My Age is 47, and my current savings are as follows 1. EPF : 5L 2. PPF : 5L 3. NPS : 5L 4. MF & Equity : 2L 5. FD & Savings : 2L 6. ULIP : 3.5L One parental house , 2 kids who are studying in class 9th and 7th respectively. kindly suggest post retirement mediacal assistance needs and 75k per month

Ans: Since you have eligible deductions of over Rs. 3.70 Lacs it is better to go with the old tax regime.

Plz. seek help from a tax advisor/CA for further clarity.

Ans: Based on claim settlement ratio for FY 23, following is the list of top 2 health insurance providers:
1. Niva Bupa
2. Care Health

Do your due diligence and seek help of an insurance advisor, if needed.

For retirement planning you can consider investing in Retirement mutual funds(equity oriented)via SIP for 10 years. ICICI Pru Retirement fund(equity plan) and HDFC Retirement Savings fund (equity plan) are top two based on 5 yr return yardstick.

For funding child's higher education you can consider Children mutual funds via regular SIP. Top in this category are Tata Young Citizens Fund and UTI Children's equity fund based on 5 yr return yardstick.

Both these funds come with a lock-in of 5 years

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates

Ans: Dear Vivek,
Thank you for your query regarding the recent pension scheme announcement. Let’s understand the key differences between the National Pension System (NPS) and the newly introduced Universal Pension Scheme (UPS) and find out which might be more beneficial for you.
National Pension System (NPS) NPS is a government-backed retirement savings scheme where you contribute regularly during your working years, and the funds are invested in a mix of equity, corporate debt, and government bonds. Upon retirement, you receive a portion of the accumulated corpus as a lump sum, and the rest is used to purchase an annuity that provides a regular pension. Let’s see what are Tax Benefits Contributions to NPS are tax-deductible up to Rs 1.5 lakh under Section 80C and an additional Rs 50,000 under Section 80CCD(1B), making it attractive for tax-saving purposes. The returns on NPS depend on market performance, as it invests in equity and debt instruments. Historically, the average return has been between 8-10%, making it a relatively high-return pension option. If you see 2023 the returns are between 16 to 20%. There is Flexibility to choose your own asset allocation (equity vs. debt) or opt for auto-allocation based on your age and risk profile. For Withdrawals At the age of 60, you can withdraw 60% of the corpus tax-free, while 40% is used to purchase an annuity, which provides a regular pension. For premature exit is only possible after 5 Years after registration. you can withdraw entire amount if corpus is below 2.5 Lakh. If corpus is beyond 2.5 lakh then you can only withdraw 20% and balance 80 % to be invested to buy annuity.
In case of Universal Pension Scheme (UPS) it is a recently introduced pension scheme aimed at providing retirement benefits to all citizens, including those in informal sectors who may not have access to other retirement schemes. It is designed to ensure that every citizen has a basic income after retirement. For Contribution: UPS is likely to have lower contribution requirements compared to NPS, making it more accessible to those with lower incomes or irregular earnings. The scheme promises universal coverage, meaning it is open to all citizens, regardless of their employment status. UPS may offer fixed or modest returns, more similar to a traditional pension plan, and less focused on market-linked investments like NPS. The scheme is likely to be simpler to manage, with fewer choices regarding asset allocation and investment decisions. Under the UPS, the assured pension will be the average basic salary + DA drawn in the previous 12 months before superannuation. This would mean that government employees, at retirement, will get 50% of the average of the last 12 months' salary + DA.
Which One Is More Beneficial?
If You’re Seeking Higher Returns and Flexibility then NPS would be a better option as it allows for market-linked returns (higher than most traditional pension schemes) and gives you control over your investment choices. It’s ideal for those who want to accumulate a larger retirement corpus.
If You Want Simplicity and Universal Access then UPS could be a good choice for individuals looking for an easy-to-understand, universally available pension scheme with a stable income. It is designed to cater to a broader section of the population, especially those in informal jobs or without regular retirement savings.
For Tax Benefits: NPS offers significant tax benefits under Section 80C and 80CCD, which may make it more attractive if you’re in a higher tax bracket.
For Lower-Income Individuals: UPS may be more beneficial due to its accessibility and potentially lower contribution requirements.
It’s important to assess your long-term goals, income, and risk tolerance before making a decision. If you need further clarification or help choosing the best scheme for you, feel free to reach out.
Best regards,
Nitin Narkhede
Founder & MD, Prosperity Lifestyle Hub https://Nitinnarkhede.com
Free Webinar https://bit.ly/PLH-Webinar

Ans: Firstly, it’s commendable that you already have a robust financial framework in place. Your systematic investments in equity mutual funds, comprehensive health and term insurance, and an emergency fund that covers six months of expenses indicate a well-thought-out financial strategy. These elements are crucial for financial stability, as they ensure you’re protected against unforeseen circumstances while continuing to grow your wealth.

