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55 year old looking to retire early, how to invest 2 Crores for 15 years?

Milind

Milind Vadjikar  | Answer  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 15, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Srinidhi Question by Srinidhi on Nov 08, 2024Hindi
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I am a 55 year guy who wants to hang his boots early. I am a the peak of my career where the money is good but i am seriously exhausted and bored.. I have a corpus of 2CR and want to know where to invest so that we have a decent living standard for the next 15 years atleast given that medical expenses also need to be covered.. I am currently covered with a 10L plan by STAR Health for which i spend 50k per year to cover for my wife and self

Ans: Hello;

The optimal solution for you would be to buy an immediate annuity from a life insurance company for your corpus of 2 Cr.

Considering annuity rate of 6%, this may yield you a monthly payout of around 85 K(post-tax).

You may choose option of joint life(you & your spouse) annuity with return of purchase price to your nominee.

If you shop around, you can better annuity rates.

Consider increasing your health care cover upto 25 L considering rise in cost of healthcare.

Also keep sum of 5-6 L as emergency funds in savings account/liquid mutual funds.

Best wishes;
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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Asked by Anonymous - Feb 11, 2024Hindi
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I am 59 retired with corpus of ?.40 lacs with no retirement pension. Medical insurance sum insurance is ?.5 lacs and no family or financial commitment. To get ?.25k per month, please suggest where to invest. I estimate to live for next 20 years.
Ans: Given your retirement status and financial situation, securing a monthly income of 25,000 INR for the next 20 years requires a carefully crafted plan. Let's explore some options:

Systematic Withdrawal Plan (SWP): Consider investing a portion of your corpus in balanced mutual funds or debt funds and initiate an SWP. This allows you to systematically withdraw a fixed amount each month while potentially preserving your capital.
Senior Citizen Saving Scheme (SCSS): Invest a portion of your corpus in SCSS, offering stable returns and tax benefits for retirees. It provides regular interest payouts, ensuring a steady income stream.
Annuity Plans: Explore annuity plans offered by insurance companies. An annuity plan converts a lump sum into a regular income for a specified period, providing financial security during retirement.
Fixed Deposits (FDs): Invest in FDs with banks or post offices, providing stable returns and liquidity. Consider laddering FDs with varying maturities to optimize returns and access funds as needed.
Dividend-Paying Stocks or Mutual Funds: Invest in dividend-paying stocks or mutual funds, which provide regular income through dividend payouts. Ensure the investments align with your risk tolerance and financial goals.
Real Estate Investment Trusts (REITs): Consider investing in REITs, which offer rental income from commercial properties. However, be mindful of the associated risks and liquidity constraints.
It's essential to strike a balance between growth and stability while ensuring your income needs are met throughout retirement. Consulting with a Certified Financial Planner can provide personalized guidance tailored to your specific requirements and aspirations.

Your dedication to securing your financial future is commendable, and with careful planning, you can enjoy a comfortable retirement with peace of mind.

..Read more

Ramalingam

Ramalingam Kalirajan  |10219 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 29, 2024

Asked by Anonymous - Apr 29, 2024Hindi
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I retired earlier now at 53. Invested 7L in ELSS and using 60L on short term equity trading (with monthly average gain 2L) and having own apartment home worth 40L. Having dependent widowed mother, wife with 13 yrs old daughter. Intended to raise daughter as doctor. Please suggest better investment options.
Ans: Congratulations on your early retirement! It sounds like you've made some good initial decisions, but there's definitely room for improvement to secure your family's future, especially considering your dependents. Here's how you can optimize your investments:

Reduce Risk in Short-Term Equity Trading:

While a ?2 lakh monthly gain from short-term trading sounds impressive, it's a very risky strategy. The market can be volatile, and these gains may not be sustainable. Consider allocating a much smaller portion (maybe 10-20%) to short-term trading and focus on more stable options for the majority of your investable assets (?60 lakh currently in trading).
Focus on Long-Term Growth and Stability:

Increase Investment in ELSS: ?7 lakh is a good start, but for your daughter's education and your retirement needs, you'll likely need a much larger corpus. Consider increasing your SIP amount in ELSS or similar diversified equity mutual funds with a long-term horizon (10+ years).
Explore Debt Options for Regular Income:

You mentioned having a dependent mother and daughter's education to plan for. Consider investing a portion (maybe 20-30%) of your investable amount in safer debt options like Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS) for your mother (if she's above 60), or fixed deposits to generate a regular income stream.
Plan for Daughter's Education:

Doctorate studies can be expensive. Start an SIP in a dedicated child education plan or invest in aggressive equity funds specifically for this goal. Talk to a Certfied Financial Planner for personalized recommendations based on the estimated cost of medical education.
Utilize Your Apartment:

While your apartment fulfills your housing needs, consider if it could generate additional income. Explore options like renting a room if feasible.
Seek Professional Guidance:

Given your multiple financial goals and risk tolerance, consulting a Certified Financial Planner (CFP) can be highly beneficial. They can create a personalized investment plan considering your risk appetite, time horizon, and financial goals.

