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Ramalingam

Ramalingam Kalirajan  |7044 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 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 - Jun 11, 2024Hindi
Money

I am 70 years old. I will be visiting UK for 6 months to be with my son. I am a heart patient. Would like to know about the best health insurance policy during my stay in UK which would cover procedures like angioplasty/ heart surgery and the premium I will have to pay for buying such a mediclaim.

Ans: It’s wonderful that you’ll be spending time with your son in the UK. Considering your heart condition, securing comprehensive health insurance is essential. This guide will help you understand your options and the best approach to finding suitable health insurance for your stay.

Understanding Your Insurance Needs
Coverage for Heart Conditions
Given your heart condition, it’s vital to have coverage for cardiac procedures like angioplasty and heart surgery. Not all travel insurance policies provide this, so you'll need a specialized plan.

Duration of Stay
Since you'll be in the UK for six months, you require a long-term travel health insurance policy. Most standard travel insurance policies cover shorter trips, so ensure your policy matches your duration of stay.

Pre-Existing Conditions
Pre-existing medical conditions can complicate insurance coverage. Ensure the policy explicitly covers pre-existing conditions like heart disease to avoid any claim rejections.

Types of Health Insurance Policies
Travel Health Insurance
Travel health insurance is designed for travelers and provides coverage for medical emergencies, including hospitalization, surgeries, and sometimes even follow-up treatments.

International Health Insurance
International health insurance offers more comprehensive coverage, often similar to domestic health insurance plans. These plans are suitable for extended stays abroad and cover a wider range of medical services.

Specialized Senior Citizen Plans
Some insurance companies offer specialized plans for senior citizens, including those with pre-existing conditions. These plans might be more expensive but provide necessary coverage tailored to seniors.

Evaluating Health Insurance Plans
Coverage
Ensure the policy covers:

Hospitalization
Surgeries, including angioplasty and heart surgery
Doctor consultations
Prescription medications
Emergency medical evacuation
Network Hospitals
Check if the insurance plan has a network of hospitals in the UK. Network hospitals often provide cashless treatment, reducing out-of-pocket expenses.

Claim Process
The claim process should be straightforward and efficient. Look for insurers with a reputation for quick claim settlements.

Premium Costs
The premium cost will depend on factors like age, medical history, and coverage. Get quotes from multiple insurers to compare premiums and benefits.

Steps to Secure the Best Health Insurance Policy
Research and Compare
Start by researching different insurance providers and their plans. Use comparison websites to evaluate policies based on coverage, premiums, and customer reviews.

Contact Insurance Providers
Speak directly with insurance providers to clarify coverage details, especially concerning pre-existing conditions like heart disease. Ask about exclusions and limitations.

Read the Fine Print
Carefully read the policy documents to understand what is covered and what is not. Pay attention to terms related to pre-existing conditions and medical emergencies.

Seek Professional Advice
Consult a Certified Financial Planner (CFP) who specializes in health insurance for international travelers. They can provide personalized advice based on your specific needs and medical history.

Insurance Providers to Consider
Comprehensive Coverage Providers
Look for insurance providers known for offering comprehensive coverage, including major medical procedures. These providers often have plans tailored for long-term stays and senior citizens.

International Insurers
Some international insurers specialize in expatriate health insurance, offering extensive networks and comprehensive coverage. They understand the needs of international travelers and provide suitable plans.

Domestic Insurers with International Plans
Many Indian insurance companies offer international travel health insurance plans. These plans are designed for Indians traveling abroad and provide coverage for medical emergencies and pre-existing conditions.

Additional Considerations
Medical History and Documentation
Keep detailed medical records handy. Insurers may require a thorough medical history and recent health check-ups. Providing accurate information ensures appropriate coverage.

Emergency Assistance Services
Choose a policy that includes 24/7 emergency assistance services. These services can help with hospital admissions, medical evacuations, and coordination with local healthcare providers.

Renewal and Extension Options
Check if the policy offers easy renewal or extension options. This is crucial if your stay extends beyond six months or if you plan to travel again in the future.

Case Study: Example Scenario
Scenario
Mr. Sharma, a 70-year-old heart patient, plans to visit the UK for six months to be with his son. He needs health insurance covering procedures like angioplasty and heart surgery.

