Hi, I am 42 yrs old with 50 lac CTC , living in my own apartment(worth 80L). I have another flat(worth 60L) which I have not rented yet. I have no loan running on my name. Below are my investments: 1. Fixed Deposit - 2 Cr. 2. Shares - 2 cr. 3. SGB - 35L 4. Mutual Funds - 25 lacs + 15K SIP 5. 3 PPF A/C plus 1 Sukanya Samriddhi - 23Lacs invested 4. PF - 75Lacs 5. Term Insurance Personal -1.5cr 6. Cash credit to family friends - 40Lacs@12% 7. 1 credit card - 50000 limit 8. Family pension - 40K PM My expenses are max. 50-60 K per month. I am looking 5 Lacs PM income after retirement. What changes would you suggest in my current portfolio?? Regards

Ans: To achieve your retirement target of 20 crores, consider increasing equity exposure gradually through mutual funds, aligning with your long-term horizon. Continuously evaluate real estate holdings for optimal returns and diversify debt investments as needed. Explore tax-saving options like ELSS funds for enhanced tax efficiency. Lastly, consulting a financial advisor for personalized guidance can provide invaluable insights and strategies tailored to your specific goals and risk appetite.

Ans: Current Financial Overview
Salary: Rs 3.5 lakhs per month (lpm)
Flat Rental Income: Rs 25,000 per month
Monthly Expenses: Rs 1.5 lpm
LIC Premium: Rs 2.5 lakhs per annum (pa) until 60 years
Guaranteed Income Retirement Plan Premium: Rs 6 lakhs pa for 8 more years
Monthly SIP: Rs 1 lakh per month
Current Mutual Fund Portfolio: Rs 3.2 crore
Shares: Rs 45 lakhs
Fixed Deposit (FD): Rs 50 lakhs
Public Provident Fund (PPF): Rs 25 lakhs
Debt/Cash: Rs 50 lakhs
Gold Ornaments: Rs 50 lakhs
Children: One in university and one in secondary school
Retirement Goal: Age 50
Retirement Planning Strategy
Maintain and Enhance Mutual Fund Investments
Your monthly SIP of Rs 1 lakh is substantial. Actively managed mutual funds offer potential for high returns. Continue with these investments to grow your retirement corpus.

Increase Equity Exposure
Equity investments generally provide higher returns over the long term. Consider allocating more funds to equity mutual funds for better growth potential. Avoid index funds; actively managed funds can outperform the market.

Fixed Deposits and Debt Investments
Fixed deposits and debt investments provide stability and security. However, they offer lower returns. Maintain a portion in these for emergency funds but focus on growth assets.

Public Provident Fund (PPF)
PPF is a safe investment with tax benefits. Continue contributing to this for secure long-term growth.

Disadvantages of Direct Stocks
High Risk and Volatility
Direct stocks can be very volatile. They carry higher risk compared to mutual funds. Managing a stock portfolio requires time and expertise.

Lack of Diversification
Individual stocks do not provide the diversification that mutual funds offer. Mutual funds spread investments across various sectors and companies, reducing risk.

Professional Management
Mutual funds are managed by professional fund managers. They have the expertise to make informed investment decisions. This can lead to better performance compared to managing stocks on your own.

Consolidate Stocks into Mutual Funds
Consider consolidating your direct stock investments. Redirect these funds into mutual funds for better diversification and professional management.

Gold Ornaments
Gold is a good hedge against inflation. Keep gold as part of your diversified portfolio. However, don't rely solely on it for growth.

Insurance and Guaranteed Income Plans
LIC Premiums
Review your LIC policies. Ensure they align with your financial goals. If the returns are low, consider surrendering and reinvesting in high-growth mutual funds.

Guaranteed Income Retirement Plan
Evaluate the guaranteed income retirement plan. If it doesn't align with your goals, consider redirecting these funds to more lucrative investment options.

Children's Education
Education Fund
Ensure you have a dedicated education fund for your children. Use a mix of fixed income and equity investments to balance risk and growth.

Planning Ahead
Plan for future expenses, including higher education and other milestones. This helps avoid sudden financial burdens.

Debt Management
Home Loans
If possible, consider prepaying home loans. Reducing debt can free up more funds for investments. Focus on loans with higher interest rates first.

Emergency Fund
Maintain an emergency fund covering at least 6 months of expenses. This ensures financial security and avoids liquidating long-term investments prematurely.

