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Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 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
Chirosunder Question by Chirosunder on Apr 22, 2024Hindi
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Sir/Mam, another answer i wanna get from you that if I want to invest rs.7500 for 12 years for getting pension 20 thousand per month through sip with swp then May i get 20k per month pension through out my life making a sip? If you give me a suggestion that how can I get 20k per month throughout my life by investing rs.7500 per month for 12 years.

Ans: Investing Rs.7500 monthly with the goal of securing a lifelong pension of Rs.20,000 requires careful planning. Using SIP with SWP (Systematic Withdrawal Plan) can be a strategy, but longevity risk (outliving your savings) is a concern. To aim for a sustainable pension, consider a mix of growth-oriented and income-generating investments. However, achieving a consistent Rs.20,000 monthly payout from a Rs.7500 SIP in 12 years might be challenging. A more realistic approach might involve increasing your investment amount or extending the investment horizon.
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

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 07, 2024

Asked by Anonymous - May 01, 2024Hindi
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I want to invested rs.9000 per month for 15 years to get a pension 25 thousand monthly. Where should I invested to Achieve my goal? If I do sip through swp then which fund will be good for me for achieving my goal?
Ans: To achieve your goal of receiving a monthly pension of 25,000 rupees after 15 years with an SIP investment of 9,000 rupees per month, we'll need to select suitable funds that offer growth potential while managing risk. Here's a suggested approach:

Investment Strategy:
Given your goal of creating a pension income, we'll focus on funds with a balanced approach that offer both growth potential and stability.
Investing in a combination of equity and debt funds can help optimize returns while managing risk over the long term.
Fund Selection:
Consider allocating your SIP investment across a mix of equity funds for growth potential and debt funds for stability.
Opt for funds with a track record of consistent performance and a strong portfolio management team.
SIP Through SWP:
You can structure your investment as an SIP followed by a Systematic Withdrawal Plan (SWP) to generate a regular income stream post-retirement.
Choose funds that offer the option for SWP and have historically provided steady returns with relatively low volatility.
Fund Recommendations:
For equity exposure, consider diversified equity funds or balanced advantage funds that invest in a mix of large-cap, mid-cap, and small-cap stocks.
For debt exposure, opt for short to medium-term debt funds or hybrid funds with a significant allocation to debt securities.
Risk Management:
Given your investment horizon of 15 years, you can afford to take a moderate level of risk.
However, it's essential to periodically review your portfolio and adjust your asset allocation based on market conditions and your risk tolerance.
Professional Advice:
Consult with a financial advisor or Certified Financial Planner to tailor an investment strategy that aligns with your goals, risk profile, and investment horizon.
A professional can help you select suitable funds, monitor your portfolio's performance, and make adjustments as needed to stay on track towards achieving your pension income goal.
By investing systematically and prudently over the long term, you can work towards building a corpus that will generate the desired monthly pension income of 25,000 rupees after 15 years. Remember to stay disciplined in your investment approach and regularly review your portfolio to ensure it remains aligned with your financial goals.

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

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

Asked by Anonymous - Jul 13, 2024Hindi
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Hi I am 43 years old. I am regular investor in SIP. I invest 2lacs per month in SIP. My fund value will be approximately 6.5 cr in 5 years. If I would like to retire at after 5 years and need approximately 3 lacs per month as SWP for 25 years.. Can you please let me know how many years i can sustain with 6.5 cr.? or how much 6.5cr will grow if i dont withdraw lumpsum but only SWP of 3 lacs per month for 25 years.? Thank you.
Ans: Evaluating Your Retirement Plan
Let's evaluate your plan to ensure financial stability during your retirement.

Current Investments
SIP Investment: Rs. 2 lakhs per month
Expected Fund Value in 5 Years: Rs. 6.5 crores
Retirement Plan
Monthly SWP Needed: Rs. 3 lakhs
Retirement Duration: 25 years
Sustaining Rs. 6.5 Crores with SWP
Assuming an average annual return of 7% on your investments post-retirement, let's calculate how long your corpus will sustain with a monthly SWP of Rs. 3 lakhs.