In addition to your Rs. 7 lakhs of idle savings and Rs. 4.75 lakhs set aside for immediate needs, you also have an impressive Rs. 50,000 in monthly savings after all expenses and investments. This presents a strong base for further wealth creation, and managing these funds effectively will help you meet your short-term and long-term goals. Let’s explore how you can maximize the potential of your idle funds, taking into account both liquidity needs and long-term compounding.

Categorizing Funds: Long-Term and Short-Term Investments
Your decision to divide your investments into two categories—non-withdrawable mutual funds for long-term growth and withdrawable mutual funds for short-term liquidity—is a sound approach. This division allows you to meet both your immediate financial needs while simultaneously growing your wealth over the long term.

Long-Term Investment: Non-Withdrawal Funds (2-5 Years and Beyond)
For long-term compounding, equity mutual funds are an ideal vehicle. You’re already investing in these funds with a long-term perspective, which is excellent, as equity tends to outperform other asset classes like debt or fixed deposits over time.

Here’s how you can further optimize your long-term investment strategy:

Continue SIPs in Equity Mutual Funds: Regular investments through Systematic Investment Plans (SIPs) allow you to benefit from rupee cost averaging. This means you buy more units when markets are down and fewer units when markets are up, thus averaging your cost over time. Given that you already have SIPs in place, it’s advisable to continue with these contributions. Over the long term, equity markets tend to grow despite short-term volatility, and consistent investments will help you capitalize on this growth.

Lump Sum Allocation from Idle Funds: Since you have Rs. 7 lakhs sitting idle in your savings account, which is currently not earning much interest, it’s prudent to put a portion of this amount into equity mutual funds. You could allocate Rs. 4-5 lakhs of this sum towards equity mutual funds to boost your long-term growth. This will allow the funds to compound over time, helping you accumulate wealth more effectively.

Benefits of Actively Managed Funds Over Index Funds: While index funds track a specific index like the Nifty 50, they are often less flexible and cannot adjust to changing market conditions. On the other hand, actively managed funds, overseen by professional fund managers, have the ability to change their asset allocation based on market trends, thus potentially offering higher returns. Although index funds may have lower fees, they may not always outperform actively managed funds, especially in a volatile or uneven market.

Avoid Direct Funds for Better Portfolio Management: Direct mutual funds, although they come with a lower expense ratio, require constant tracking and decision-making. This can be cumbersome for someone who may not have the time or expertise to monitor the markets closely. Investing through a Mutual Fund Distributor (MFD) who has a Certified Financial Planner (CFP) credential will allow you to benefit from expert advice and portfolio management. A CFP can help optimize your portfolio by selecting the right mix of funds based on your risk tolerance, financial goals, and market conditions. Additionally, the long-term relationship with an MFD/CFP can ensure timely adjustments to your portfolio.

Short-Term Investment: Withdrawable Funds (2-5 Years)
For the portion of your savings that you may need within the next 2-5 years, you need safer and more liquid investment options. While equity mutual funds are great for long-term growth, they can be volatile in the short term, which makes them less suitable for funds you might need soon. Here’s how you can structure your short-term investments:

Hybrid Funds: These funds offer a balanced approach by investing in both equities and debt instruments. The equity portion provides the opportunity for growth, while the debt portion offers stability and reduces volatility. Hybrid funds are less risky than pure equity funds and provide a good option for investors looking to beat inflation while keeping the investment relatively safe.

Short-Term Debt Funds: Debt mutual funds invest in government securities, corporate bonds, and other fixed-income instruments. These funds are less volatile than equity mutual funds, making them ideal for short-term investments. By investing in debt funds with shorter maturity periods, you can achieve relatively higher returns than a savings account while ensuring that the risk is low. Debt funds can also provide liquidity, allowing you to withdraw your money when needed.

Liquid Funds: For funds that you need to access quickly, liquid mutual funds are a good option. These funds invest in short-term, low-risk instruments and offer better returns than a regular savings account. Importantly, liquid funds allow you to withdraw money with minimal hassle, often within 24 hours. Since you might need access to your savings for immediate or unexpected expenses, liquid funds are an ideal choice to park part of your Rs. 7 lakhs.

Avoid Index Funds for Short-Term Goals: Index funds, though popular for their simplicity and low costs, may not be suitable for short-term investments. They follow the market and cannot adapt quickly to changing economic conditions. If the market experiences a downturn during the period when you need your funds, you might be forced to withdraw at a loss. Therefore, for short-term investments, it’s better to focus on debt or hybrid funds that offer stability.

