Apart from SCSS, PO MIS what other options are there for quarterly/mothly income ?

Ans: If we calculate using a few assumptions, like post-retirement life of 25 years; average inflation of 6% pa during that period, and portfolio returns of about 8% (assuming a judicious mix of equity and debt with a higher allocation to the latter), then you need to have a corpus of about Rs 4.8 Cr. This is to ensure that starting at Rs 2 lakh monthly (after 15 years), your monthly income from there on increases by at least 6% assumed inflation. And starting from zero, you need to invest about Rs 1.1 lakh per month assuming equity:debt 50:50 and this monthly investment amount should increase by at least 5% every year.

To reach this target corpus, you have a sufficiently long runway of 15 years. So you should be willing to invest a major chunk in equities via equity funds if your risk appetite allows for it. You may also have some of the existing assets, which too can be earmarked towards this retirement corpus.

As mentioned, for equity allocation, choose diversified equity funds categories like passive largecap funds, flexicap funds, and large&midcap funds (and if you have a sufficiently high-risk appetite, then mid-and-small cap funds as well). For debt, your EPF+VPF alongwith PPF should be sufficient.

When the time comes for retirement (in 15 years), you may have to divide your portfolio into 2 buckets. One to take care of income needs (via SCSS, debt funds, PPF withdrawals, bonds, etc.) and the other for growth (via equity funds and ETFs)

Ans: Dear Prasanta,
As you are into PSU, yours job contract won't allow you to take up another job officially.
You can look for private tuitions and coaching centers to have some additional income.
Your wife can also take up such assignments if she is qualified to do so.

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.

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.

Ans: As you approach retirement, ensuring a steady stream of income becomes paramount to maintain financial stability and enjoy a comfortable lifestyle. Let's explore some avenues tailored to your needs:

1. Pension Plans: If you're eligible for a pension from your employer or government, it can serve as a reliable source of regular income in retirement. Evaluate the pension options available to you and understand the payout terms.

2. Annuities: Consider purchasing an annuity from a reputable insurance company. An annuity provides regular payments over a specified period or for life, offering a predictable income stream during retirement.

3. Fixed Deposits (FDs): Invest a portion of your retirement corpus in fixed deposits. FDs offer a guaranteed return at fixed interest rates, providing a steady income stream. Opt for cumulative or non-cumulative FDs based on your income requirements.

4. Senior Citizen Savings Scheme (SCSS): SCSS is specifically designed for individuals aged 60 and above, offering attractive interest rates and quarterly payouts. It provides a safe investment avenue with assured returns.

5. Dividend-Paying Stocks: Invest in dividend-paying stocks of established companies. Dividends can provide a regular source of income while offering the potential for capital appreciation over the long term. However, ensure a diversified portfolio to mitigate risks.

6. Systematic Withdrawal Plans (SWPs): If you have investments in mutual funds, consider setting up SWPs. SWPs allow you to withdraw a predetermined amount at regular intervals, providing a systematic income stream while keeping your investments intact.

7. Rental Income: If you own property, consider renting it out to generate rental income. Rental properties can provide a steady source of cash flow, supplementing your retirement income. However, be mindful of maintenance costs and tenant management.

8. Reverse Mortgage: If you own a home, explore the option of a reverse mortgage. A reverse mortgage allows you to borrow against the equity of your home while retaining ownership. It provides a regular income stream without the need to sell your property.

9. Freelancing or Consulting: Leverage your skills and expertise to take up freelancing gigs or consulting assignments. Part-time work can supplement your retirement income while keeping you engaged and productive.

10. Government Schemes: Explore government schemes targeted at senior citizens, such as the Pradhan Mantri Vaya Vandana Yojana (PMVVY). These schemes offer guaranteed returns and regular payouts, providing financial security in retirement.

Final Thoughts

As you transition into retirement, diversifying your income sources can help mitigate risks and ensure financial stability. Consider consulting with a Certified Financial Planner to tailor a retirement income plan aligned with your goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in