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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Nov 06, 2020

Mutual Fund Expert... more
Navneet Question by Navneet on Nov 06, 2020Hindi
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I am 40 Yr old and investing 10k each in below MF from last 2 yrs. My target is to build corpus of 50L for kids education by 2026 and 2.5 - 3.0 cr retirement corpus by 2035. Suggest if i need to make changes. My monthly expense now is ~70K /month. Is the 3Cr corpus for retirement is good? 

Invesco India Tax Plan - Gr
Kotak Emerging Equity Fund - Gr
Axis Multicap Fund - Gr
Axis Small Cap Fund - Gr
Invesco India Growth Opportunities Fund - Gr
Kotak Equity Opportunities Fund - Gr

Ans: For ELSS Canara Robeco Equity Tax Saver Fund Regular Growth is a better option available 

For Large & Mid Cap Kotak is fine and Uti Equity Fund-growth Plan-growth OR Parag Parikh Long Term Equity Fund- Regular Plan Growth can be considered instead of Invesco India Growth Opportunities Fund – Gr

With 60,000 Monthly SIP, Required corpus for the Kid's Education can built in 8 years / 2026

For Retirement also the required corpus can be built with these monthly SIP by 2035 

Investment of this retirement corpus in 2035 in three Debt and 1 Hybrid Balanced with a SWP 1,70,000 / PM will provide perpetually adjusted for inflation than for nearly 20 years post 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  |7915 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2024

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Hi Sir, In 5 year I need 30 lakhs corpus, for the same I am investing 30000 per month as follows: 5000 in Nippon large Cap direct growth, 5000 in Nippon India small cap; 5000 in Parag parikh Flexi cap; 5000 in HDFC Transportation and logistics fund; 5000 in Amazon, 1000: Google; 5000 Vanguard S&P 500. Do I have right selections or need to rectify/add/change values or Funds? Also I am using INDMoney for same, any comment on the same?
Ans: Your proactive approach towards building a corpus for your future goals is commendable. Let's delve into your investment strategy.

You've chosen a mix of funds spanning various sectors and geographies, which is akin to cultivating a diverse garden. While each plant has its unique value, it's essential to ensure they collectively thrive. The global exposure with Amazon, Google, and Vanguard S&P 500 can offer growth opportunities, while domestic funds can provide stability.

However, having a human touch in your investment journey can make a world of difference. Digital platforms, though convenient, lack the warmth and emotional support that an AMFI certified Mutual Fund Distributor (MFD) can offer. They can guide you through market fluctuations, aligning your investments with your goals and risk profile. This personalized approach ensures that your financial journey isn't just about numbers but also about understanding and empathy.

In summary, while your fund selection is diverse, consider partnering with an MFD to enrich your investment experience.

..Read more

Sunil

Sunil Lala  | Answer  |Ask -

Financial Planner - Answered on Jan 09, 2024

Asked by Anonymous - Dec 31, 2023Hindi
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I have a corpus of 1 cr in mf with an ongoing monthly sip of 85k..have invested 6 lacs in stocks..I am investing 1.5 lacs each In both ppf and sukanya samridhi scheme for the past 5 years.. I also have invested in hdfc sanchay annuity plan around 5.5 lacs annually for the past 4 years which will give me a monthly income from the 12th years of 50 k.. I have FDs of around 3 cr which is giving me a return of 7% annually.. I have 2 kids and I am 43 yrs old. I am looking at building a corpus of 40 cr plus on my retirement.. I have been investing in mf since 2017.. The funds that I am investing in are 1) axis.mid cap 2) canara robeco emerging equities 3) Nippon small cap 4) Parag Parikh flexi cap 5) quant flexi cap 6) Mirae asset mid and larg cap 7) icici nifty 50 index 8) SBI focussed equity 9) hdfc balanced advantage fund 10) SBI equity hybrid fund Plz suggest if these funds are fine to reach a target of 40 cr plus in the next 17 years... My kids are 10 and 4 yrs old respectively and I want to keep 1.5 cr plus for their education. When they attain the age of 18 years respectively. Kindly suggest do I need to change the investment plan and mutual funds or should I continue with the same strategy to achieve my goal.
Ans: You can not reach to your target of 40 crores plus education corpus of 1.5 cr for 2 children as most of your money is getting invested in fixed income type of instruments, since your goal is still 17 years away you can convert theses fixed income in mutual funds.