Approach
Research and Comparison:

Mr. Sharma starts by researching various health insurance plans. He uses online comparison tools to evaluate coverage, premiums, and reviews.
Contacting Providers:

He contacts several insurance providers to discuss his specific needs. He asks detailed questions about coverage for heart conditions and pre-existing conditions.
Consulting a CFP:

Mr. Sharma consults a Certified Financial Planner specializing in health insurance for seniors. The CFP helps him understand the nuances of different plans and recommends a few suitable options.
Reviewing Policy Documents:

Mr. Sharma carefully reads the policy documents of the shortlisted plans. He pays attention to exclusions, limitations, and the claim process.
Selecting the Plan:

Based on the advice from his CFP and his own research, Mr. Sharma selects a plan that offers comprehensive coverage, including hospitalization, surgeries, and emergency medical evacuation.
Finalizing the Purchase:

He finalizes the purchase by submitting necessary medical documents and completing the application process.
Outcome
Mr. Sharma secures a health insurance policy that covers his heart condition, ensuring peace of mind during his stay in the UK. He benefits from comprehensive coverage, a straightforward claim process, and 24/7 emergency assistance services.

Final Insights
Securing the right health insurance policy for your six-month stay in the UK is crucial, especially with your heart condition. Focus on finding a policy that offers comprehensive coverage, including hospitalization, surgeries, and emergency medical evacuation. Consult a Certified Financial Planner for personalized advice and carefully read the policy documents. With the right insurance plan, you can enjoy your time with your son without worrying about medical expenses.

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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I am Sanjeev Kumar, aged 58, working with a reputed public limited company at a senior level. Our company mandates annual health check up from reputed hospitals in Delhi and I am covered under a floater medical insurance plan. I was diagnosed with Atrial fibrillation more than a couple of years ago and taking two tablets per day (one Beta blocker and one blood thinner) as a precaution as per doctor. Otherwise I am physically fit and active (I successfully run half marathon for last more than 10 years). I intend to have another medical indurance as I am approaching retirement age but insurance companies are reluctant to provide me the same. Please advise what type of medical insurance cover I should have (for self and my wife, 55 yrs) and from which companies! Is online plan okay?
Ans: Hello;

If you have a known illness of the heart unfortunately hardly any general insurance company will come forward to cover you despite other positives.

Because insurance works on probability and when they reckon that probability of claim, in future based on current information, may be high they refuse to underwrite such risks.

Since you are an employee of a public sector company, I suppose your employer may have some group mediclaim plan or coverage for the retirees as well.

Take that coverage even if you have to pay and undergo a waiting period.

Alternatively you may earmark some fixed sum 8-10 L as medical contingency fund for yourself.

For your spouse you should opt for a minimum 25 L healthcare cover from companies such as HDFC Ergo, ICICI Lombard, Bajaj Allianz, SBI General etc which do not entirely depend on healthcare insurance as the only business segment.

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Latest Questions
Ramalingam

Ramalingam Kalirajan  |7044 Answers  |Ask -

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

Asked by Anonymous - Nov 18, 2024Hindi
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Hi, I am 32 now. My in hand salary is 1.30 lakh/month (post deduction of taxes, mediclaim and PF). I have around 15 lakh in PF (combining PPF and VPF). Around 6 lakh in FD. Now, per month I invest 47k in PFs, 20k in FD, 12.5 in Sukanya samriddhi yoyona, 10k in MF. I do not have any outstanding debt, have residential building. If I plan to increase my investment @5% per year, will I be able to create a retirement fund of 20 crore? And will it be sufficient to support me for 30 years podt retirement? (My current livelihood expense per month is around 25k)
Ans: You aim to accumulate Rs 20 crore by retirement (assuming age 60) and sustain a 30-year post-retirement period. Your current financial health is excellent, with no debts, a stable income, and disciplined savings. However, to assess whether your goals are achievable and the sufficiency of Rs 20 crore, let’s examine the following:

Key Assumptions
Time to Retirement: 28 years (till age 60).
Post-Retirement Period: 30 years.
Inflation Rate: 6% per annum (to estimate future expenses).
Investment Returns:
Equity Mutual Funds: 12% annually (post-tax).
Debt Instruments: 6% annually (post-tax).

Step 1: Estimate Future Expenses
Your current monthly expense is Rs 25,000. Considering 6% inflation, the monthly expense will grow significantly by retirement:

At age 60: Rs 1.42 lakh/month (approx).
Annual expense at 60: Rs 17.1 lakh/year.
For a 30-year post-retirement period, Rs 20 crore may suffice with proper withdrawals and portfolio management.