Calculating SWP Sustainability
Starting Corpus: Rs. 6.5 crores
Monthly Withdrawal: Rs. 3 lakhs
Annual Return: 7%
Using these parameters, we can estimate the duration your corpus will last.

Growth of Rs. 6.5 Crores with SWP
Corpus at Start: Rs. 6.5 crores
Annual Withdrawal: Rs. 36 lakhs (Rs. 3 lakhs x 12 months)
Annual Return on Remaining Corpus: 7%
The remaining corpus will continue to earn returns even as you withdraw funds. Let's see how it grows.

Insights and Recommendations
Sustainability: With a 7% return, your corpus can sustain for approximately 25 years with the monthly SWP of Rs. 3 lakhs.
Growth: The corpus will not only sustain but also grow, depending on the actual rate of return.
Detailed Calculation
Starting Corpus: Rs. 6.5 crores
Annual Return: 7%
Monthly Withdrawal: Rs. 3 lakhs
Yearly Breakdown (First Few Years)
Year 1: Starting Corpus = Rs. 6.5 crores

Annual Return = Rs. 6.5 crores * 7% = Rs. 45.5 lakhs
Withdrawal = Rs. 36 lakhs
End Corpus = Rs. 6.5 crores + Rs. 45.5 lakhs - Rs. 36 lakhs = Rs. 6.595 crores
Year 2: Starting Corpus = Rs. 6.595 crores

Annual Return = Rs. 6.595 crores * 7% = Rs. 46.165 lakhs
Withdrawal = Rs. 36 lakhs
End Corpus = Rs. 6.595 crores + Rs. 46.165 lakhs - Rs. 36 lakhs = Rs. 6.69115 crores
This pattern continues, showing how the corpus grows despite withdrawals, assuming a stable return.

Final Insights
Sustainable Plan: Your current plan is sustainable if the investments yield around 7% annually.
Monitoring: Regularly review and adjust your investments to maintain the desired returns.
Diversification: Ensure your investments are well-diversified to manage risks.
This plan should provide you with financial stability during retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 14, 2024

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Hi Sir, Good morning. Hi I am 43 years old. I am regular investor in SIP. I invest 2lacs per month in SIP. My fund value will be approximately 6.5 cr in 5 years. If I would like to retire at after 5 years and need approximately 3 lacs per month as SWP for 25 years.. Can you please let me know how many years i can sustain with 6.5 cr.? or how much 6.5cr will grow if i dont withdraw lumpsum but only SWP of 3 lacs per month for 25 years.? Thank you.
Ans: Based on your follow-up question, here's a concise analysis:

Future Value of SIP Investment:

If you invest Rs. 2 lakhs per month for the next 5 years and expect your corpus to grow to approximately Rs. 6.5 crores, this assumes an estimated annual return rate of about 12-15%.
Systematic Withdrawal Plan (SWP):

You plan to withdraw Rs. 3 lakhs per month (which is Rs. 36 lakhs annually) for 25 years.
Sustainability Analysis:

Assuming an average annual return of 8% on your remaining corpus during the withdrawal phase:
After 25 years of withdrawing Rs. 3 lakhs per month, your corpus should ideally grow, considering that the returns may balance the withdrawals.
Using a financial calculator or retirement corpus calculator:

Initial Corpus: Rs. 6.5 crores
Monthly SWP: Rs. 3 lakhs (Rs. 36 lakhs annually)
Return Rate During Withdrawal: 8%
With the above parameters:

Your corpus of Rs. 6.5 crores can sustain the Rs. 3 lakhs monthly withdrawal for approximately 25 years while maintaining a positive balance due to the 8% return rate.
However, if the returns fluctuate or are lower, the sustainability period might reduce. It's always good to reassess periodically and adjust your withdrawals and investments accordingly.