..Read more

Ramalingam

Ramalingam Kalirajan  |7915 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Asked by Anonymous - Apr 19, 2024Hindi
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Hello Sir, I need some financial advice and modification if needed. I am 32 yo and I am investing below funds since 2 years - 1)Parag Parikh Flexi Cap Fund Direct Growth 5K 2)Axis Midcap Fund - Growth 2K 3)SBI Contra Direct Plan Growth 10K 4)Nippon India Small Cap 5K 5)Canara Robaco Small Cap 5K 6)Quant Small Cap Fund Direct Plan Growth 5K 7)Tata Digital India Direct Growth 10K Please suggest if i should continue this or change this. I am planning to invest for next 15-20 yrs.My goal is to create a corpus for my kids education and retariment.
Ans: Diversified Investment Strategy
You have a well-diversified portfolio, which is crucial for mitigating risks and achieving long-term growth.

Diversifying across various market capitalizations can balance risk and reward effectively.

Your portfolio covers flexi-cap, mid-cap, contra, small-cap, and sector-specific funds.

Evaluating Current Funds
Flexi-cap funds provide flexibility to invest across market capitalizations, adapting to market conditions.

Mid-cap funds can offer higher growth potential compared to large-cap funds but come with higher risks.

Contra funds invest in undervalued stocks, potentially offering high returns when the market corrects.

Small-cap funds have high growth potential but are also highly volatile.

Sector-specific funds, like digital funds, can benefit from sectoral growth but carry higher risk if the sector underperforms.

Suggested Modifications
Consider reducing exposure to small-cap funds to mitigate volatility.

Reallocate some investment to more stable, less volatile funds for better balance.

Evaluate the performance and expense ratios of your current funds regularly.

Benefits of Actively Managed Funds
Actively managed funds offer professional management and can outperform the market.

These funds can adapt to market changes, making strategic decisions to maximize returns.

Considerations for Long-Term Goals
Aligning your investments with your long-term goals, like children's education and retirement, is crucial.

Evaluate the risk tolerance and time horizon for each goal.

Higher-risk investments are suitable for long-term goals but ensure you balance with lower-risk options.

Direct vs Regular Funds
Direct funds have lower expense ratios but require more effort in fund selection and monitoring.

Regular funds, through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP), provide professional guidance.

Regular funds can help you make informed decisions, balancing risks and returns effectively.

Rebalancing Your Portfolio
Periodic rebalancing ensures your portfolio aligns with your goals and risk tolerance.

Review your investments at least annually or when significant market changes occur.

Rebalancing helps in capturing profits and reinvesting in underperforming assets, maintaining your desired asset allocation.


Your commitment to investing for your family's future is commendable.

You have made informed choices in diversifying your investments, which is excellent.

Long-term investing requires patience and discipline, and you are on the right track.

Conclusion
Your diversified portfolio is a good foundation for long-term goals.

Consider reducing small-cap exposure and reallocating to more stable funds.

Regular review and rebalancing are essential for continued success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Moneywize