Step 2: Review Current Investments
1. Provident Funds (PF):
Existing corpus: Rs 15 lakh (combining PPF and VPF).
Monthly contribution: Rs 47,000.
Growth potential: Assumed at 7% CAGR.
2. Fixed Deposits (FD):
Current amount: Rs 6 lakh.
Monthly contribution: Rs 20,000.
Growth potential: Assumed at 6% CAGR.
3. Sukanya Samriddhi Yojana (SSY):
Monthly investment: Rs 12,500.
Lock-in: Till daughters turn 18 or 21.
Growth potential: Assumed at 7.6% (current rate).
4. Mutual Funds (MF):
Monthly SIP: Rs 10,000.
Growth potential: Assumed at 12% CAGR.
Step 3: Can You Reach Rs 20 Crore?
With a 5% annual increase in investments, let’s estimate your retirement corpus:

Contributions by Age 60 (Approximate):
Provident Funds (PPF/VPF): Rs 3.2 crore.
Fixed Deposits: Rs 1.2 crore.
Sukanya Samriddhi Yojana: Rs 1.5 crore (depending on daughters' ages).
Mutual Funds: Rs 7.5 crore.
Total Corpus: Rs 13.4 crore (approx).
Gap: Your goal of Rs 20 crore requires an additional Rs 6.6 crore.

Step 4: Bridge the Gap
To achieve Rs 20 crore, consider these adjustments:

1. Increase Equity Exposure:
Currently, equity (MF) comprises a small portion. Shift some fixed-income investments (FDs) to equity funds for higher growth.
2. Review FD Allocations:
FD returns are low after taxes. Redirect a portion of your Rs 20,000 monthly FD allocation to equity funds.
3. Enhance SIPs:
Increase your mutual fund SIPs from Rs 10,000 to Rs 25,000. Even small increases over time can significantly boost your corpus.
4. Annual Step-Up Investments:
Continue increasing investments by 5% or more annually. Regularly review your portfolio to maintain the right equity-debt balance.
Step 5: Post-Retirement Planning
Withdrawal Rate: A safe withdrawal rate is around 3-4% annually. With Rs 20 crore, you can withdraw Rs 80 lakh/year, which accounts for inflation-adjusted expenses.
Portfolio Allocation: Shift 60-70% of your portfolio to debt instruments closer to retirement to reduce risk.

Final Insights
Rs 20 crore is achievable with a higher focus on equity investments and disciplined saving.
Increasing your SIPs and reallocating funds from FDs to mutual funds can bridge the shortfall.
Rs 20 crore should sufficiently support a 30-year post-retirement period, considering inflation.
Consult a Certified Financial Planner (CFP) to monitor and optimise your strategy for consistent progress.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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Hi, I am having Outstanding Home loan amount for my first purchased flat as 9 Lacs.(EMI 21500) Recently I constructed bungalow by taking Home loan for land and constructions as 25 Lacs and 45 Lacs respectively (EMI 23000 and 32000). Thus my current outstanding for both the properties is 79 Lacs. I rented my first flat and living in new constructed bungalow. The rent amount is equal to flat EMI. Is it advisable to sell the flat (Selling price 50 Lacs) to clear the debt and continue the Outstanding loan of 29 Lacs (79Lacs - 50 Lacs) ? Or continue the existing loans and clear the debt early by prepayment's?
Ans: Your current debt of Rs 79 lakh is significant. Selling your first flat could reduce your loan burden by Rs 50 lakh, leaving Rs 29 lakh outstanding. However, decisions should align with long-term goals, affordability, and potential returns.