Please consult a certified financial planner for customised plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 04, 2024

Asked by Anonymous - Nov 04, 2024Hindi
Money
Hi I am 44 years old and have 5 cr in FD,s , 1.5 cr in MF with over 1 lac monthly SIP investing in flexi cap , balanced fund , large caps, mid cap and small cap funds with an investment horizon of 10 years. Have 20 lacs in stocks , investing 7 lacs annually in annuity plan HDFC sanchay, and around 4 lacs in various insurance policies for tax free(ICICI and sriram) returns. Also I have started a sip(2k each ) for my 2 kids aged 5 and 12 in mid cap funds ..looking to increase this every year time horizon 30 years .. I would like to retire now and am looking at a swp of atleast 3-4 lacs per month after 6 years from my MF's. And annuity returns . Till that time my FD,s will also mature.. Would it be possible to earn 4 lacs through swp after 6 years...and I would like to build a corpus of around 30 cr after 15 years.. please suggest if I am on the right track.. Would it be possible to generate
Ans: Your current investments reflect thoughtful planning with multiple assets like mutual funds, FDs, annuities, and insurance. You are aiming for a substantial retirement corpus of Rs 30 crores and plan to generate a monthly income of Rs 3-4 lakhs through SWP in six years. Let's evaluate if you’re on track and explore recommendations to enhance your strategy.

1. Evaluating Your Mutual Fund Investments for SWP Needs
Your current SIPs are in flexi-cap, balanced, large-cap, mid-cap, and small-cap funds, which align well with your growth and SWP goals. Here’s how these investments can work towards achieving your objectives:

High-Return Potential in Equity Funds: Over 10 years, your equity-oriented funds (large-cap, mid-cap, small-cap) can provide growth, supporting your monthly withdrawal goals.

Balanced Funds for Stability: Balanced funds add stability to your portfolio, reducing market volatility's impact on withdrawals.

Flexi-Cap Diversification: Flexi-cap funds enhance flexibility, adjusting across large, mid, and small-cap stocks as per market conditions.

2. Systematic Withdrawal Plan (SWP) for Regular Monthly Income
Generating a SWP of Rs 3-4 lakhs after six years is achievable with a focused approach. Here’s a breakdown:

Establish a SWP Strategy: With a strong equity base, an SWP from your mutual funds can generate a monthly income. Reinvesting dividends or interest could further enhance your returns.

Aligning Fund Selection with SWP: Large-cap and balanced funds can be core SWP assets, as they are less volatile and provide stable growth.

Plan for Market Fluctuations: Market fluctuations could impact SWP withdrawals. You may consider moving a portion to debt funds closer to retirement for stability.

3. Increasing Your Kids' SIPs with Long-Term Vision
For your children, a 30-year horizon in mid-cap funds is promising. Increasing their SIPs regularly will amplify the impact of compounding:

Annual SIP Increase: Aim to raise the SIP amount yearly. Gradual increases, even by a few thousand rupees, can yield significant growth over 30 years.

Mid-Cap Growth Potential: Mid-cap funds can provide substantial returns over the long term. Diversifying with large-cap or flexi-cap funds could add stability.

Reinvestment in Tax-Efficient Funds: As your children reach different financial milestones, you can gradually move to tax-efficient funds or low-risk options for stability.

4. Reassessing Fixed Deposits and Annuities for Wealth Maximisation
Currently, a significant portion of your investments is in FDs and an annuity plan. Let’s evaluate the pros and cons of these investments:

Fixed Deposits for Short-Term Stability: FDs are stable but offer limited returns compared to mutual funds. Upon maturity, consider reinvesting in a mix of equity and debt mutual funds for higher growth potential.

Annuity Limitations: Annuity plans provide steady income but typically have lower returns. Since annuity returns are fixed, they may not keep up with inflation over the long term.

Shifting Focus to Equity Mutual Funds: Reinvesting your FD maturity and annuity corpus into mutual funds could help you achieve your Rs 30 crore target faster.

5. Optimising Insurance Plans for Better Returns
Your insurance plans provide tax-free returns, but it’s essential to assess whether they align with your overall goals. Here’s a perspective on your ICICI and Shriram policies:

Limited Growth in Traditional Insurance: Traditional insurance offers tax-free returns but often has limited growth potential.

