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55-Year-Old With 14 Lakh Income: How To Plan for Daughter's Studies & Retirement?

Ramalingam

Ramalingam Kalirajan  |7741 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 18, 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 08, 2024Hindi
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Hi Sir, i am 55, earning around 14L PM , am the single earner in my family. I have a daughter who is 14 year and doing her higher Secondary. I hold the following assets MF- 1.7 cr Shares - 1.6cr Two properties worth - 1.6 cr + land worth - 35 L in cr mkt value. Getting a rental income of 25K from one property and the other one 20K which i give to my monther for her exp ( she lives with me only) still i give her Insurance in HDFC Life which will give a guaranteed return of 27 L when my daughter gets into graduation. + life cover of 1.25 cr which am servicing. + gold and few liquid assets worth 15L . With monthly expenses of around 75K hardly saving much - managing some 20K pm in MF . how to plan for my child studies and a cushion as retirement corpus. As am working in a pvt co, don't see any retirement age as of now.

Ans: Assessing Your Current Financial Situation
You have a robust portfolio with diversified assets. Let's look at your current holdings:

Mutual Funds: Rs 1.7 crore
Shares: Rs 1.6 crore
Properties: Rs 1.6 crore
Land: Rs 35 lakh
Rental Income: Rs 45,000 per month (Rs 25,000 and Rs 20,000)
Guaranteed Return from Insurance: Rs 27 lakh
Life Cover: Rs 1.25 crore
Gold and Liquid Assets: Rs 15 lakh
Monthly Expenses: Rs 75,000
Monthly Savings: Rs 20,000 in Mutual Funds
Planning for Your Child’s Education
Your daughter is 14 years old, and higher education expenses are approaching. Here's a structured plan:

Guaranteed Insurance Return: The Rs 27 lakh guaranteed return will be a significant help when she starts her graduation. This ensures you have a secured fund for her education.

Mutual Funds and Shares: Continue to monitor and adjust your investments in mutual funds and shares to ensure they align with her education timeline. You can consider a systematic withdrawal plan (SWP) from mutual funds when required.

Building a Retirement Corpus
To ensure a comfortable retirement, let's outline your strategy:

Rental Income: Continue to utilize the Rs 45,000 monthly rental income. Consider renting both properties if selling is not a viable option. The rental income can supplement your monthly expenses post-retirement.

Mutual Funds and Shares: With a total of Rs 3.3 crore in mutual funds and shares, ensure a balanced allocation between equity and debt. As you near retirement, gradually increase the proportion of debt to reduce risk.

Monthly Savings: Increase your monthly savings if possible. If you can increase your investment in mutual funds from Rs 20,000 to Rs 50,000 per month, it will significantly boost your retirement corpus.

Liquid Assets and Gold: Keep a portion of your assets liquid for emergencies. You can also leverage gold if needed during retirement.

Insurance and Risk Management
Your current life cover of Rs 1.25 crore is substantial, but review your insurance needs periodically to ensure it remains adequate. Health insurance is also crucial, especially as you age.

Investment Strategy
Mutual Funds: Continue investing in diversified mutual funds. Consider consulting a Certified Financial Planner (CFP) to evaluate the performance of your current funds and explore better-performing options.

Equity Investments: Stay invested in high-quality stocks. Periodically review your portfolio to ensure it is well-diversified and aligned with your risk tolerance.

Key Recommendations
Increase Savings: Aim to save and invest more than Rs 20,000 monthly if possible. This will help you reach your retirement goals faster.

Rental Income: Consider renting out both properties if feasible. This can provide a stable income stream during retirement.

Education Fund: Utilize the guaranteed return from your insurance policy for your daughter's education expenses.

Balanced Portfolio: Gradually shift from equity to debt as you approach retirement to reduce risk.