Here’s a breakdown to help you decide:

Option 1: Sell the Flat and Reduce Debt
Advantages:
Lower Debt Burden: Reduces loans to Rs 29 lakh, significantly decreasing EMI obligations.
Better Cash Flow: Frees up monthly cash for other financial goals or investments.
Reduced Interest Cost: Paying off Rs 50 lakh immediately lowers overall interest payments, saving a substantial amount.
Disadvantages:
Loss of Asset Growth Potential: Real estate prices may appreciate over the years. Selling might mean losing future capital appreciation.
No Rental Income: Selling eliminates the passive income that currently covers your flat’s EMI.
Option 2: Retain Both Properties and Focus on Prepayments
Advantages:
Asset Appreciation: You retain ownership of both properties, benefiting from potential price appreciation over time.
Rental Income: Ongoing rental income can contribute to paying off the flat’s EMI, keeping cash flow stable.
Disadvantages:
High Debt Pressure: Managing a Rs 79 lakh loan requires disciplined budgeting and significant prepayments to reduce interest costs.
Interest Accumulation: Continuing with high debt over the long term increases total interest paid.
Recommended Approach
Selling the Flat May Be Better If:
You prioritise reducing stress from high debt.
You don’t foresee substantial appreciation in the flat’s value.
Clearing a large portion of your debt aligns with your financial comfort.
Retaining the Flat May Be Better If:
You can afford current EMIs and have surplus funds for regular prepayments.
The flat is in a location with strong appreciation potential.
Passive rental income is a key component of your financial plan.
Practical Advice
Evaluate Loan Interest Rates: Check the interest rates for both loans. Prioritise prepaying the one with the highest rate.
Review Budget: Assess whether prepayments are feasible without compromising financial security.
Consider Property Market Trends: Evaluate the appreciation potential of your flat before deciding to sell.
Seek Professional Guidance: A Certified Financial Planner can assess your risk tolerance, long-term goals, and cash flow needs to offer tailored advice.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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hi mam ...i am a mother of two sons one in tenth grade and other in sixth grade.i used to be with my elder one for studies and younger one studies on his own but i will make sure he is learning and help him when he needs. Recently i arranged tuition for elder one and also i am sitting with him but i could not see any improvement on him.I live in a joint family with 91 yrs old fil and 80yrs mil.Since child hood i set routine works ,make him sure that he completes his work.Chasing him for everything make me me unhappy as he needs to learn to prioritize his thing ,his work, etc. Dily conflict is coming with him and we are always in conflict mode. Consulted few psychologist and astrology but all in vain.dont know how to make him to learn his tenth grade where life route takes place.
Ans: Dear Revathi,

You are doing so much my dear...take a break from everything for an hour everyday and focus on your well being and peace of mind. 20-20-20 rule for you, meditate for 20 mins, physical activity for 20 mins and connecting with nature for 20 mins( these are your mini breaks).
If you can add 10 mins of an activity which makes your heart joyful then 'sone pe suhaga'!! Self-care comes first, a happy and joyful mother, wife , daughter-in-law is great to have around the house. You are doing so much don't you think you deserve 1 hr for yourself? Without thinking too much , just go ahead and schedule self-care in your time table.

Now let's solve your son's issue...since childhood you have taught him how to do things, he is grown up enough to do things on his own. Until and unless you allow him to do things on his own, how will he learn to do?
DO NOT CHASE...DO NOT CRITICIZE....DO NOT NAG, tell him what to do once and wait for him to do. If he does it fantastic, else let him face the consequences. Every action has to have consequences.. for eg, not studying will lead to less marks, it's his failure, not yours, let him take ownership of his actions, you are preparing him for life, let him falter now and learn to get up. Be there for him when he falls, your job as a mom is to ensure he is healthy...emotionally and physically. (Keep the atmosphere at home happy because you have another son too, he is younger and needs your attention too)
It is his 10th Std, not yours. Keep telling the importance of studies and scoring well and the need to study consistently( again no nagging). He is grown up now, take him to a place without distractions and have heart to heart conversations as a mom and son. Conflicts are neither good for him nor to you/the entire home.
Trust me, parenting is not an easy job, you have to raise yourself, before you raise a child. It is not an easy world for your son too.....raging hormones, conflicting world, conflicting views....the world at the click of a button, you be his rock solid supporter and cheer leader, be there for your sons, create a loving and caring home, where they feel secure and happy. A mother knows best, trust your instinct( the mother's instinct), believe in yourself and your children!!

Wishing the very best to all of you.. and happy parenting!!