Consider Surrendering for Higher Growth: If these policies underperform compared to mutual funds, you may consider surrendering them. Reinvesting in mutual funds could yield higher long-term returns.

Insurance for Protection, Not Investment: Moving towards term insurance for coverage and mutual funds for investment may be a more effective approach.

6. Building a Rs 30 Crore Corpus Over the Next 15 Years
Achieving a Rs 30 crore corpus in 15 years will require a strategic blend of high-growth investments. Here’s a suggested approach:

Focus on Equity Funds for Growth: Equity funds, especially mid and small-cap, can accelerate your portfolio growth. Increasing SIPs over time will enhance your corpus.

Reinvest Maturity Proceeds: As your FDs mature, reinvest them into equity and balanced mutual funds to benefit from compounding.

Balance with Debt Funds in Later Years: As you near your goal, gradually move funds to debt mutual funds. This will reduce risk and protect the corpus for withdrawal.

7. Disadvantages of Index Funds and Direct Plans
Although index funds and direct funds are popular, there are better options for your high-growth goals:

Index Funds’ Growth Limitation: Index funds simply track the market and don’t aim for higher returns. Actively managed funds, on the other hand, can outpace the market.

Direct Plans Lack Professional Guidance: With direct plans, there’s no personalised guidance. Investing through a Certified Financial Planner ensures regular monitoring and timely adjustments.

8. Tax Considerations on Mutual Fund Withdrawals
Tax-efficient planning is essential for maximising SWP returns:

Equity Fund Taxation: For equity mutual funds, LTCG over Rs 1.25 lakh is taxed at 12.5%. STCG is taxed at 20%. Plan withdrawals to stay within these limits for minimal tax impact.

Debt Fund Taxation: Debt mutual funds are taxed according to your tax slab. Using a mix of debt and equity can balance returns with lower taxes.

Final Insights
Your diversified portfolio places you on a solid path to a secure retirement and wealth creation. Increasing SIPs for your kids, reinvesting maturing FDs, and focusing on mutual funds over insurance and annuities will strengthen your approach. Working closely with a Certified Financial Planner will keep your investments aligned with your Rs 30 crore goal, ensuring a steady retirement income and lasting legacy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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Nayagam P

Nayagam P P  |3918 Answers  |Ask -

Career Counsellor - Answered on Nov 24, 2024

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Sir i am currently in class 11 th and i just want to prepare for jee mains and advanced 2026 exam so give me some roadmap to achieve and also guide me for computer science
Ans: Shreya, I trust that you have already enrolled in a coaching center, whether it be online or in person, and have finished your eleventh syllabus. (1) If you have not yet created your own short-notes for the 11th syllabus that has been completed, prepare it and continue to revise them every three days until 2026, even after you have commenced studying the 12th syllabus in December 2024. (2) Review the questions that you have incorrectly answered or skipped in mock tests conducted by your Coaching Center and/or practiced independently. (3) In order to increase your rank/percentile by targeting computer science at a reputable college/institute, prioritize mathematics (although all three subjects are equally important). (4) You should be thorough with NCERT books, particularly those pertaining to chemistry, in conjunction with the materials provided by your coaching institute. (5) Have 1-2 reference books for each subject. Not exceeding two. (6) Review the questions that were incorrectly answered or skipped in your mock and practice exams and retake the test. It is advisable to maintain a distinct note-book for these types of questions, which should include answers and elucidating notes, in order to review them repeatedly for all three subjects. (7) Download the SYLLABUS of JEE Main 2025 (available on Google by searching for "JEE Main Information Bulletin") and print it out, as there will be no significant changes to the syllabus in 2026. Maintain it on your study table and continue to update the 11th syllabus chapters and concepts that you have covered to date by marking them with a checkmark. This will boost your confidence if you continue to update the same till November 2025. (8) A slight difference in Syllabus might be visible when you acquire the 2026 JEE Main / JEE Advanced Syllabus. The same can be resolved within 15 days to one month in 2025-26. (9) Increase your productivity by studying for 45 minutes to 1 hour, taking a 10-minute break, and then continuing for 45 minutes. (10) Take a 2-3 minute break every 45 minutes while practicing questions, whether offline or online. This break should consist of closing your eyes and taking long breaths to enhance your concentration and mental capacity. (11) Additionally, it is recommended that you acquire the 20-40 PREVIOUS years question paper book of JEE (Main & Advanced) from Amazon. Arihant's, Disha's, or MTG's publications are recommended. Once you have finished reading a chapter, practice and complete it to determine the extent to which you have comprehended the concepts and to identify areas that require improvement. (12) By October 2025, ensure that you have reviewed significantly more than 90% of the previous years questions. Your confidence will be further bolstered by this. (13) After the mock test is completed at your coaching center, clarify all incorrectly answered or ignored questions and continue to revise and practice them, as these types of questions will significantly disrupt your performance in the actual JEE. (14) If you are a regular school student, inquire with your class teacher about the minimum attendance requirement as outlined in the Board's regulations (State, CBSE, ICSE, etc.). Utilize the remaining 15% by taking time off and preparing for your JEE, if only 85% attendance is required. (15) THE MOST IMPORTANT Value Added Suggestion: Rather than solely relying on JEE, please participate in 5-7 entrance exams/counseling process with a JEE score for getting admission into any one of the private engineering colleges to have a variety of options to select the most suitable one. All the BEST for Your Prosperous Future.