Moneywize   |180 Answers  |Ask -

Financial Planner - Answered on Feb 08, 2025

Asked by Anonymous - Feb 07, 2025Hindi
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Sir I am 60 and I plan to retire in six months after a 35-year career in the public sector. I’ll receive a monthly pension of ₹50,000, but I also have a corpus of ₹1.2 crore from my provident fund, gratuity, and fixed deposits. I’ve historically preferred conservative investments and currently hold ₹40 lakhs in FDs, ₹20 lakhs in senior citizen savings schemes (SCSS), and ₹10 lakhs in tax-free bonds. I’m concerned about inflation eroding my returns over time. My spouse and I have monthly expenses of ₹40,000, but we want to ensure our savings last 25+ years while offering some growth. Should I explore balanced mutual funds, annuities, or SWPs from debt funds to balance safety and growth? What percentage of my corpus should remain in fixed income?
Ans: You have built a solid retirement corpus and a stable pension income, but considering inflation and longevity, it’s wise to balance safety with moderate growth. Here’s a structured approach:
1. Core Strategy: Balancing Stability & Growth
Your primary goals are:
• Capital Preservation
• Inflation Protection
• Regular Income
Since you have Rs 50,000 in pension and Rs 40,000 in monthly expenses, your pension alone covers your basic needs. Your investments should focus on sustaining wealth and managing inflation.
2. Portfolio Allocation (Safety vs. Growth)
Given your risk-averse nature, a 70:30 allocation between fixed income and equity could work well:
• 70% in Fixed Income (Rs 84 lakh) for Stability
o Fixed Deposits (FDs) → Rs 30 lakh (existing Rs 40 lakh can be reduced to 30 for liquidity)
o Senior Citizen Savings Scheme (SCSS) → Rs 20 lakh (already invested, good for 5 years at 8.2% interest)
o Tax-Free Bonds → Rs 10 lakh (keep as is, safe & predictable)
o Debt Mutual Funds (SWP) → Rs 24 lakh
? Invest Rs 24 lakh in a corporate bond or dynamic bond fund
? Start Systematic Withdrawal Plan (SWP) of Rs 15,000–Rs 20,000 monthly (to fight inflation)
• 30% in Growth Assets (Rs 36 lakh) for Inflation Hedge
o Balanced Advantage Funds (Rs 12 lakh): These funds dynamically manage equity and debt, reducing risk.
o Large-Cap or Index Funds (Rs 12 lakh): Nifty 50 or Sensex funds for steady, long-term growth.
o Dividend-Yield Mutual Funds (Rs 6 lakh): Provide stable returns.
o Gold (Rs 6 lakh): Can be in sovereign gold bonds (SGBs) or gold ETFs for inflation protection.
3. Income Strategy: SWP + Interest
Your monthly pension of Rs 50,000 is enough for now, but you may need extra income later. Use:
• SCSS interest (Rs 16,000/month) + Tax-Free Bond Interest (~Rs 3,000/month)
• SWP from debt mutual funds (Rs 15,000/month from Rs 24 lakh in debt funds)
• FD interest (if needed, Rs 30 lakh in FDs can provide Rs 12,000–Rs 15,000/month)
This way, your pension covers essentials, and investments handle inflation without eroding principal.
4. Should You Consider Annuities?
• Annuities (like LIC Jeevan Akshay VII or HDFC Life Immediate Annuity) provide lifelong income but lock in money permanently.
• Since you already have a pension, you don’t need an annuity right now. But if you want to secure future cash flow, consider putting Rs 10-Rs 15 lakh in an annuity after age 70.
5. Action Plan for the Next 6 Months
• Restructure FDs: Keep Rs 30 lakh instead of Rs 40 lakh for better liquidity.
• Invest Rs 24 lakh in Debt Funds for SWP: Choose corporate bond or dynamic bond funds.
• Allocate Rs 36 lakh in Balanced/Equity Funds: Focus on inflation protection.
• Continue SCSS & Bonds: Good for stable income.
• Review Annuitization at 70: Not needed now, but worth considering later.

...Read more

Moneywize

Moneywize   |180 Answers  |Ask -

Financial Planner - Answered on Feb 08, 2025

Asked by Anonymous - Feb 07, 2025Hindi
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Dear experts, I’m 50 now and I want to retire by the age of 60. I have saved ₹70 lakhs in mutual funds (split across equity and hybrid funds), ₹15 lakhs in PPF, and ₹10 lakhs in NPS. While I’m focused on building my retirement corpus, healthcare costs worry me. Both my parents had chronic illnesses that required expensive long-term care, and healthcare inflation is a significant concern. I currently have a ₹10 lakh health insurance policy through my employer, but I’m unsure if this will suffice post-retirement. Should I consider a super top-up plan or invest in health-focused mutual funds? Are there health plans designed specifically for retirees? How can I ensure my retirement savings are protected from unexpected medical expenses?
Ans: You're taking a prudent approach by planning for healthcare costs in retirement. Given your concerns, here’s how you can protect your retirement savings from unexpected medical expenses:
1. Enhance Your Health Insurance Coverage
Since your employer-provided Rs 10 lakh health insurance will likely end when you retire, it's crucial to secure independent coverage. Consider the following:
• Super Top-up Plan: A cost-effective way to increase your coverage. For example, you can take a Rs 25-Rs 50 lakh super top-up plan with a Rs 5-Rs 10 lakh deductible.
• Standalone Family Floater or Individual Health Insurance: Purchase a comprehensive plan for at least Rs 20-Rs 30 lakh.
• Senior Citizen Health Insurance: Some insurers offer specific plans for retirees, but these often come with higher premiums and limitations. It's better to buy a policy before you turn 55.
2. Create a Medical Emergency Fund
Set aside Rs 10-Rs 15 lakh in a liquid or ultra-short-duration mutual fund for unforeseen medical costs not covered by insurance.
3. Invest in a Health-Focused Mutual Fund?
Rather than investing specifically in a health-focused mutual fund (which is sector-specific and volatile), focus on:
• Multi-asset funds or balanced advantage funds that provide stability.
• Senior Citizen Savings Scheme (SCSS) for a secure income stream post-retirement.
• Debt mutual funds or fixed deposits for liquidity.
4. Long-Term Care Planning
• Consider critical illness insurance (covers conditions like cancer, stroke, and heart disease) as a lump sum benefit.
• Evaluate home healthcare plans that cover domiciliary hospitalization and elder care services.
Action Plan for the Next 10 Years
1. Buy a comprehensive health insurance policy (Rs 20-Rs 30 lakh) + a super top-up now.
2. Build a dedicated healthcare fund (Rs 10-Rs 15 lakh in safe instruments).
3. Diversify retirement savings—increase SIPs if possible and allocate some funds to low-risk options like SCSS or debt funds.
4. Consider critical illness insurance before you turn 55.

