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50 years old with 47k salary, preparing for divorce and retirement: how to manage wealth?

Ramalingam Kalirajan |8027 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 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 14, 2024Hindi

I am 50 years old and my salary is 47000. My husband warns 1.5 lacs but we are in a process of divorce. I have only daughter her educational expanses are borne by her father. Till now I am having full medical facility from ny husbands company but I dont know whether divorce will be finalized or not. If divorce happens I wont get his medical facilities. I had started mutual fund 4000 sip in SBI flexi cap fund. I have lumpsum of 130000 in multi cap fund. I have also started sip in sbi contra and large and micap fund. I jave 40000 in multicap and sbi sensex fund in a different folio. I have a RD of 15000 per month which will mature in 2025 April. I have fixed deposit of 250000. I have invested 1.5 lacs in DBS Stock broker agency which give me monthly 12000 interest. Again I have gold of about 8 lacs. I dont have house or a car. I want to have a comfortable retirement and also travel. My only expanse now is to pay the lawyer average 3k per month. My job travel cost is 5k per month.So how should I manage my wealth.

Ans: Current Financial Situation
You are 50 years old with a salary of Rs 47,000 per month.

Your husband earns Rs 1.5 lakhs per month, but you are in the process of getting a divorce.

Your daughter’s educational expenses are covered by her father.

You currently receive full medical coverage from your husband’s company.

You are unsure if you will retain these medical benefits post-divorce.

Investments and Savings
You have a SIP of Rs 4,000 in a flexi-cap mutual fund.

You have Rs 1,30,000 invested in a multi-cap fund.

You have SIPs in contra and large & mid-cap funds.

You hold Rs 40,000 in a multi-cap fund and a Sensex fund.

You have a recurring deposit (RD) of Rs 15,000 per month, maturing in April 2025.

You have a fixed deposit (FD) worth Rs 2,50,000.

You invested Rs 1,50,000 in DBS Stock Broker Agency, receiving Rs 12,000 monthly interest.

You own gold worth Rs 8 lakhs.

Expenses
Your average monthly lawyer fee is Rs 3,000.

Your job travel costs Rs 5,000 per month.

Goals
You aim for a comfortable retirement with the ability to travel.
Evaluation and Analysis
Diversified Investment Strategy
Your investment portfolio is diversified. You have SIPs in multiple funds, fixed deposits, and gold. This helps mitigate risks and ensures stability.

Mutual Fund Investments
Actively managed funds can outperform index funds due to professional management. Avoid direct funds, which might seem cheaper but lack expert guidance. Invest through a certified financial planner to maximize returns.

Fixed Deposits and Recurring Deposits
Fixed deposits and recurring deposits provide stability but offer lower returns compared to equity funds. Diversify further into equity to balance growth and security.

Stock Broker Investment
The Rs 1,50,000 investment yielding Rs 12,000 monthly interest is beneficial. However, ensure you understand the risks and sustainability of this return.

Gold Investment
Gold is a good hedge against inflation and adds to your diversified portfolio. Keep this investment as it provides liquidity in emergencies.

Recommendations
Emergency Fund
Maintain an emergency fund covering at least 6 months of expenses. Your FD and gold investments can act as a buffer, but consider keeping some liquid cash.

Health Insurance
Post-divorce, you might lose medical coverage. Secure a comprehensive health insurance plan for yourself. This will prevent financial strain due to medical emergencies.

Retirement Planning
Continue SIPs in actively managed funds for higher returns.

Increase SIP contributions if possible, especially in equity funds.

Consider diversifying into debt mutual funds for stability.

Evaluate the performance of your current funds annually and make necessary adjustments.

Travel Goals
Plan for travel expenses by setting aside a portion of your investments. Use the interest from your stock broker investment for travel, ensuring it doesn't impact your retirement corpus.

Legal Expenses
Manage legal expenses efficiently. Use part of your monthly income or interest from investments to cover these costs.

Final Insights
Your diversified investment strategy is commendable. Maintain this approach for balanced growth and stability.

Secure a health insurance plan post-divorce to safeguard against medical emergencies.

Continue and increase SIPs in actively managed mutual funds for higher returns.

Reevaluate your portfolio annually with a certified financial planner to stay aligned with your financial goals.

Set aside funds specifically for travel to enjoy a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Asked on - Jul 20, 2024 | Answered on Jul 20, 2024

Thank you sir I will try to increase SIP. I have a Max life insurance policy which cost 25000 per year and will mature in 2033. It will give me 300000. Thank you for your suggestion.

Ans: Your Max Life insurance policy costs Rs. 25,000 per year. It will mature in 2033, giving you Rs. 3,00,000.

Recommendation to Surrender
1. Low Returns:

The expected maturity amount indicates low returns. You can achieve better growth elsewhere.

2. Surrender the Policy:

Consider surrendering the policy. Redirect the premium to mutual funds.

Reinvest in Mutual Funds
1. Higher Growth Potential:

Mutual funds offer higher returns over the long term. They can significantly increase your corpus.

2. Diversify:

Invest in a mix of equity and balanced funds. This provides growth and stability.

Final Insights
Surrender the low-return policy. Reinvest the Rs. 25,000 annual premium in mutual funds for better returns.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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