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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Nov 18, 2022

Mutual Fund Expert... more
Rahul Question by Rahul on Nov 18, 2022Translate
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I am 48 years working professional and till now only invested in EPF & NPS. Considering that, I will be at least working for 10 years, now I am considering to invest in mutual funds for my retirement life. My immediate commitments (like children education / marriage / health, etc., during 10 years of working life ) towards family has been taken care of with provisions.

My take home salary after home loan & other deductions is about 60 k and can spare about 20 - 25 k per month for investment. Please guide me about mutual fund / SIP investment and particularly which ones to invest based on my profile.

Ans: A few schemes that you can consider are:

UTI Flexi Cap Fund – Growth

Axis ESG Equity Fund – Growth

HDFC Index Fund – Sensex Plan – Growth

Samco Flexi cap Fund - Growth

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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Hardik

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Hello Hardik Ji, I am 52 year with a monthly income of around 75K-80K. I want to start the MUTUAL FUNDS / SIP investments for my retirement & my children Future who are in their twenties. Right now I am putting regular money in BANKS RD's / FD's only. Kindly advise / suggest how can i go ahead. Thanks & Regards, RV
Ans: Hello Rahul Ji,

I appreciate that you are thinking about your retirement and your children's future. As a financial advisor, I would be happy to help you start investing in mutual funds and SIPs. Before diving into specific suggestions, let's first understand your financial goals and risk appetite.

Given your age and monthly income, you should aim to diversify your investments for long-term wealth creation and financial stability. While RDs and FDs offer low risk and guaranteed returns, they may not be sufficient for higher returns and beating inflation in the long run. Mutual funds and SIPs can help you achieve better returns, provided you make well-informed decisions and stay invested for a long period.

Here are some steps to help you get started:

Define your goals: Identify the specific financial goals you want to achieve through your investments, such as your retirement corpus and your children's higher education or marriage expenses.
Assess your risk appetite: Determine your willingness and ability to take risks in your investments. As you have been investing in FDs and RDs, it seems that you prefer low-risk options. However, considering your age and goals, you may want to include some moderate to high-risk investments in your portfolio for better returns.
Diversify your portfolio: Invest in a mix of equity, debt, and hybrid mutual funds to spread the risk and optimize returns. You can consider investing in large-cap, mid-cap, and small-cap funds, balanced funds, and debt funds based on your risk appetite and goals.
Start with SIPs: Systematic Investment Plans (SIPs) allow you to invest a fixed amount regularly in a mutual fund, which helps in inculcating a disciplined savings habit and averaging out market volatility.
Consult a financial advisor: For personalized advice, you may want to consult a professional financial advisor who can help you select the right funds and create a tailored investment plan based on your goals, risk appetite, and investment horizon.
Remember, mutual fund investments are subject to market risks, and it's essential to stay informed and monitor your investments periodically. I hope this helps you get started on your journey to financial planning for your retirement and children's future.

Wishing you all the best, Rahul Ji!

Warm Regards,
Hardik
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As part of a couple in our early 30s, along with our elderly parents, we have a combined annual income of Rs 1.08 crores. How can we collectively plan for both our retirement and the financial well-being of our parents in the long run?
Ans: Balancing your financial needs and that of your parents, while planning for retirement, requires a comprehensive strategy. Here's a roadmap to get you started:

1. Understand your financial situation:

Gather information about:

• Income: List down your combined annual income (Rs 1.08 crore) and any other sources of income like rental income or investments.
• Expenses: Track your monthly expenses for a few months to understand your spending habits.
• Debts: List down any outstanding debts like mortgages, car loans, etc., including your parents' debts if applicable.
• Retirement benefits: Check your eligibility and potential benefits from social security or employer-sponsored retirement plans.
• Parents' needs: Estimate your parents' current and future financial needs, including healthcare costs.

2. Set retirement goals:

• Desired retirement age: Decide when you and your partner wish to retire.
• Desired lifestyle: Determine the lifestyle you envision in retirement, considering travel, hobbies, and potential healthcare needs.
• Financial goals: Based on your desired lifestyle and life expectancy, calculate the estimated corpus (total sum) required for your retirement. Consider inflation while making these calculations.

3. Create a financial plan:

• Debt management: Prioritise paying off high-interest debts to free up future income for savings and investments.
• Budgeting: Create a budget that allocates funds for essential expenses, savings, and debt repayments. You can involve your parents in creating a budget for their expenses as well.
• Savings and investments: Explore various investment options like mutual funds, PPF (Public Provident Fund), or NPS (National Pension Scheme) based on your risk tolerance and investment horizon. Utilize tax-advantaged retirement accounts like 401(k)s or IRAs if available to you.
• Healthcare planning: Consider health insurance plans for yourselves and your parents to manage potential medical costs in the future.

4. Open communication and support:

• Discuss openly: Have open and honest conversations with your partner and parents about your financial situation, goals, and expectations. This fosters transparency and builds trust within the family.
• Seek professional guidance: Consulting a financial advisor can help you create a personalized plan considering your specific financial situation and retirement goals. They can also guide you on investment strategies and risk management.

Additional considerations:

• Government schemes: Explore government schemes for senior citizens like the Senior Citizen Savings Scheme (SCSS) or the Pradhan Mantri Jan Dhan Yojana (PMJDY) that may benefit your parents.
• Downsizing: Consider downsizing your living situation or exploring alternative housing options in retirement to potentially reduce living expenses.
• Part-time work: If feasible, consider continuing part-time work in retirement to supplement your income and maintain an active lifestyle.

Remember, this is a general framework, and it's crucial to tailor it to your specific circumstances. Consulting a financial advisor can provide personalised guidance and ensure your financial plan considers all the complexities involved.
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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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