...Read more

Ramalingam

Ramalingam Kalirajan  |7915 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 08, 2025

Asked by Anonymous - Feb 08, 2025Hindi
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Ramalingam

Ramalingam Kalirajan  |7915 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 08, 2025

Asked by Anonymous - Feb 08, 2025Hindi
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Dear Sir, At present, I have Rs. 75,00,000/- in SB account. Can I earn Rs. 60,000/- per month through SWP, if I invest this amount in mutual funds.
Ans: You want to generate Rs. 60,000 per month from Rs. 75 lakh. This means you need Rs. 7.2 lakh per year.

The biggest challenge is ensuring the corpus lasts long. If the withdrawals exceed the growth rate, the money will deplete faster.

A well-planned Systematic Withdrawal Plan (SWP) must balance growth, risk, and longevity.

Key Factors to Consider Before Investing

Inflation Impact

Expenses will rise over time.
A higher withdrawal rate today can lead to shortfall later.
Your plan should account for increasing withdrawals in the future.
Investment Risk

Mutual funds carry market risk.
Equity funds may give higher returns but fluctuate.
Debt funds are stable but may not beat inflation.
A mix of both is better.
Tax Efficiency

SWP from equity funds after one year has lower tax impact.
LTCG above Rs. 1.25 lakh is taxed at 12.5%.
Debt fund SWP is taxed as per your income slab.
Tax-efficient withdrawals increase corpus sustainability.
Longevity of Corpus

If your investments grow at 10% and you withdraw at 9%, funds may last long.
If growth is 8% but withdrawals are 12%, corpus may deplete soon.
A sustainable withdrawal rate is key.
Can Rs. 75 Lakh Sustain Rs. 60,000 Monthly?

If Growth is Low (6-8%)

The corpus may last for 12-15 years.
This may not be enough for long-term needs.
If Growth is Moderate (10-12%)

The corpus may last over 20 years.
A balanced approach is needed.
If Growth is High (Above 12%)

Higher returns can extend corpus life.
But market fluctuations will impact withdrawals.
Better Approach to Ensure Sustainability

Start with a Lower SWP Initially

Instead of Rs. 60,000, start with Rs. 45,000-50,000.
This gives the corpus time to grow.
Rebalance Annually

Review fund performance.
Adjust withdrawals based on market conditions.
Mix of Equity and Debt

Keep 60% in equity for growth.
Keep 40% in debt for stability.
Keep a Buffer in Liquid Funds

Maintain 6-12 months of expenses in liquid funds.
This helps avoid withdrawing in a market downturn.
Tax-Efficient Withdrawals

Use long-term capital gains benefits.
Avoid unnecessary tax outflow.
Alternative Strategies for Income Stability

Dividend Option in Mutual Funds

Some funds provide regular dividends.
But dividends depend on market performance.
Part-time or Passive Income Sources

Rental income, freelancing, or part-time work can reduce withdrawal pressure.
This helps corpus last longer.
Final Insights

Withdrawing Rs. 60,000 per month is possible but may reduce corpus life.
A balanced strategy is needed to ensure long-term sustainability.
Reducing withdrawal amount initially will help.
Regular reviews and rebalancing are important.
A mix of equity and debt ensures growth and stability.
Keeping a liquidity buffer helps during market corrections.
With the right approach, you can generate monthly income while protecting your capital.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7915 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 08, 2025

Asked by Anonymous - Feb 06, 2025Hindi
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I want to retire this year. I am 41. My current corpus 1.2 crore MF, 30 lakh in PF. We live with parents in our own house in Bangalore valued at Rs 1.5 crore. I have a home loan EMI of 35000 that will end in 2032. Monthly expenses 35-40k. Mu wife takes home tuitions and earns Rs 25,000 per month.
Ans: Retiring at 41 is a bold decision. You have built a decent corpus. But early retirement requires careful planning. Let’s analyse your financial situation and create a sustainable plan.