Final Insights
Your financial foundation is strong. With careful planning and adjustments, you can achieve your retirement goals and provide for your daughter's education. Regularly review and rebalance your portfolio to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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 Kalirajan  |7741 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 2024

Asked by Anonymous - Feb 19, 2024Hindi
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I am 53 with 1 cr corpus , invested in MF( lump sum - equity and SIP of 85 k month for last 2 years) PPF, NSC, stocks, FD . I have 2 children one is working and the daughter is in 12 would like to pursue medicine . I want to know the following A. How do I plan my finances ahead ? B. My daughters education ? My pension ? C. A medical policy is there for 26 lakhs for a family of 4 . Is that enough or I need to take another policy ? D. What amount should I have to lead a decent and comfortable life . Without depending on kids .( have a house of my own ) Kindly help / advice .
Ans: Hello Mr. Kumar Shashi Raj,

It's great that you're actively planning for your financial future and your children's education. Let's address your concerns step by step:

A. Planning your finances ahead:

With a corpus of 1 crore and diversified investments like MFs, PPF, NSC, stocks, and FDs, you're on the right track.
Consider reviewing your investment portfolio periodically to ensure alignment with your financial goals and risk tolerance.
Continue your SIPs and monitor the performance of your equity investments.
Explore options for retirement planning to secure a steady income post-retirement. You can consider instruments like NPS or annuities for this purpose.
B. Your daughter's education:

Since your daughter aims to pursue medicine, it's crucial to plan for the substantial expenses associated with her education.
Estimate the cost of her medical education and explore education loans, scholarships, or other funding options to supplement your savings.
Consider investing in instruments like mutual funds or fixed deposits specifically earmarked for her education expenses.
C. Medical insurance:

Your existing medical policy covering 26 lakhs for a family of four is a good start.
However, considering rising healthcare costs and the possibility of unforeseen medical emergencies, it's advisable to assess if this coverage is adequate.
Evaluate the premium versus coverage benefits and consider topping up your existing policy or purchasing an additional policy for enhanced coverage.
D. Retirement planning and leading a comfortable life:

Determine your desired post-retirement lifestyle and estimate your retirement expenses, including healthcare, travel, and other essentials.
Calculate the corpus required to generate a steady income stream post-retirement, considering factors like inflation and life expectancy.
Aim to build a retirement corpus that can sustain your lifestyle without relying on your children's financial support.
Maximize contributions to retirement-oriented schemes like NPS or voluntary provident fund to boost your retirement corpus.
Regularly reassess your financial plan and make adjustments as needed to stay on track towards your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7741 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 18, 2024

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Hi Iam 42 M, salary 26L, PF 28L. PPF 3.5L, NPS-4L, MF 4.5L, have shares 8L, LIC premium paying 90K per year. House rent 24k per month. Own house no loan, can invest 60K-1L per month. Daughter in 7th, want to have a financial plan for her higher studies (Engineering or Medical) and her Marriage. And also for my retirement with 1 Cr.. Can you suggest how to plan for education, marriage and my retirement ? Shall I put different funds for each goal? Shall I put a single funds to cater to all 3 Goals.
Ans: Understanding Your Financial Situation
Salary: Rs 26 lakh annually
Provident Fund (PF): Rs 28 lakh
Public Provident Fund (PPF): Rs 3.5 lakh
National Pension System (NPS): Rs 4 lakh
Mutual Funds (MF): Rs 4.5 lakh
Shares: Rs 8 lakh
LIC Premium: Rs 90k per year
House Rent: Rs 24k per month
Own House: No loan
Potential Monthly Investment: Rs 60k - 1 lakh
Goals
Daughter’s Higher Education (Engineering or Medical)
Daughter’s Marriage
Your Retirement with Rs 1 crore
Financial Plan for Each Goal
Daughter's Higher Education
Timeline: 5-6 years
Investment Strategy:
Invest Rs 20k per month in equity mutual funds.
Choose a mix of large-cap and diversified funds.
Consider systematic investment plans (SIPs) for disciplined investing.
Utilize education-oriented funds for focused growth.
Daughter's Marriage
Timeline: 10-12 years
Investment Strategy:
Invest Rs 15k per month in a combination of balanced and equity funds.
Allocate a portion to gold investments for diversification.
Utilize SIPs for consistent growth and rupee cost averaging.
Review and adjust the portfolio based on market conditions.
Your Retirement
Timeline: 18 years
Investment Strategy:
Invest Rs 25k per month in diversified equity mutual funds.
Increase contribution to NPS for tax benefits and long-term growth.
Maintain and increase contributions to PPF.
Ensure a balanced portfolio with a mix of equity, debt, and gold.
Consider a systematic withdrawal plan (SWP) for steady post-retirement income.
Portfolio Allocation
Mutual Funds
Equity Funds: For higher returns and long-term growth.
Balanced Funds: For stability and moderate growth.
Debt Funds: For safety and regular income.
Gold Investments: For diversification and inflation hedge.
Provident Fund (PF) and NPS
Provident Fund (PF): Continue contributions for safe, long-term returns.
National Pension System (NPS): Increase yearly contributions for additional tax benefits and retirement corpus growth.
Insurance and Risk Management
Life Insurance: Ensure adequate coverage to protect your family.
Health Insurance: Consider a family floater plan to cover all members.
Creating Separate Funds for Each Goal
Education Fund: Focused on growth with equity investments.
Marriage Fund: Balanced with equity and gold.
Retirement Fund: Diversified with equity, debt, and PPF/NPS.
Additional Tips
Emergency Fund: Keep at least 6 months of expenses in a liquid fund.
Review and Rebalance: Regularly review your portfolio and adjust allocations.
Increase Investments: Gradually increase your SIP amounts as your income grows.
Tax Planning: Utilize tax-saving instruments to optimize your tax liability.
Final Insights
By strategically allocating your investments, you can achieve your goals. Separate funds for each goal provide clarity and focus. Regular reviews and adjustments will keep you on track. Continue disciplined saving and investing to build a secure financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7741 Answers  |Ask -