Regular Review and Professional Guidance
Portfolio Review
Regularly review your investment portfolio. Adjust your investments based on market conditions and financial goals.

Professional Advice
Seek guidance from a Certified Financial Planner (CFP). They can provide personalized advice and help optimize your investment strategy.

Final Insights
Your current financial situation is strong.

Focus on growing your equity investments and maintaining a balanced portfolio. Consolidate direct stock investments into mutual funds for better diversification. Review and adjust your insurance and guaranteed plans if needed.

Plan for children's education and manage debt wisely. Regular reviews and professional guidance are crucial.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Hello;

You may begin a monthly sip of 80 K into a combination of pure equity mutual funds and continue for 14 years.

At 50, your sip may yield you a corpus of around 3.5 Cr.

The PF corpus will grow over 14 years into a sum of around 1 Cr. No additional contributions are assumed, which may be deemed as surplus.

The gold holding if liquidated and invested in equity mutual funds as lumpsum will yield a corpus of around 0.5 Cr after 14 years.

If you do not wish to liquidate gold holdings then the monthly sip may be hiked to 90 K.

The gold holding will grow in value to around 0.25 Cr over 14 years and 90 K sip will yield corpus of 3.75 Cr+.

Considering both scenarios you achieve your target of 5 Cr in 14 years:

80 K sip-3.5 Cr in 14 years
Pf value-1.0 Cr in 14 years
Gold holdings converted to equity MF holdings: 0.5 Cr in 14 years
Grand Total -5.00 Cr

90 K sip- 3.75 Cr+ in 14 years
Pf Value- 1.00 Cr in 14 years
Gold Value- 0.25 Cr in 14 years
Grand Total -5.00 Cr+

Pure equity MF returns assumed at 12%, PF at 8% and Gold return at 7%.

Happy Investing;

Ans: Hello;

If you want to retire in next 3 years then firstly get the outstanding home loan cleared before you enter into retirement.

You may buy an immediate annuity from a life insurance company for a sum of around 3 Cr.

Assuming annuity rate of 6% it may provide you a post tax monthly income of 1.2 L.

Some amount 15-20 K may be invested as sip in multi asset allocation fund for annuity top up say after 10 years.

Keep 6-8 L as emergency fund and reinvest balance corpus in cumulative FDs of nationalised banks.

It may be utilised to boost your annuity payments after certain time interval to account for inflation.

On insurance front you seem to be well covered which is good.

Make a will and inform your family about the same.

Best wishes

Ans: Hi,

As you yourself said that your portfolio is more on the real estate side, and now you want to build your liquid portfolio in the form of stocks and MFs. You want to earn 2 lakh monthly pension after 58 and want to save 1 crore for kids' higher education. It is possible through right investment.

- Currently your real estate fetches you a monthly rental of 95,000. It is very good. But you are also paying EMI for 80 lakhs loan and home loan. This rent can be directed towards paying EMI directly so that your salary is used solely for the purpose of other goals.
- You are almost saving and investing almost 50% of your salary in various assets like MF, stocks, etf, ssy etc. Diversification is on a good side.
- SSY is good for girl child. Can continue doing the same.
- NPS and PPF are good to go. Continue with this.
- Postal recurring is of less use to you. Can stop or surrender the same based on for how long you have been investing.
- LIC plan - usually return generated by these are only 4-5% over long run; way less than a simple FD. Can redirect these investments into NPS.
- Gold & Silver ETF - 10k monthly is a good start. Keep doing this.
- If you have good knowledge about stock market and have proper time to do research and invest - continue with current investment of 40k per month into stocks. But if you are not doing this research by yourself, then you can redirect new investments to your stocks portfolio into mutual funds.
- By continuing your current contribution to MFs (and increasing it by stocks contribution) - if you invest 1 lakh monthly with an annual step-up of 10%, you will generate a total corpus of 15 crore by the time you turn 58.
This along with your PPF, EPF and NPS will give you a comfortable retirement forever and a big inheritence to your children.
- For kids higher education, set aside 75000 monthly starting now to fulfil this requirement.

As your corpus size if more than 10 lakhs, you should get the help of a professional advisor.
Hence do consult a professional Certified Financial Planner - a CFP who can guide you with exact funds to invest in keeping in mind your age, financial goals and risk profile.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/