..Read more

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

Asked by Anonymous - May 14, 2024Hindi
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I am 62 year old, single person. I have my own home. I have a corpus of approx 2 cr. I will be retiring soon. I have mediclaim of 12 laks. Health wise i am good at present. I do not have pension. Suggestion requested for investment & medical expence planning.
Ans: Firstly, let me commend you on your diligent financial planning and prudent decision-making regarding your retirement. It's essential to have a clear strategy in place to ensure financial security and peace of mind during your retirement years. Let's explore some recommendations for investment and medical expense planning tailored to your unique situation.

Retirement Investment Strategy
Diversified Investment Portfolio:

Allocate a portion of your corpus to a diversified investment portfolio comprising a mix of equity, debt, and hybrid instruments.
Aim for a balanced approach that offers growth potential while mitigating risk, considering your age and risk tolerance.
Regular Income Streams:

Explore investment avenues that provide regular income streams to supplement your retirement expenses.
Consider options such as dividend-paying stocks, fixed deposits, and monthly income plans to ensure a steady cash flow post-retirement.
Tax-Efficient Investments:

Opt for tax-efficient investment options to minimize your tax liability and maximize your post-tax returns.
Utilize tax-saving instruments such as Senior Citizen Savings Scheme (SCSS), tax-free bonds, and equity-linked savings schemes (ELSS) to optimize your tax planning.
Medical Expense Planning
Comprehensive Health Insurance:

Review your existing health insurance coverage and ensure it adequately addresses your medical needs.
Consider upgrading to a comprehensive health insurance policy with higher coverage limits and additional benefits to safeguard against rising healthcare costs.
Emergency Fund Provision:

Set aside a portion of your corpus as an emergency fund to cover unexpected medical expenses or other contingencies.
Aim to maintain a liquid reserve equivalent to at least 6-12 months of your living expenses to provide financial security during emergencies.
Regular Health Check-ups:

Prioritize preventive healthcare by scheduling regular health check-ups and screenings to detect any potential health issues early.
Invest in your well-being by adopting a healthy lifestyle, including regular exercise, balanced nutrition, and stress management techniques.
Estate Planning Considerations
Will and Estate Distribution:

Consult with a legal advisor to draft a comprehensive will outlining your wishes regarding estate distribution and asset transfer.
Ensure that your will is updated regularly to reflect any changes in your financial or personal circumstances.
Beneficiary Designations:

Review and update the beneficiary designations on your investment accounts, insurance policies, and retirement accounts as needed.
Confirm that your chosen beneficiaries are accurately designated to facilitate smooth asset transfer in the event of your demise.
Conclusion
As you prepare for retirement, it's crucial to adopt a holistic approach to financial planning that addresses both investment and medical expense management aspects. By diversifying your investment portfolio, securing adequate health insurance coverage, and prioritizing preventive healthcare, you can enjoy a financially secure and fulfilling retirement. Additionally, estate planning measures will ensure that your legacy is preserved and your assets are distributed according to your wishes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Ramalingam Kalirajan  |10219 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 2024

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Hi Sir, I am 38 Yrs old. My income now is 70k and I have '0' savings and investements because of some personal health issues. Now I want to rebuild and I am looking for financial stability with a corpus of 4 Cr on my retirement @ age 55 and a monthly pension/salary of around 50k. How should I plan & where to I invest ?
Ans: You are 38 years old and earn Rs. 70,000 per month. You have no savings or investments due to personal health issues. You aim to build a corpus of Rs. 4 crores by the age of 55. You also want a monthly pension of Rs. 50,000.