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

Asked by Anonymous - Jul 14, 2024Hindi
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Hi, I'm 33 yr old and have dependent house wife, 3 yr kid and both parents of 60 yr age. I've in-hand salary after tax is 1.4 Lacs per month and have 40 lac home loan for 10 yrs for a home in village, and I'm staying in rented flat in different city. No Fd, mutual funds and have 12 Lacs in pf. Current Monthly expenses of 50 thousand per month. Home Loan emi if 48k monthly. Have a life insurance of 10 lac for 20 yrs and emergency fund of 5lcs How do I plan my child education and my retirement at the age of 45 yrs.?
Ans: Current Financial Situation
You are 33 years old with a monthly in-hand salary of Rs 1.4 lakhs.

You have a dependent wife, a 3-year-old child, and parents aged 60 years.

You have a home loan of Rs 40 lakhs for 10 years, with a monthly EMI of Rs 48,000.

You live in a rented flat in a different city.

Your monthly expenses are Rs 50,000.

You have no fixed deposits or mutual funds.

You have Rs 12 lakhs in your provident fund.

You have a life insurance policy worth Rs 10 lakhs for 20 years.

You have an emergency fund of Rs 5 lakhs.

Financial Goals
Plan for your child’s education.

Retire at the age of 45.

Evaluation and Analysis
Emergency Fund
Your emergency fund is a good start. Ensure it covers at least six months of expenses.

Provident Fund
Your provident fund of Rs 12 lakhs is a secure investment. Continue contributing to it regularly.

Life Insurance
Your life insurance coverage is low. Increase it to at least Rs 1 crore to protect your family.

Home Loan
Your home loan EMI of Rs 48,000 is manageable but limits your savings capacity.

Recommendations
Increase Savings
Allocate a portion of your salary to increase your savings.

Aim to save at least 20% of your monthly income.

Child’s Education Fund
Start a Systematic Investment Plan (SIP) in a diversified equity mutual fund.

Invest Rs 10,000 per month for your child’s education.

Consider education-specific funds for better returns.

Retirement Planning
Increase your retirement corpus by starting another SIP in an equity mutual fund.

Invest Rs 20,000 per month towards your retirement fund.

Diversify into debt funds for stability as you approach retirement age.

Health Insurance
Secure a comprehensive health insurance plan for your family.

Ensure your parents are also covered under a separate health insurance policy.

Review Investments
Avoid direct mutual funds; instead, invest through a Certified Financial Planner.

Actively managed funds can offer better returns than index funds.

Reduce Debt
Aim to prepay your home loan whenever possible to reduce the interest burden.

Use any bonuses or extra income to make prepayments.

Final Insights
Your financial discipline is commendable. Increase your life insurance coverage and savings.

Start SIPs in diversified equity mutual funds for your child's education and retirement.

Secure comprehensive health insurance for your family.

Plan for home loan prepayments to reduce debt faster.