...Read more

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I am 64 years old and previously worked at Observar India Ltd. for over 15 years. However, the organization shut down many years ago, and I do not have the UAN (Universal Account Number) or PF (Provident Fund) number associated with my employment during that period. After my tenure at Observar India Ltd., I began working with Viacom18, where I am currently employed, and I have all the necessary details of my present PF account. I would like to know the process for retrieving or transferring the PF funds accumulated during my time at Observar India Ltd. to my current PF account. Considering that the company no longer exists and I lack the old PF details, what steps can I take to initiate the process? Additionally, what documents or records will be required to locate and claim the funds from my previous employment? Any guidance on dealing with such situations where the employer is no longer operational would be greatly appreciated.
Ans: Hello;

If you don't remember your EPF account number and your employer is closed, you can try these options:

1. Check your salary slip: Employers usually include the PF account number on the employee's salary slip.

2. Visit the EPFO office: You can visit the EPFO office with your identity proof and application form to get your PF number.

3.Call the EPFO helpline: You can call the EPFO helpline for information and to track past accounts.

4.Go to the EPFO website: You can fill out some basic information on the EPFO website to locate your dormant account.

Once you get the pf account number you may proceed for offline or online withdrawal of the same.

Best wishes;

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Ramalingam

Ramalingam Kalirajan  |7044 Answers  |Ask -

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Asked by Anonymous - Nov 18, 2024Hindi
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Please suggest if following investment are good as SIP started last year sep 2023 HDFC Flexi cap 5000, Parag Parikh 5000,SBI L & Mid cap 2500/-, Axis Blue chip fund 2500, AXis Mid cap fund 2500/- HDFC mid-cap opportunities fund 5000, Kotal emerging fund 2500/- Nippon India smal cap fund 5000/- HDFC Pharma & healthcare fund 4000/- Nippon India multicap fund 2500/- HSBC value fund 3000/- Investment are on monthly basis. Pease advise
Ans: Your portfolio demonstrates a proactive approach to wealth building. It includes diverse mutual funds across categories. Monthly SIPs indicate your long-term financial discipline. This is commendable. However, let’s evaluate its alignment with your financial goals.

Below are detailed insights for your portfolio assessment:

Strengths of Your Portfolio
Diversification

You’ve invested in funds from multiple categories. This includes large-cap, mid-cap, small-cap, flexi-cap, and sectoral funds.
A diversified portfolio reduces overall risk. It balances growth potential across market segments.
Consistency

Monthly SIPs ensure disciplined investments. This helps capture market volatility effectively.
Long-term SIPs can create substantial wealth through compounding.
Exposure to Growth Opportunities

Investments in mid-cap and small-cap funds offer higher growth potential. These funds are suitable for long-term wealth creation.
Sectoral funds provide concentrated exposure to booming sectors like healthcare.
Inclusion of Value and Multicap Funds

Value funds identify undervalued stocks. This can deliver long-term growth.
Multicap funds offer flexibility to invest across market capitalizations.
Areas for Improvement
Overlapping Fund Categories

Having multiple funds in the same category might lead to redundancy. For example, multiple mid-cap and flexi-cap funds.
Similar funds can increase portfolio overlap. This reduces the benefit of diversification.
Sectoral Fund Allocation

Sectoral funds like healthcare have high risk. These funds depend on sector-specific performance.
Such funds should have limited allocation in a balanced portfolio.
Number of Funds

A portfolio with too many funds can be hard to track. It dilutes returns without adding significant diversification.
Fewer funds with distinct strategies are easier to manage and monitor.
Portfolio Insights
Risk Assessment

Your portfolio leans towards high-risk categories like mid-cap and small-cap.
Consider balancing it with funds having stable growth, such as large-cap or flexi-cap.
Goal-Based Allocation

Align investments with specific financial goals. For example, retirement, child’s education, or buying a house.
Define timelines for each goal. Adjust fund categories based on risk tolerance and time horizon.
Taxation Awareness

Equity fund gains above Rs 1.25 lakh are taxed at 12.5%. Short-term gains attract 20% tax.
Ensure to account for these taxes in your investment strategy.
Regular Fund Investment Benefits

Investing through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) offers advantages.

They provide expert insights, fund tracking, and timely rebalancing.

Direct fund investments might lack professional guidance. This could lead to suboptimal decision-making during market volatility.