Current Financial Position
Mutual Funds: Rs 1.2 crore
Provident Fund: Rs 30 lakh
Total Corpus: Rs 1.5 crore
Home Loan EMI: Rs 35,000 per month (ending in 2032)
Monthly Expenses: Rs 35,000 to Rs 40,000
Wife’s Income: Rs 25,000 per month
House Value: Rs 1.5 crore (not considered for expenses)
You have a strong foundation. But your corpus must last for decades. Let’s optimise your investments for steady income and growth.

Key Challenges in Early Retirement
Long Retirement Period: You need funds for 40+ years.
Inflation Risk: Expenses will rise every year.
Home Loan: EMI will continue for 8 more years.
Market Volatility: Equity investments will fluctuate.
Medical Expenses: Health costs will increase with age.
A structured approach will help you retire securely.

Managing Monthly Expenses
Your expenses: Rs 35,000 to Rs 40,000 per month.
Wife’s tuition income: Rs 25,000 per month.
Shortfall: Rs 10,000 to Rs 15,000 per month.
Your investments must cover this shortfall and future expenses.

Investment Strategy for Sustainable Income
Your portfolio must balance growth and stability.

Equity Mutual Funds (40-50%)

These will provide long-term growth.
Withdraw only when needed.
Keep a mix of large-cap, flexi-cap, and mid-cap funds.
Debt Mutual Funds (30-40%)

These will provide stability and regular income.
Choose short-duration or corporate bond funds.
Withdraw from this segment first before selling equity.
Fixed Deposits & Bonds (10-20%)

Invest in FDs or government bonds for emergencies.
Avoid locking all funds in long-term deposits.
Emergency Fund (Rs 5-7 lakh)

Keep 12-18 months of expenses in a liquid fund.
This ensures you don’t sell investments during market crashes.
This strategy ensures growth, liquidity, and stability.

Handling Your Home Loan
EMI is Rs 35,000 per month till 2032.
Wife’s income covers most of it.
Instead of full prepayment, make partial prepayments.
Use surplus funds or bonuses to reduce interest.
This will free up cash flow for future needs.
Avoid using all your corpus to close the loan. Investments will generate higher returns.

Medical Insurance & Health Planning
Buy a family floater health insurance of Rs 15-20 lakh.
Ensure it includes critical illness coverage.
Consider a super top-up plan for added coverage.
Keep Rs 5 lakh in a separate medical emergency fund.
Medical costs can drain savings. A strong health cover is essential.

Tax Planning for Retired Life
Mutual fund withdrawals attract capital gains tax.
Equity LTCG above Rs 1.25 lakh is taxed at 12.5%.
Debt mutual fund withdrawals are taxed as per your income slab.
Use systematic withdrawals to manage tax efficiently.
Utilise tax-free PPF withdrawals after maturity.
A tax-efficient withdrawal strategy will help maximise savings.

Income Generation During Retirement
Systematic Withdrawal Plan (SWP) from Mutual Funds

Set up SWP from debt mutual funds for regular income.
Withdraw from equity only when markets are high.
Part-Time Work Opportunities

Your wife earns Rs 25,000 from tuition.
Consider online consulting or freelance projects.
Even Rs 10,000 extra per month can reduce portfolio withdrawals.
A small active income will make your corpus last longer.

Inflation-Proofing Your Future
Expenses will double in 15-18 years.
Keep 40-50% of your portfolio in equity for long-term growth.
Review your portfolio every year and rebalance.
Adjust withdrawals based on market conditions.
Long-term sustainability is key for early retirees.

Final Insights
Your corpus is decent, but early retirement needs discipline.
Don’t use all savings to close the home loan.
Invest in a balanced mix of equity, debt, and fixed-income assets.
Plan systematic withdrawals to manage cash flow and taxes.
Health insurance and emergency funds are essential.
Keep some part-time income to reduce financial pressure.
Revisit your financial plan every year.
A well-structured plan will help you retire peacefully at 41.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

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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