Review your investments annually with a Certified Financial Planner.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7741 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 24, 2024

Asked by Anonymous - Sep 24, 2024Hindi
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Dear Sir, I am 46 years IT professional currently working and having below investments: PPF - 9 Lacs Mutual Fund - 26 Lacs Fixed Deposit - 42 Lacs PF - 25 Lacs House (Inherited) - 75 Lacs House (Own) - 2 CR (No home Loan) Monthly Take Home Salary (Post Taxes) - 1,10,000 INR Monthly SIP - 65000 INR Monthly expenses - 50,000 INR (School Fees, Household expenses etc...) I have daughter who is 10 Years old. Need to plan for her studies (Graduation and Post Graduation), as well as plan for my early retirement (Age: 50 Years). Corpus Required - 2.5 CR Can you please guide me how I can plan for same.
Ans: First, congratulations on building a solid financial foundation. You’ve accumulated a mix of assets across PPF, mutual funds, fixed deposits, and provident funds. You also own two houses, one inherited and one purchased. Your take-home salary is Rs 1.1 lakh, and you invest Rs 65,000 in SIPs monthly while managing expenses of Rs 50,000. Planning early retirement and your daughter’s education will require careful financial management.

Let’s evaluate your current investments and how they align with your goals.

Financial Goals: Early Retirement and Education Planning
You aim to retire at 50, which is four years away. You also want to fund your daughter’s education for both graduation and post-graduation. These are your two key financial goals.

To achieve this, your investment strategy must focus on:

Building a retirement corpus of Rs 2.5 crore
Ensuring a separate education corpus for your daughter
Let’s break this down.

Evaluating Your Current Investments
Public Provident Fund (PPF)

You have Rs 9 lakhs in PPF, a safe investment with steady returns. This fund should continue as part of your portfolio, providing a stable, risk-free component.

However, PPF alone may not offer the growth you need for retirement or education. It’s a good safety net, but you need more aggressive growth elsewhere.

Mutual Funds (Rs 26 Lakhs)

Mutual funds are a critical part of your retirement and education plan. You already have Rs 26 lakhs invested here, which shows a balanced approach. However, it’s essential to review the types of mutual funds you’re investing in.

For long-term goals, actively managed funds in large-cap or multi-cap categories will help. These funds can provide growth while balancing risk.

Avoid direct funds and index funds, as they may not provide the needed active management or potential growth required for a shorter retirement horizon.

Fixed Deposit (Rs 42 Lakhs)

Fixed deposits offer safety but low returns compared to inflation. Rs 42 lakhs is a significant portion of your portfolio in FDs. Over time, this may not keep up with inflation, especially for long-term goals like education and retirement.

Consider reallocating some of this money into more growth-oriented assets like mutual funds or balanced debt-equity investments. This will help your money grow faster while still maintaining some safety.

Provident Fund (Rs 25 Lakhs)

Provident Fund is a stable, long-term investment. The Rs 25 lakhs you’ve accumulated here will provide additional security. However, like PPF, it won’t be enough to meet your retirement goals due to its conservative nature.

This fund should remain a part of your retirement plan, but you’ll need to supplement it with more aggressive growth strategies.

Real Estate (Inherited House and Own House)

You have two houses—one inherited and one you’ve purchased. While these are valuable assets, real estate is not liquid. Selling these homes may not always be feasible if you need funds urgently.

Instead of depending on real estate for retirement, focus on liquid investments that can be converted into regular income when required.

Structuring Your Investments for Early Retirement
To retire by 50, you need to create a solid corpus of Rs 2.5 crore in the next four years. With your current investments and SIPs, you are on the right path, but some adjustments can help ensure you meet your goals.

Steps to Achieve Early Retirement:
Increase SIP Allocation: Currently, you’re investing Rs 65,000 per month in SIPs. This is a good start, but if possible, increase this amount. Given your monthly take-home salary, you may be able to contribute more toward your retirement corpus.

Shift Fixed Deposits to Higher Growth Investments: As mentioned earlier, Rs 42 lakhs in FDs is too conservative for your goals. Consider transferring some of this into mutual funds, especially large-cap and multi-cap funds, for better returns. You can allocate part of it to debt funds for stability and the rest to equity for growth.

