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57-year-old with 50 lakhs in PPF, 30 lakhs in FD: What's next after retirement?

Ramalingam Kalirajan |7787 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Feb 04, 2025

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

Question by Eknath on Feb 03, 2025Hindi

I am at 57 years old. I have own home,no loan. I get house rent income 1.20 laksh per year. My son is in service.my daughter is married. My 50 lakhs in ppf.30 lakhs in bank fd. I will get retired fund nearly 50 lakhs in next year. I have five acres agricultural land but not much income from land. I am planning to do business after retirement. I have own shop but not in running yet. What should I do my next planning?

Ans: You own a home with no loan burden. This provides financial security.

You receive Rs. 1.20 lakh annually as rental income. This is a stable passive income.

Your son is employed, and your daughter is married. This reduces financial responsibilities.

You have Rs. 50 lakh in PPF and Rs. 30 lakh in bank FD. These are safe but low-return investments.

You will receive Rs. 50 lakh as a retirement fund next year. This can be used for financial stability and investment.

You own five acres of agricultural land but it is not generating much income.

You own a shop, but it is not operational yet. You plan to start a business after retirement.

Business Considerations
Starting a business after retirement is a good idea. It will keep you engaged and generate additional income.

Since you own a shop, consider starting a business that requires low investment and minimal risk.

Choose a business based on your skills, interest, and market demand.

Retail, rental, or franchise businesses could be good options.

You can also rent out the shop for a steady income if you don’t want to run a business yourself.

Investment Strategy
Your Rs. 50 lakh PPF is a long-term, tax-free investment. You can continue contributing till the limit.

Your Rs. 30 lakh FD provides safety but low returns. You can move part of it to better options.

Your retirement fund of Rs. 50 lakh should be invested wisely for income generation and growth.

You should allocate funds across different instruments for safety, liquidity, and growth.

Keep Rs. 10-15 lakh in liquid or short-term investments for emergencies.

Invest Rs. 20-25 lakh in balanced mutual funds for growth and stable returns.

Use Rs. 10-15 lakh in high-quality debt funds for low-risk steady income.

Agricultural Land Planning
Since the land is not generating much income, consider alternative uses.

Leasing the land for farming or commercial use can generate regular income.

You can explore high-value crops, dairy farming, or agro-tourism if feasible.

Selling a portion of the land to reinvest in better income-generating assets can be considered.

Retirement Income Planning
Your current rental income is Rs. 1.20 lakh per year. This is a small portion of your needs.

Your business or shop can supplement this income. Ensure it is well-planned and profitable.

Your investments should generate at least Rs. 3-4 lakh per year to maintain financial stability.

Keeping an emergency fund is crucial for unexpected expenses.

Ensure your portfolio has a mix of growth and income assets to sustain for the long term.

Health & Insurance Planning
At 57, medical expenses may rise in the future. Having health insurance is necessary.

If you don’t have adequate health coverage, buy a policy of at least Rs. 15-20 lakh.

Ensure your spouse is also covered under a good health insurance plan.

If you have an old policy, review it to check for sufficient coverage.

If you don’t have term insurance, there’s no need to buy one now.

Tax Planning
Your rental income is taxable. Declare it properly to avoid tax issues.

Interest from FDs is taxable. Use tax-efficient investment options like debt mutual funds.

PPF maturity proceeds are tax-free, so it is a good long-term asset.

If you start a business, maintain proper records to claim deductions and save taxes.

Final Insights
Your financial position is strong, but you need to plan for stable post-retirement income.

Starting a business is a great idea but should be well-planned to avoid losses.

Diversify your investments to balance safety, income, and growth.

Ensure proper health insurance coverage for future medical needs.

Tax planning will help you save more and manage finances efficiently.

Your shop and agricultural land can be used strategically for better income.

Make decisions considering long-term sustainability and financial security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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