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As a 48-year-old with 1.05 CR in stocks, 1.35 CR in mutual funds, 21 L in NPS, 35 L in fixed deposits, and 5 L in PPF, how can I secure a fixed monthly income of 1 lakh?

Ramalingam Kalirajan |8077 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 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 - Jul 15, 2024Hindi

I am 48 lost job and have 1.05 CR in stocks, 1.35 CR in MF, 21 L in NPS, 35 L FD, 5 L in PPF. I want to have a fixed 1L per month. Please suggest.

Ans: Current Financial Position

You have a substantial portfolio across various assets. Here's a breakdown:

Stocks: Rs. 1.05 crore
Mutual Funds: Rs. 1.35 crore
NPS: Rs. 21 lakhs
Fixed Deposits: Rs. 35 lakhs
PPF: Rs. 5 lakhs
Monthly Income Requirement

You need a fixed income of Rs. 1 lakh per month. This amounts to Rs. 12 lakhs annually. Let’s create a strategy to achieve this.

Liquidating Some Assets

Consider liquidating a portion of your stocks. Stocks are volatile and not ideal for regular income. Reallocate these funds to more stable investments.

Utilizing Mutual Funds

Mutual funds can provide regular income. Opt for systematic withdrawal plans (SWPs) in actively managed funds. This will ensure monthly cash flow and tax efficiency.

Fixed Deposits for Stability

FDs are safe and offer guaranteed returns. You can create a ladder of FDs to ensure regular income. This will provide stability to your income.

Public Provident Fund

PPF is a long-term investment. It provides tax-free returns but is less liquid. Use it as a backup for emergencies.

National Pension System

NPS can provide a pension after retirement. At 60, you can withdraw 60% tax-free and convert the rest into an annuity. This will provide additional income post-retirement.

Income from Investments

To generate Rs. 1 lakh monthly, we need to allocate funds wisely. Here’s a suggested allocation:

Fixed Deposits: Rs. 35 lakhs will provide a steady income. At 6%, this will generate Rs. 1.75 lakhs annually.
SWPs in Mutual Funds: Allocate Rs. 1 crore to mutual funds. Withdraw Rs. 75,000 monthly. This ensures Rs. 9 lakhs annually.
Stocks: Liquidate Rs. 50 lakhs. Reallocate to debt funds or FDs for stable returns.
NPS and PPF: Keep these for long-term growth and post-retirement income.
Portfolio Diversification

Diversify your investments to manage risk. Avoid over-reliance on one asset class. Here’s a suggested diversified portfolio:

Equity Mutual Funds: For growth and inflation protection.
Debt Mutual Funds: For stability and regular income.
Fixed Deposits: For guaranteed returns.
PPF and NPS: For long-term growth and retirement planning.
Consult a Certified Financial Planner

A CFP can tailor a detailed plan for you. They can optimise your portfolio and ensure you meet your income goals.

Final Insights

You have a solid portfolio that can generate a fixed income of Rs. 1 lakh monthly. By reallocating and diversifying your assets, you can ensure stable and regular income. Liquidate some stocks and use SWPs in mutual funds for tax efficiency. Use FDs for guaranteed returns and stability.

Consulting a CFP will provide a tailored and optimised plan. This ensures your financial security and meets your income goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

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