Balanced Asset Allocation: As you approach retirement, aim for a 60-40 or 70-30 equity-to-debt ratio. This will give you the growth needed to meet your corpus goal while also protecting your capital.

Systematic Withdrawal Plan (SWP): Post-retirement, consider using an SWP from mutual funds to generate regular income. This will ensure that your money continues to grow while providing monthly income to cover expenses.

Healthcare and Emergency Fund: Make sure to have a contingency fund and health insurance. Medical expenses can increase with age, so having a separate emergency fund will protect your retirement corpus.

Planning for Your Daughter’s Education
Your daughter is 10 years old, so her graduation and post-graduation costs will arise in the next 8-12 years. It’s crucial to build a separate education fund so that you don’t dip into your retirement savings.

Steps to Achieve Education Goals:
Create a Separate Education Fund: Estimate the future cost of her education, accounting for inflation. Begin setting aside a portion of your investments specifically for this goal. Large-cap and hybrid mutual funds will provide a good mix of growth and stability.

Regular SIP for Education: Increase your SIP contribution or start a separate SIP dedicated to education. This will ensure you accumulate the required corpus by the time she reaches college.

Avoid Reliance on Real Estate: Selling property for education expenses can be risky. Instead, focus on building a liquid fund that can be easily accessed when required.

Managing Your Monthly Expenses
Your current monthly expenses are Rs 50,000, and your salary is Rs 1.1 lakh. You’re comfortably able to invest Rs 65,000 monthly in SIPs. However, when you retire, you’ll need to generate enough monthly income to cover these expenses.

Steps to Manage Retirement Expenses:
Inflation-Adjusted Expenses: Account for inflation in your retirement planning. Rs 50,000 monthly expenses today could double in 15-20 years. Your retirement corpus should generate enough to cover these increased costs.

Sustainable Withdrawal Rate: Plan a safe withdrawal rate from your corpus. Typically, a 3-4% annual withdrawal rate ensures that your corpus lasts throughout retirement.

Emergency Fund: Maintain an emergency fund that can cover at least 12 months of expenses. This provides a cushion for any unforeseen financial needs.

Tax Considerations
Post-retirement, managing taxes will be important. You need to structure your investments in a tax-efficient way to maximise your returns and minimise tax liabilities.

Steps for Tax Efficiency:
Invest in Tax-Saving Mutual Funds: Some mutual funds offer tax benefits under Section 80C. Although you are close to retirement, a portion of your investments can still be directed here to reduce your tax burden.

Provident Fund and PPF: Both PF and PPF offer tax-free interest. These should remain part of your portfolio for tax-efficient growth.

Capital Gains Management: Plan the sale of mutual funds and other assets in a tax-efficient way to minimise capital gains tax.

Final Insights
Your current financial situation is strong, with a diversified portfolio across multiple asset classes. However, to meet your goal of retiring by 50 with a Rs 2.5 crore corpus, you’ll need to make some adjustments. These include reallocating funds from FDs to mutual funds for better growth, increasing your SIPs if possible, and creating a separate education fund for your daughter.

It’s also important to have a well-balanced portfolio that provides growth, stability, and liquidity. Regular reviews of your investments and tax planning will ensure that you stay on track.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