Suggested Course of Action
Streamline the Portfolio

Reduce the number of overlapping funds. Keep one or two funds per category.
Focus on high-quality funds with a proven track record.
Adjust Sectoral Fund Exposure

Limit sectoral fund exposure to a small percentage of your total investment.
Use these funds only for specific, high-risk goals.
Rebalance Annually

Review your portfolio at least once a year. Rebalance it to maintain desired asset allocation.
Shift funds if they no longer align with your goals or risk tolerance.
Emergency Fund Allocation

Maintain a liquid fund or emergency fund equivalent to 6-12 months of expenses.
This avoids withdrawing SIPs during unexpected financial needs.
Monitor Fund Performance

Regularly review the performance of each fund against its benchmark.
Replace consistently underperforming funds with better alternatives.
Long-Term Discipline

Stick to your SIPs, especially during market downturns. This helps average out costs.
Avoid making decisions based on short-term market fluctuations.
Final Insights
Your portfolio reflects a strong commitment to financial growth. However, streamlining your investments can enhance efficiency and returns. Focusing on goal-based allocation ensures better alignment with your financial objectives.

Consider professional guidance to refine your portfolio and stay on track. This ensures your investments work harder for your future.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

...Read more

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Dear Ms. Archana, I am a 50 year old middle management officer & have 24 years of experience in banking industry. But I want to shift to HR or life coaching industry. Kindly guide me with ur coaching & I would also like to work part-timr with your organization if you are satisfied with my skills & knowledge.
Ans: Good afternoon!!

If you have been in the banking industry for the last 24 yrs, don't you think now is the time to consolidate on your skills and do something which brings out your expertise ? Think of moving up the ladder in your organisation or look for coaching/training people to pass a bank exam or any other subject you love to teach.

And trust me 50 is also an age -
1. when you look back and see all that you have accomplished
2. then look into the future and think about all that you wanted to do and want to do
For you to really look into the two questions above, sit with a quite mind and explore all options , write them down for clarity and for the way forward.

If HR is where you want to go in, then look for an MBA in HR while you are continuing to work( I am very particular about being financially independent too during a career shift or the transition phase)!

If Life coaching is what interests you then check out India's leading life coach Puja Puneet and the courses she offers.
To be a life coach is to work a lot on yourself before you can become one.

Working part-time in my organisation is a "no" right now as I am not hiring!!

All the best in your exploration of the self and the clarity on forward path!!

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Ramalingam Kalirajan  |7044 Answers  |Ask -

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Hi sir just to get 1 lakhs per month from mutual fund account, how much total money is required to invest in mutual funds account. Thanks
Ans: To generate a monthly income of Rs 1,00,000 through mutual funds, you need to determine the total investment amount based on the withdrawal rate and expected returns. Here's a detailed analysis:

Key Considerations
Withdrawal Rate

A safe withdrawal rate is around 4–6% annually for sustainable income.
A higher withdrawal rate risks depleting your corpus prematurely.
Investment Returns

Equity mutual funds can give 10–12% annual returns over the long term.
Balanced or hybrid funds may offer 8–10% returns with lower volatility.
Debt mutual funds typically yield 6–8% returns with stable income.
Inflation

Factor in inflation to ensure the corpus lasts through your lifetime.
Taxation

Gains from mutual funds are taxable. This affects your effective returns.
Approximate Corpus Needed
1. Using a 6% Withdrawal Rate
Monthly income required: Rs 1,00,000
Annual income required: Rs 12,00,000
Corpus needed: Rs 12,00,000 ÷ 6% = Rs 2 Crores
2. Using a 4% Withdrawal Rate
Monthly income required: Rs 1,00,000
Annual income required: Rs 12,00,000
Corpus needed: Rs 12,00,000 ÷ 4% = Rs 3 Crores
Recommendations
Invest in Diversified Funds

Allocate your corpus across equity, hybrid, and debt funds.
Equity for growth, debt for stability, and hybrid for balance.
Use SWP (Systematic Withdrawal Plan)

SWP allows you to withdraw a fixed amount monthly.
It ensures steady cash flow without disturbing the investment.
Reassess Periodically

Review returns, inflation, and withdrawal rate annually.
Adjust withdrawal amount to maintain corpus longevity.
Plan for Taxes

Consider the impact of LTCG and STCG taxes on withdrawals.
Equity mutual funds' LTCG above Rs 1.25 lakh is taxed at 12.5%.
Include an Emergency Corpus

Keep 6–12 months’ expenses in a liquid fund.
Avoid dipping into your main corpus for emergencies.
Final Insights
To get Rs 1,00,000 monthly, aim for a corpus of Rs 2–3 crores. Choose mutual funds that align with your risk tolerance and income needs. Start with a Certified Financial Planner to tailor a portfolio for sustainable income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

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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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