Strategic Allocation of Rs. 7 Lakhs
Given your financial goals and the possibility that you may need access to some of your savings within the next 2-5 years, here’s how you can strategically allocate your Rs. 7 lakhs:

Rs. 4-5 Lakhs for Long-Term Growth: Allocate a significant portion of your idle Rs. 7 lakhs into long-term equity mutual funds. This will allow you to take advantage of market compounding and generate wealth over time. Equity funds, despite short-term volatility, tend to offer the highest returns over periods of 5 years or more.

Rs. 2-3 Lakhs for Short-Term Flexibility: Park the remainder of your Rs. 7 lakhs into safer, more liquid investments such as hybrid or debt funds. These funds provide a good balance between safety and returns, allowing your money to grow while being accessible when needed. If you find that you don’t need these funds in 2-3 years, you can always move them into more aggressive investments later.

Managing the Rs. 4.75 Lakhs for Immediate Needs
You’ve wisely set aside Rs. 4.75 lakhs in another account for immediate needs. Since this money may be required at any time, it’s essential to keep it in a highly liquid and low-risk option.

Liquid Mutual Funds: As mentioned earlier, liquid funds are an excellent choice for immediate needs. They offer liquidity similar to a savings account but with the potential to earn higher returns. Liquid funds invest in short-term instruments and typically allow you to access your money within a day, making them ideal for emergency funds or immediate expenses.

High-Interest Savings Account: Alternatively, you can keep this money in a high-interest savings account. This option provides both safety and liquidity, though the returns may not beat inflation over the long term. However, since the primary goal for this Rs. 4.75 lakhs is to maintain accessibility, a high-interest savings account could be a good secondary option.

Utilizing Rs. 50,000 in Monthly Savings
Your ability to save Rs. 50,000 per month after all expenses and investments is a strong indicator of financial discipline. This surplus can be put to excellent use for both short-term flexibility and long-term wealth creation.

Increase Equity SIP Contributions: You could allocate a portion of your Rs. 50,000 monthly savings to increase your SIP contributions in equity mutual funds. This will allow you to compound your wealth even faster. Since equity markets can experience ups and downs, adding more to your SIPs during market downturns will help you purchase more units at a lower cost, thus improving long-term returns.

Allocate to Short-Term SIPs: You can also consider starting or increasing your SIPs in short-term hybrid or debt mutual funds. These funds provide stability and liquidity while offering better returns than traditional savings instruments. By allocating part of your monthly savings to these funds, you create a pool of investments that can be tapped into for medium-term goals or unexpected needs.

Final Insights
In conclusion, you are on the right track with your investments and financial planning. To enhance your financial portfolio and ensure both long-term growth and short-term liquidity, consider the following strategies:

Allocate Rs. 4-5 Lakhs from your idle Rs. 7 lakhs into long-term equity mutual funds for compounding benefits over the next 5 years and beyond. Equity mutual funds are ideal for wealth creation and will help you meet your future financial goals.

Invest Rs. 2-3 Lakhs in short-term debt or hybrid mutual funds. These funds offer a balance between safety and returns, ensuring your funds are accessible when needed while also beating inflation.

Keep the Rs. 4.75 lakhs set aside for immediate needs in liquid mutual funds. Liquid funds will give you quick access to your money, while also providing higher returns than a savings account.

Use your Rs. 50,000 in monthly savings to increase your SIP contributions. By boosting your long-term equity investments and adding to short-term hybrid or debt funds, you can ensure that your financial plan remains flexible while growing your wealth steadily.

By following these recommendations, you will not only optimize your current investments but also lay a strong foundation for future financial security. The balance between long-term growth and short-term flexibility is key to meeting your financial goals, and with consistent efforts, you will continue to strengthen your financial portfolio.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You may consider investing in Equity Savings mutual fund to match your expectations

You can do lumpsum for the idle money and SIP for the monthly saving

They are tax efficient because taxation is like an equity fund although they invest almost equal amount in equity, bonds and arbitrage

Relatively less riskier then the equity funds

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates

Ans: Yes

Ans: Hi,

After completing B.Pharm, there are relatively few opportunities compared to pursuing a postgraduate degree in pharmacy. I don't have an idea about your financial background, but if you are good at interacting with people, you can consider a career in marketing and sales, which offers many advantages.

The advantages of choosing marketing and sales include:
1. Good earning potential (more than INR 6.0 LPA)
2. After 3 years, you can pursue an MBA through distance education.
3. After 3 years, you can transition from field work to the product department (usually as a product executive), where you can guide the sales representatives.
4. After 5 years of experience in marketing, you can start your own third-party marketing company.

On the other hand, if you join another field, you may receive lower pay due to having only an undergraduate degree.

So, I strongly recommend considering a career in marketing and sales.

Ans: First the shares have to be transferred to your name and then you can sell the shares and pay tax
Yes tax has to be paid if any

Ans: For any rental income, it has to be considered under rent and not professional income