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Hello, I went to kota in class 11 in 2019 I was a below average student there but as soon as my class 12 session was to be started I already started studying the syllabus and was determined that I will crack neet in my first attempt any how but suddenly Covid came and I went back to home ,online classes started but after two months suddenly my mental health started deteriorating and eventually I was rushed to various doctors and finally to a psychiatrist , after a few months of constant visits etc I got diagnosed with schizophrenia ,my medications started heavily impacting my sleep,apettite,emotions etc. my studies got completely stopped slowly slowly till neet 2021 I was in that situation that I can just only sit in exam with no preparation at all I scored very very less again next year as I was not much well I got very less in neet 2022 same story in neet 2023 too then for neet 2024 I started studying a little bit due to not studying properly since two three years I was not studying properly I just watched yt videoes on how to study that ,how to do this and that regarding studies I mean I only accumulated knowledge but didn't took actions which ruined my neet 2024 result too .now my parents enrolled me in a regular central government college in bsc zoology hons. Inside me too for some time I accepted it and tried to move on but unable to do that bcoz I wanted to be a doctor since childhood and also have keen interest in medical study it's almost time for neet 2025 but I am unprepared due to not arriving at a firm decision but now I am almost healthy and decided to prepare for neet 2026 will it be worth the decision? I want to try atleast once with my full potential and dedication rest results will be in god's hands Or should I not prepare and focus on anything else?
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Any competitive entrance exam requires focus, discipline and a lot of hard work. Unfortunately due to your circumstances, this hasn't been possible.
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Asked by Anonymous - Jan 27, 2025Hindi
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I am 48, male, divorced from my wife. I have a 12 year old daughter. I am in love with a colleague in my office who is also married and seeking divorce. We have known each other for 3 years. Her husband recently found about us and has since decided to delay the divorce proceedings. He is not consenting for mutual divorce. While we love and support each other, this new development is now affecting our relationship. Her husband doesn't appreciate us meeting or talking at work or texting each other. He is unecessarily harassing her to make it seem like I am the villain and she should feel guilty about choosing to divorce at the age of 45. I don't see how it is my fault. But I don't want her to go through this pain of dealing with a guy who she doesn't want to live with. Please suggest what I can do to help.
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What can you do other than just be by her side and simply understand her situation?
Her husband perhaps feels threatened by another male stepping in and hence delaying the divorce or not consenting to it will drag this whole thing...On your part, do not get so emotionally invested that it begins to take a toll on your peace of mind. This situation isn't going to be an easy one and it will just stretch your emotional band very thin; both for you and the lady. So, take it slow and it may help not being in the radar much so that the husband also backs off. It's sadly called - playing games.

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Ramalingam Kalirajan  |7741 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 31, 2025

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I am 62 years old.I have 1 Crore at present.I have health insurance for 25 Lakhs.I want to draw an amount of 50,000 per month through systematic withdrawal plan form mutual funds.After my life i want to give a huge Corpus to my son from this investments.Please advice me for my retirement planning.
Ans: 1. Understanding Your Financial Needs
You have Rs 1 crore at present.
You want Rs 50,000 per month through a systematic withdrawal plan (SWP).
The objective is to generate enough income to meet your monthly needs and create wealth for your son.
2. Withdrawal Strategy: SWP Setup
Systematic Withdrawal Plan (SWP) is a smart way to create a monthly income.
You need to ensure that the capital remains growing even while withdrawals happen.
Your goal of Rs 50,000 per month is about Rs 6 lakh per year.
Your Rs 1 crore corpus needs to generate this amount.
A balanced portfolio of equity and debt will help in managing risk while offering growth.
A well-planned SWP structure will ensure that your corpus grows, even with withdrawals.
3. Investment Strategy for Long-Term Stability and Growth
Equity investments are ideal for growth, especially in the first few years.
Debt funds provide stability, reducing volatility in your portfolio.
Mutual funds can be actively managed to meet both income and growth objectives.
Avoid index funds as they lack active management. They follow the market, so they cannot provide higher returns than actively managed funds.
Direct funds, while cheaper, have no expert oversight.
Investing through a Certified Financial Planner ensures you get expert guidance, which enhances returns.
4. Asset Allocation
A balanced asset allocation helps grow your wealth while ensuring stability.
Start with around 40% equity, 40% debt, and 20% in safer assets like gold.
Equities will generate higher returns over time, while debt will give stability.
Gold helps hedge against inflation and provides diversification.
Over time, gradually reduce equity exposure and increase debt allocation to preserve capital.
5. Managing Risk
Risk management is key in your case, especially with a fixed withdrawal amount.
You don’t want to dip into the principal too soon, so focus on risk-adjusted returns.
A combination of mid-cap, large-cap, and hybrid funds provides both stability and growth potential.
Debt mutual funds with shorter durations help balance the risk and returns.
A portion should be allocated to liquid funds or short-term debt funds for emergencies.
6. Health Insurance and Emergency Planning
You already have Rs 25 lakh health insurance, which is a great start.
With rising medical costs, you may need to consider increasing coverage over time.
Set aside an emergency fund equivalent to at least 6 months of expenses in liquid funds.
Ensure that your health insurance is comprehensive and covers critical illnesses.
7. Creating a Legacy for Your Son
You want to leave a substantial corpus for your son.
Your investments should be structured to grow over time, even after your lifetime.
A combination of equity, hybrid funds, and a small percentage in gold can work well.
To ensure the corpus grows, focus on reinvesting dividends and returns.
Also, consider setting up a trust or nominee to ensure your assets are transferred smoothly.
8. Tax Planning for Retirement
Focus on tax-efficient investments.
Long-term capital gains on equity funds are tax-free after a certain holding period.
Debt funds may have a tax advantage if held for more than 3 years.
Take advantage of tax-saving mutual funds if you are eligible for deductions.
Regular review of your tax liabilities helps in keeping your investments tax-efficient.
9. Monitoring and Rebalancing Your Portfolio
Regularly review your portfolio to ensure it’s in line with your retirement goals.
Rebalancing annually will keep your asset allocation on track.
Keep track of your SWP withdrawals and adjust based on market performance.
As you get closer to your desired age, you can reduce equity exposure and increase debt allocation.
10. Avoiding Certain Investment Options
Avoid investing in annuities, as they don’t provide flexibility.
Investment-cum-insurance plans like ULIPs should be reconsidered.
These have high charges and offer lower returns compared to mutual funds.
Insurance should be separate from your investments to achieve higher returns.
Consider surrendering any such policies and reinvesting the amount in mutual funds for better growth.
11. Health and Long-Term Care Planning
Long-term care and medical expenses should be factored in.
After retirement, you may not have a regular income, so insurance will help.
Consider building a portion of your portfolio to cover these needs.
12. Legacy Planning and Nomination
Ensure you have a clear will and nominations for all your assets.
Mutual funds and other investments should have a designated nominee.
This helps transfer assets to your son easily after your lifetime.
Consult a Certified Financial Planner to streamline this process.
13. Review Your Plan Regularly
Keep reviewing your financial goals annually.
Adjust your strategy if there are major changes in market conditions or personal goals.
Your retirement portfolio should be flexible to handle changes in market conditions.
Ensure that any new goals or needs are factored into your investment planning.
Final Insights
Your Rs 1 crore is a great base for building a secure retirement.
Balance your portfolio to generate income while keeping the principal intact.
Actively managed funds are the best choice for long-term wealth generation.
Regular monitoring and a disciplined SWP strategy will help meet your goals.
Build a legacy for your son by ensuring that your investments grow even after your lifetime.
Health insurance, tax planning, and estate planning should be integral to your strategy.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7741 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 31, 2025