Establishing a Financial Plan
Savings and Budgeting:

Start by saving a portion of your salary each month.
Aim to save at least 20% of your income.
Track your expenses to ensure you save consistently.
Building an Emergency Fund:

Save at least 6 months’ worth of expenses.
Keep this fund in a savings account or liquid fund for easy access.
Debt Management:

Clear any existing debts as soon as possible.
Avoid taking new debts unless necessary.
Investment Strategy
Diversified Portfolio:

Invest in a mix of asset classes.
This can include mutual funds, gold, and other Shariah-compliant investments.
Shariah-Compliant Mutual Funds:

Invest in mutual funds that comply with Islamic principles.
These funds avoid companies involved in alcohol, gambling, and interest-based businesses.
Systematic Investment Plan (SIP):

Start a SIP in Shariah-compliant mutual funds.
This allows you to invest regularly and benefit from rupee cost averaging.
Avoid Index Funds:

Index funds are passive and may include interest-based businesses.
Actively managed funds align better with your goals and values.
Benefits of Regular Funds:

Investing through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) credential provides expert guidance.
They help in choosing the right funds and monitor your portfolio.
Retirement Planning
Shariah-Compliant Retirement Funds:

Look for retirement funds that are Shariah-compliant.
These funds avoid interest-based investments.
Health and Life Insurance:

Get health insurance to cover medical expenses.
Consider term life insurance to protect your family’s future.
Takaful Insurance:

Takaful is an Islamic insurance concept.
It is based on mutual cooperation and avoids interest.
Tax Planning
Tax-Efficient Investments:

Invest in instruments that offer tax benefits.
Ensure these are Shariah-compliant.
Maximize Tax Savings:

Utilize deductions under Section 80C and 80D.
This reduces your taxable income and helps you save more.
Regular Reviews and Adjustments
Monitor Your Investments:

Regularly review your investment portfolio.
Adjust your investments based on performance and changes in financial goals.
Stay Informed:

Keep updated on Shariah-compliant investment options.
Attend seminars or consult with experts in Islamic finance.
Final Insights
Begin saving a portion of your salary each month.
Build an emergency fund and clear any debts.
Invest in a diversified portfolio including Shariah-compliant mutual funds.
Start a SIP for regular investment and benefit from rupee cost averaging.
Avoid index funds and choose actively managed funds with expert guidance.
Plan for retirement with Shariah-compliant funds and get adequate insurance.
Regularly review and adjust your financial plan.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Sir I'm confused between Pillai New Panvel and Sies for electronics and computer science course that which is better actually I am interested in cs it but I don't have great percentage i have scored 87 in diploma so for dse which college should I prefer according to placement?
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All the BEST for a Prosperous Future!

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Sir, my son had got provisional admission in RAIT Ramrao Adik Institute of Technology ( DY Patil Deemed to be University Navi Mumbai) for B.Tech in Computer Science and Business systems. Through MHT- CET, he also got alloted Electronics and Computer Science Engineering at Pillai College of Engineering,New Panvel Navi Mumbai. He is interested in Computer Science and Software. But the fees of Pillai's college is lesser than RAIT. He also plans to foray into Entrepreneurship in future if possible. We are not able to understand what to do. Can you please guide?
Ans: Rosesh Sir, Ramrao Adik Institute of Technology (RAIT), under DY Patil Deemed University Navi Mumbai, offers a specialized B.Tech in Computer Science and Business Systems (CSBS) with strong industry-aligned curriculum, reputed faculty, and active student support including entrepreneurship initiatives. RAIT's placement rate is robust, approximately 80%, with median packages around INR 7.5 LPA and top recruiters like TCS, Accenture, Infosys, and Morgan Stanley. The institute encourages innovation and entrepreneurship, supported by its Entrepreneurship Cell, events, and access to startup funding opportunities. On the other hand, Pillai College of Engineering (PCE) in New Panvel provides a B.Tech in Electronics and Computer Science Engineering with a focus on core electronics and computing fundamentals. PCE has about 80% placement consistency with average packages near INR 4.4 LPA and strong IT sector recruiter presence. PCE also fosters entrepreneurship through its Center of Innovation and Entrepreneurship, hosting business plan competitions and startup mentorship. While PCE offers a lower fee structure, RAIT’s specialized CSBS program combined with better placement metrics and stronger entrepreneurship ecosystem gives it an edge for students inclined toward business, technology, and startups.

Recommendation: Opt for RAIT’s Computer Science and Business Systems for superior placement prospects, integrated business-technology curriculum, and active entrepreneurship support, which align well with your son’s interest in computer science and future entrepreneurship aspirations. Choose Pillai College if budget constraints are higher priority, with a strong core engineering foundation and entrepreneurship opportunities still available. The decision should balance financial considerations with academic and career ambitions. All the BEST for a Prosperous Future!

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