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T S Khurana

T S Khurana   |197 Answers  |Ask -

Tax Expert - Answered on Nov 23, 2024

Asked by Anonymous - May 11, 2024Hindi
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Can you please suggest on capital gains as per Indian taxation laws arising in the below two queries : 1) property purchased with joint ownership, me and my wife’s name in 2015 at a cost of 64,80,000, housing improvements done for the cost of 1000000 and brokerages of 200000 paid and sold the same property at 10000000 in Dec 2023? 2) 87% of the proceeds got from the deal i.e 8700000, have been reinvested to pay 25% amount in purchasing another joint ownership property in Dec 2023, 3) I have invested in another under construction property in Nov 2023 by taking housing loan, which is on me and my wife’s name worth 1.4 cr, here the primary applicant is me only while wife is just made a Co applicant in the builder buyer agreement and also on the housing loan . So what are the LTCG tax liabilities arising from the above 3 scenarios for FY 2023-2024 and FY 2024-2025. I intend to sale off the property acquired in (2) by Dec 2024 and use that proceeds to close the housing loan for the property acquired in (3), will this sale of property be inviting any tax liabilities if the complete proceeds received from the sale of the property in (2) would be utilised to close the housing loan taken in Nov 2023 for the property in (3) ? Since in FY 23-24, I would be claiming the LTCG from the sale proceeds of 1) invested in the purchase of property in 2), and I intend to sale off this property in Dec 2024, will the LTCG claim be forfeited on the property sale in (1), should I hold this property at least for further 1 year so that sale of this property in 2) will not invite STCG?
Ans: (A). Let's first talk about F/Y 2023-24 :
You jointly sold a Property during the year for Rs.76.80 lakhs (64.80+10.00+2.00), & sold the same for Rs.100.00 lakhs.
You have jointly also purchased Property No.3 (I suppose it is Residential only), for Rs.140.00 lakhs.
You should avail exemption u/s-54 & file your ITR accordingly. Please disclose all details about sale & purchase in your ITR.
02. Now coming to the F/Y 2024-25 :
You intend to Sell Property No.2, which was acquired in 2023-24. Any Gain on Sale of it would be Short Term capital Gains & taxed accordingly.
Alternatively, you may hold this sale of property no.2 (for 2 years from its purchase) & avoid STCG
You are free to utilize the sale proceeds in a way you like, including paying off your housing Loan.
Please note to avail exemption u/s 54 only from investment in property no.3 & not 2.
Most welcome for any further clarifications. Thanks.

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