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Money
Hello Ramalingam sir. Good day. I'm looking to invest 20L for long term (min 10Y). Please advise how should I diversify the same?
Ans: Investing Rs 20 lakh for the long term requires careful planning. A well-diversified portfolio balances risk and return. Below is a structured approach to diversification.

Understanding Long-Term Investing
Long-term investing builds wealth over time.

A well-diversified portfolio reduces risk.

Regular monitoring is essential for success.

Asset Allocation Strategy
Spreading investments across different asset classes is important.

Asset allocation should match risk tolerance and goals.

Rebalancing every year ensures stability.

Equity Investments for Growth
Equity investments provide higher returns over time.

Investing in quality mutual funds ensures professional management.

Actively managed funds perform better than index funds.

Mid-cap and small-cap funds can give high growth.

A mix of large, mid, and small caps balances risk.

Investing through a Certified Financial Planner ensures better fund selection.

Debt Investments for Stability
Debt investments provide steady returns.

They reduce overall portfolio risk.

Corporate bonds and debt funds offer better returns than fixed deposits.

Government bonds are secure but have lower returns.

A portion of capital in debt instruments gives stability.

Gold for Hedging
Gold acts as a hedge against inflation.

5-10% of the portfolio in gold is beneficial.

Sovereign gold bonds provide interest and capital appreciation.

Gold ETFs and digital gold are convenient options.

International Exposure for Diversification
Investing in global funds provides currency diversification.

Exposure to international markets enhances portfolio strength.

Developed market funds offer stability.

Emerging market funds provide growth opportunities.

Investing in REITs for Real Estate Exposure
Real estate investment trusts (REITs) provide real estate exposure.

They generate rental income and capital appreciation.

REITs are more liquid than physical real estate.

Avoiding Insurance-Based Investments
Investment-cum-insurance plans give poor returns.

ULIPs have high charges and low flexibility.

Insurance should be separate from investments.

