My business income from profession till FY2021-22 was less than 50 lakh and I was availing the provision of presumptive income. During Fy 2022-23 it will be 53 lakh hence I am required to submit audited books of account. Now from the FY 2023-24, this limit for the presumptive income is raised from 50 l to 75 lakh. My business income during 23-24 is likely to be in the range of 54 lakh. I want to know whether I can shift to presumptive income in 23-24, even when I had submitted audited books of account during 22.23.

Ans: At 29, you're demonstrating a proactive approach towards securing your financial future, which is commendable. Your investments in mutual funds, stocks, Sovereign Gold Bonds (SGBs), and Public Provident Fund (PPF) reflect a diversified portfolio aimed at wealth accumulation.

Investing in mutual funds and the stock market can offer substantial growth potential over the long term, especially when approached with a disciplined strategy and a focus on quality investments. Your current portfolio values of approximately 34 lakh in mutual funds and 11 lakh in stocks indicate a significant commitment to building wealth through equities.

Sovereign Gold Bonds (SGBs) offer a unique avenue for investing in gold, providing the dual benefits of capital appreciation and fixed interest income. Your strategy of actively investing in SGBs, averaging around 10 units per issue, aligns with a long-term wealth accumulation plan.

Additionally, initiating PPF investments this year adds a layer of stability to your portfolio. PPF offers attractive tax benefits and a guaranteed rate of return, making it a suitable option for retirement planning.

However, retiring by the age of 45 and aiming for a monthly expense of 3 lakh rupees necessitates a thorough evaluation of your financial plan. While your current investments show promise, achieving your retirement goal will require careful planning and possibly adjusting your investment strategy.

As a Certified Financial Planner, I recommend the following steps:

Conduct a comprehensive financial assessment to determine your current financial position, retirement goals, and risk tolerance.
Develop a detailed retirement plan, considering factors such as inflation, lifestyle expenses, and investment returns.
Evaluate the adequacy of your current savings and investment strategy in meeting your retirement income needs.
Explore options for increasing your savings rate and optimizing your investment portfolio to maximize returns while managing risk.
Continuously monitor and adjust your financial plan as needed to stay on track towards achieving your retirement goals.
In summary, while you've made significant strides in building your investment portfolio, retiring by the age of 45 and generating a monthly income of 3 lakh rupees will require careful planning and disciplined execution. By working with a Certified Financial Planner and regularly reviewing your financial plan, you can increase the likelihood of achieving your retirement goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Delaying your house buying plan to accumulate a substantial down payment through SIPs can be a prudent strategy, provided it aligns with your long-term financial goals. By investing dedicatedly in SIPs over the next five years, you'll have the opportunity to build a sizable corpus, potentially easing the financial burden of purchasing a house in the future.

However, it's essential to consider several factors before proceeding. Firstly, ensure that your investment in SIPs is diversified across different asset classes to mitigate risks. While SIPs offer the potential for growth, they are subject to market fluctuations, and a diversified portfolio can help cushion the impact of market volatility.

Secondly, keep in mind the impact of inflation and the rising cost of housing. While delaying your purchase may allow you to accumulate a larger down payment, it's essential to factor in the appreciation in house prices over time. Regularly reassess your financial plan to ensure it remains aligned with your housing goals and the prevailing market conditions.

Regarding tax implications on SIP withdrawals, consult with a tax advisor to explore strategies for minimizing tax liability. Utilize tax-efficient investment avenues such as Equity Linked Savings Schemes (ELSS) or Tax-Saving Mutual Funds, which offer tax benefits under Section 80C of the Income Tax Act.

Additionally, consider the tax implications of long-term capital gains on your SIP investments. Holding your investments for the long term can qualify for favorable tax treatment, but it's crucial to understand the applicable tax rates and exemptions.

In summary, delaying your house buying plan to invest in SIPs can be a viable strategy, provided you carefully consider market dynamics, diversify your investments, and plan for tax efficiency. Consult with a Certified Financial Planner to develop a comprehensive financial plan tailored to your specific needs and goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's commendable that you've initiated SIPs (Systematic Investment Plans) to grow your wealth. However, life can be unpredictable, and circumstances may change, affecting your ability to continue these investments.

