to your retirement goals, risk tolerance, and investment preferences. They can provide personalized guidance and recommendations to optimize your investment strategy.

Conclusion:
By implementing these strategies and staying disciplined in your savings and investment approach, you can work towards achieving your retirement goal of accumulating a corpus of 2-3 Crores in the next couple of years. Regularly review and adjust your investment plan as needed to stay on track towards financial independence in retirement.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6266 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 19, 2024

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Dear Sir, I am 53 yrs. I want to retire @60 with a INR 2.00 Cr Corps. Currently I have following SIP Total SIP 30000/- PM Axis Bluechip Fund - Regular Plan - Growth HDFC Mid-Cap Opportunities Fund - Growth Plan Aditya Birla Sun Life Pure Value Fund - Growth Option Aditya Birla Sun Life Equity Advantage Fund - Regular Growth Sundaram Mid Cap Fund Regular Plan - Growth Bajaj Finserv Flexi Cap Fund -Regular Plan-Growth Franklin India Focused Equity Fund - Growth Plan Franklin India Smaller Companies Fund-Growth HDFC Top 100 Fund - Growth Option HDFC Multi Cap Fund - Growth Option I have MF Investment @ 26.00 Lakh Current Value is @ 52.00 Lakh. I have Savings of Rs. 10.00 Lakh, PPF Rs. 5.00 Lakh, Share investment Current Market Value around Rs. 20.00 Lakhs. I don't have any Loan. Per month earning around Rs. 1.25 Lakh. Suggest how i can increase my Corpus for retirement.
Ans: Achieving your retirement goal is possible with careful planning. You already have a strong foundation with diversified investments. Let's delve into how you can boost your retirement corpus by the time you turn 60.

Understanding Your Current Financial Situation
You have:

SIP investments: Rs. 52.00 Lakhs.
Savings: Rs. 10.00 Lakhs.
PPF: Rs. 5.00 Lakhs.
Share investments: Rs. 20.00 Lakhs.
Monthly earning: Rs. 1.25 Lakh.
No loans.
This is a solid start. Your diversified investment approach is commendable, indicating a good understanding of risk management.

Enhancing Your Investment Strategy
To achieve your goal of Rs. 2 Crore, we need to enhance your investment strategy. Here are some steps:

1. Increase SIP Contributions

Your current SIP of Rs. 30,000 per month is a great start. Consider gradually increasing your SIP contributions by 10-15% annually. This step-up SIP approach helps combat inflation and increases your investment corpus significantly over time.

Evaluating Existing Investments
2. Assess Performance Regularly

Monitor the performance of your mutual funds at least annually. If certain funds underperform consistently, consider switching to better-performing ones. This doesn't mean frequent changes but strategic adjustments.

3. Diversify Within Equity Funds

While you have a diversified portfolio, ensure you have exposure across large-cap, mid-cap, and small-cap funds. This reduces risk and captures growth opportunities in different market segments.

Maximizing Returns from Existing Assets
4. Optimize Share Investments

Given your share investments of Rs. 20 Lakhs, regularly review and rebalance your portfolio. Focus on fundamentally strong companies with growth potential. Consider seeking professional advice to optimize stock selection.

5. Utilize Savings and PPF Wisely

Your savings and PPF are safe but lower-return instruments. Continue contributing to PPF for its tax benefits and safe returns. However, you might want to invest a portion of your savings in higher-return instruments like balanced funds.

Implementing Strategic Financial Decisions
6. Tax Planning and Efficiency

Tax-efficient investing can significantly boost your returns. Utilize ELSS funds for tax-saving under Section 80C. Also, plan withdrawals and redemptions strategically to minimize tax liabilities.

7. Emergency Fund Allocation

Ensure that your emergency fund (3-6 months of expenses) is maintained. This fund should be liquid and easily accessible, without disturbing your long-term investments.

Leveraging Professional Guidance
8. Engage with a Certified Financial Planner

A Certified Financial Planner (CFP) can provide personalized advice, ensuring your investments align with your goals. They can also help with tax planning, risk management, and estate planning.

Adopting a Long-Term Perspective
9. Focus on Long-Term Goals

Avoid short-term market noise. Stick to your long-term investment strategy. Markets are volatile, but historically, they tend to reward disciplined investors over time.

Regular Monitoring and Adjustments
10. Annual Review and Rebalancing

Conduct annual reviews of your portfolio with your CFP. This ensures your asset allocation stays in line with your risk tolerance and goals. Rebalancing helps maintain the desired investment mix.

Retirement Planning Beyond Investments
11. Budgeting and Lifestyle Planning

Plan your retirement lifestyle and estimate your expenses. This helps in setting realistic financial goals and ensures your corpus lasts throughout retirement.

Exploring Additional Investment Avenues
12. Alternative Investments

While equity and debt are primary, explore alternative investments like gold or international funds for added diversification. However, keep these to a small percentage of your portfolio.

Ensuring Insurance Coverage
13. Adequate Insurance

Ensure you have adequate health and life insurance coverage. This protects your investments from being eroded by unforeseen medical or life events.

Final Insights
By systematically increasing your SIPs, optimizing existing investments, and leveraging professional advice, you can achieve your retirement goal. Regular reviews and strategic adjustments are key to staying on track. Remember, discipline and patience are your best allies in this journey.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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