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Ramalingam

Ramalingam Kalirajan  |9924 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 01, 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
Charuhas Question by Charuhas on Apr 06, 2024Hindi
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Sir, Apart from SCSS, PO MIS and MF SWP what other options are available for monthly/quareterly income ? I am 53 and looking for VRS in another 2 years.

Ans: Here are some options to consider for regular monthly/quarterly income after retirement, besides SCSS, PO MIS, and MF SWP (Systematic Withdrawal Plan):

Annuity Plans: These insurance products offer you a guaranteed income stream for life (or a chosen term) in exchange for a lump sum investment. They provide stability but may offer lower returns compared to some other options.

Senior Citizen Savings Scheme (SCSSM): This government scheme offers higher interest rates than regular fixed deposits specifically for retirees above 60. However, there's a lock-in period and a maximum investment limit.

Rental Income: Consider investing in rental properties that can generate a steady monthly income. However, this involves property management responsibilities and potential vacancies.

Dividend Stocks: Invest in companies with a history of paying regular dividends. This can provide a regular income stream, but dividends are not guaranteed and can fluctuate.

Bonds: Bonds, especially government bonds, offer regular interest payments. However, their returns might be lower compared to stocks.

Remember:

Talk to a Financial Advisor: A financial advisor can assess your risk tolerance, retirement goals, and income needs to recommend the best options for you.
Diversification is Key: Don't rely on a single source of income. Consider a mix of options to balance risk and reward.
Plan for Inflation: Factor in inflation to ensure your income stream keeps pace with rising living costs.
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  |9924 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 06, 2024

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Apart from SCSS, PO MIS what other options are there for quarterly/mothly income ?
Ans: Apart from Senior Citizen Savings Scheme (SCSS) and Post Office Monthly Income Scheme (PO MIS), another option for generating regular monthly or quarterly income is through Systematic Withdrawal Plans (SWP) offered by mutual funds. SWP allows investors to withdraw a fixed amount or a specified percentage of their investment at regular intervals, providing a steady stream of income while keeping the principal investment intact.

Here are some key features of SWP:

Flexibility: SWP offers flexibility in choosing the frequency and amount of withdrawals according to your income needs. You can opt for monthly, quarterly, or semi-annual withdrawals based on your requirements.
Capital Preservation: SWP allows you to maintain the original investment amount while generating regular income, making it suitable for retirees or individuals seeking income without eroding their principal.
Tax Efficiency: Depending on the type of mutual fund and the holding period, the income generated through SWP may be taxed at a lower rate compared to interest income from fixed-income investments like SCSS or PO MIS. Long-term capital gains tax may apply for equity-oriented funds held for more than one year, which could result in tax savings.
Diversification: SWP provides access to a wide range of mutual funds, including equity, debt, and hybrid funds, allowing investors to diversify their income sources and potentially enhance returns.
Professional Management: Mutual funds are managed by experienced fund managers who actively monitor and adjust the investment portfolio based on market conditions, aiming to maximize returns while managing risk.
Before opting for SWP, it's essential to consider factors such as the investment objective, risk tolerance, investment horizon, and tax implications. Consulting with a Certified Financial Planner (CFP) can help you evaluate whether SWP is suitable for your financial goals and design a customized income strategy tailored to your needs.

In summary, SWP offers an alternative avenue for generating regular income alongside traditional options like SCSS and PO MIS, providing flexibility, capital preservation, tax efficiency, diversification, and professional management.

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Ramalingam

Ramalingam Kalirajan  |9924 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 13, 2024

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Ramalingam

Ramalingam Kalirajan  |9924 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 15, 2024

Asked by Anonymous - Apr 13, 2024Hindi
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Hello sir can you suggest good option in swp to generate monthly income of 50k atleast in 15 years from now via sip
Ans: o generate a monthly income of 50k in 15 years through SWP (Systematic Withdrawal Plan), you'll need to build a sizable corpus. Here's a suggested approach:

Investment Strategy:

Start a SIP (Systematic Investment Plan) in equity mutual funds with a moderate to high-risk profile to build your corpus over 15 years.
As you near your goal, gradually shift a portion of your investments to debt funds or balanced funds to reduce volatility.
Corpus Calculation:

Using an average annual return of 10% (considering the market's historical average), you would need a corpus of approximately 1.6 crores to generate 50k per month through SWP.
SWP Selection:

Opt for SWP from balanced funds, debt funds, or a mix of both based on your risk appetite.
Ensure the SWP amount is not more than the fund's average returns to avoid depleting your corpus.
Tax Implications:

Remember that SWP from equity funds held for less than 3 years attracts short-term capital gains tax. Funds held for more than 3 years are taxed at 10% without indexation.
SWP from debt funds held for less than 3 years is added to your income and taxed as per your income tax slab. After 3 years, it's taxed at 20% with indexation.
Regular Monitoring:

Periodically review your SWP strategy and make adjustments based on market conditions, fund performance, and your financial needs.
Emergency Fund:

Maintain a separate emergency fund to cover 6-12 months of expenses to avoid premature withdrawals from your investment.
Remember, the above strategy is a general guideline. It's crucial to consult with a financial advisor to tailor the plan according to your financial situation, goals, and risk tolerance.

..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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