If you're unable to continue your SIPs after a certain period, it's essential to understand the implications. Firstly, discontinuing your SIPs prematurely can impact the potential growth of your investments. The longer you stay invested, the greater the power of compounding, which can significantly boost your returns over time.

Secondly, abruptly stopping your SIPs may lead to missed opportunities. Market timing is notoriously difficult, and exiting your investments at an inopportune moment could result in lost potential returns, especially if you're invested in mid-cap and small-cap funds, which tend to be more volatile.

Moreover, redeeming your investments prematurely might subject you to exit loads or penalties, further eroding your returns.

As a Certified Financial Planner, I would advise you to assess your financial situation carefully and explore alternatives before discontinuing your SIPs. Consider options like reducing the SIP amount temporarily, switching to a lower-cost plan, or pausing the SIPs if feasible, rather than stopping them altogether.

It's also crucial to have an emergency fund in place to handle unexpected financial challenges without resorting to withdrawing your investments prematurely.

Ultimately, every financial decision comes with its own set of consequences, and it's essential to weigh the pros and cons carefully before taking any action.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: I understand you're concerned about Reliance General settling claims properly. It's good to be aware! Here's how we can approach this:

Claim Settlement Ratio (CSR) Check: Every insurance company has a CSR, a public record showing the percentage of claims they settle. You can check Reliance General's CSR online to see their historical performance.

Policy Review: Review your policy documents carefully. Understand the terms and exclusions related to claim settlements. If something seems unclear, reach out to Reliance General for clarification.

Network Hospitals: Using network hospitals within your policy can streamline the claim settlement process.

Remember, a single experience doesn't represent the entire picture. However, your concern is valid. Let's not worry, we can assess further!

You did well porting your policy! Health insurance is crucial, and you've taken a great step for your family.

Moving forward: If you'd like a more in-depth analysis of your health insurance options, consider consulting a Certified Financial Planner (CFP). They can assess your specific needs and recommend the best plan based on your family's requirements.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Investing is a wise move for securing your financial future. With your disciplined approach, you're already on the right track. By putting aside 3000, 3000, and 4000 rupees monthly into diversified mutual funds, you're laying a solid foundation for wealth creation.

Mutual funds offer the potential for growth over the long term. Your mix of large-cap, mid-cap, and small-cap funds indicates a balanced strategy, tapping into different segments of the market for optimal returns.

However, predicting an exact amount after 10 years is tricky due to market fluctuations. Mutual fund returns are subject to market risks. While aiming for 1 crore is ambitious, it's essential to temper expectations with realism.

Your investment journey is akin to a marathon, not a sprint. Consistency and patience are key. Regular monitoring of your investments and adjusting your strategy as needed will be crucial to stay on course.

As a Certified Financial Planner, I'd advise you to focus not just on the final number but also on the journey itself. Celebrate milestones along the way and stay committed to your financial goals. Remember, financial planning is not just about numbers; it's about securing your dreams and aspirations for the future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's impressive to see your proactive approach to financial planning at 31! With a diversified investment portfolio and a clear retirement goal, you're on the right track to achieve financial independence by the age of 45. Here are some suggestions to help you reach your retirement target:

Assess Retirement Needs: Start by estimating your retirement expenses to determine how much you'll need to generate 1L per month in passive income. Consider factors such as inflation, healthcare costs, and lifestyle preferences.

Review Investment Portfolio: Regularly review your investment portfolio to ensure it remains aligned with your retirement goals and risk tolerance. Consider rebalancing if necessary to maintain the desired asset allocation.

Maximize Contributions: Continue maximizing your SIP contributions to build wealth over time. Consider increasing your monthly SIP amounts as your income grows to accelerate wealth accumulation.

Utilize Tax-Efficient Investments: Explore tax-efficient investment options such as ELSS, PPF, and NPS to minimize tax liability and maximize returns. Take advantage of tax-saving opportunities to optimize your investment strategy.

Diversify Income Streams: Look for opportunities to diversify your sources of income beyond investments. Consider generating passive income through rental properties, royalties, or online businesses to supplement your investment earnings.