Emergency Fund Allocation
Always keep an emergency fund ready.

Three to six months of expenses should be in a liquid fund.

This ensures financial security during unforeseen events.

Tax-Efficient Investing
Investing in tax-saving funds reduces tax liability.

Long-term capital gains from equities are tax-efficient.

Debt investments should be chosen based on tax benefits.

A Certified Financial Planner helps in tax-efficient planning.

SIP vs. Lump Sum Investment
Systematic investment plans (SIPs) reduce market timing risk.

Lump sum investments work well in market corrections.

A combination of SIP and lump sum is effective.

Regular Monitoring and Rebalancing
Portfolio performance should be reviewed yearly.

Rebalancing ensures asset allocation stays aligned with goals.

Market fluctuations require adjustments.

Final Insights
A well-diversified portfolio ensures wealth creation.

Equity, debt, gold, and international funds balance returns and risk.

A Certified Financial Planner helps in building a strong investment plan.

Monitoring investments ensures long-term success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

...Read more

Anu

Anu Krishna  |1471 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jan 31, 2025

Asked by Anonymous - Jan 27, 2025Hindi
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Relationship
Anu mam, I am 21 about to graduate this year. So I am a single child and I just got to know that my parents are planning to separate. They are both seeing different people but none of them have cared to sit down and discuss this with me. I am old enough to make decisions. But I feel betrayed by my own parents. I don't have siblings or cousins with whom I can discuss this. I mean, what happens to me after my parents separate? Where will I stay? What about home? Both my parents are travelling or working late so we hardly spend time together at home to have a conversation. I have suggested several times that I want to talk but there is no response from either of them. There is always some urgent work to attend, some family event coming up and this gets brushed aside. I feel like I am not even their child any more. They have both mentally moved on... and I feel betrayed, lonely. I don't know what to do. Can you help?
Ans: Dear Anonymous,
I am sorry to hear that. It is never easy to understand when your parents are planning to separate and it leaves you with a lot of questions when left unanswered can lead to a very unsettled feeling.
Perhaps they are still wondering how to break the news to you. If they have been avoiding this topic, then it is evident that they are not ready to tell you or it's still in an awkward phase.
You are 21 and obviously there's no point hiding this from you anymore. Make a dinner plan outside of home where they will not be able to move about and cite urgent work etc. Mid-way through dinner, ask them...they may deny or one of them may walk out; but at least they know that you are aware and will want to talk about it eventually. The path to a conversation has opened then and then you can make a plan about how to go about it.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Anu

Anu Krishna  |1471 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jan 31, 2025

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Relationship
Me 38ki hu mera bf 28ka wo mujhse sucha pyar krta hai shaadi bi Krna hai usko but bola ki me 2cr kmalu tb krunga t shaadi usne ghr me baat bhi ni ki apne na mere ki confirm krde ki shaadi t krunga or sagai krle usne BTech science kri hai wo mera office me lga jha selry 18k hai but maine kha ki tum apni qualification me hisaab se khi or job krlo jha 50k mile taki tum mere ghr walo se shaadi ki baat kr sko humre riste ko 4saal ho gye hai but usko m bhoat smjhaya ki khi or job krlo set ho jaye but ni ki or is office me job krha jha 18k milre hai usko fir bolta hai ki me 2cr acount me ho tb me Shaadi krunga tumse but mere ghr wale pressure krhe hai alg or ye koi faisla ni lera hai me kya kru
Ans: Dear Tiya,
Uske paas tumse zyaada waqt hai umar ke hisaab se isiliye woh yeh bol paa raha hai. Woh galat nahin na tum galat ho. Dono apni apni jagah sahi ho.
Aapko apni life mein kya chahiye? Shaadi aur ek pariwaar? Toh aapko yahi sochna chahiye ki kya yeh aapka bf samajhta hai aur kya is waqt woh yeh aapko de paayega. Kamaai ki baare mein bol rahaa hai woh; woh 2 Cr kitne saal aur lagenge? Kya aap intezaar karna chahoge? Agar nahin, toh is waqt woh bhi shaadi nahin karna chahte...toh aap unko majboor nahin kar sakte...Aaraam se soch vichaar kar lijiye aur ek nateeje par aana. Aap intezaar hi karte rahoge aur umar bhi nikla jaayega...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...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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