Monitor Foreign and Indian Stocks: Keep a close eye on your foreign and Indian stock holdings to capitalize on growth opportunities and mitigate risks. Consider rebalancing your stock portfolio periodically to manage volatility and optimize returns.

Plan for Healthcare Costs: Factor in healthcare expenses when planning for retirement. Consider purchasing health insurance coverage to protect against unexpected medical costs and ensure peace of mind during retirement.

Seek Professional Guidance: Consider consulting with a Certified Financial Planner (CFP) who can provide personalized advice and help you develop a comprehensive retirement plan tailored to your specific goals and circumstances.

With a disciplined approach to savings, strategic investments, and prudent financial planning, you can work towards achieving your retirement goal of generating 1L per month in passive income by the age of 45.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: I can't tell you definitively how much you'll get per month after 60 with NPS, but I can help you estimate. Here's why:

NPS payout depends on multiple factors: The amount you receive depends on the corpus accumulated at retirement, the annuity plan you choose, and prevailing interest rates at that time.

Annuity plan is mandatory: Upon retirement, at least 40% of your NPS corpus must be used to purchase an annuity plan, which provides a fixed monthly pension.

Here's what you can do to estimate:

Use an NPS calculator: Several online NPS calculators can help estimate your monthly pension based on your investment amount, investment horizon (years till retirement), and expected returns.

Assumptions for estimation: Assuming a 10% annual return, investing Rs.20,000 per month for 11 years (till 60), and a 6% return on the annuity, an online calculator might give you a rough estimate of your monthly pension.

Remember: This is just an estimate. Actual returns and annuity rates may vary. It's best to consult a financial advisor for a personalized assessment based on your specific goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's admirable that you're setting a goal to save for a house within a relatively short timeframe of two years. Let's explore a strategic approach to help you achieve your target of accumulating 50 to 75 lakhs:

Establish a Budget: Begin by assessing your current financial situation and creating a realistic budget. Identify areas where you can reduce expenses and allocate more towards your savings goal.

Set Clear Savings Targets: Determine the specific amount you need to save each month to reach your target within two years. Having a clear savings target will help you stay focused and motivated.

Explore High-Return Investments: Given your short investment horizon, focus on investments that offer the potential for higher returns while managing risk. Consider a mix of equity and debt investments to balance growth potential with stability.

Avoid High-Risk Options: While high-risk investments may offer the potential for higher returns, they also come with increased volatility and uncertainty. Avoid speculative investments that could jeopardize your savings goal.

Regular Monitoring and Adjustment: Continuously monitor the performance of your investments and make adjustments as needed to stay on track towards your savings target. Rebalance your portfolio periodically to maintain the desired asset allocation.

Consider Tax-Efficient Options: Explore tax-efficient investment options such as Equity Linked Savings Schemes (ELSS) or tax-saving fixed deposits to minimize tax liability and maximize returns.

Seek Professional Guidance: Consider consulting with a Certified Financial Planner (CFP) who can provide personalized advice tailored to your financial goals and risk tolerance. A CFP can help you develop a customized investment strategy aligned with your savings target.

With careful planning, disciplined savings, and strategic investments, you can work towards achieving your goal of saving for a house within the next two years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Congratulations on building such a substantial net worth at 36! Your financial discipline and strategic investments have put you in a strong position for the future. Let's assess whether you can retire comfortably in a tier 2 city with your current assets:

With a net worth of 4.2 crores, including investments, real estate, and other assets, you have accumulated a significant amount for retirement.

Your monthly expenses of 60K are relatively modest compared to your net worth and monthly income of 1.8L, which is a positive sign for retirement planning.

The absence of any outstanding loans, coupled with life and health insurance coverage, provides financial stability and security for you and your spouse.

Retirement readiness depends on various factors, including your desired lifestyle in retirement, inflation, healthcare costs, and potential unforeseen expenses.

Given your substantial net worth and relatively low monthly expenses, you may have the option to retire comfortably in a tier 2 city, especially if you continue to manage your finances prudently.

However, it's essential to consider factors such as inflation, healthcare expenses, and potential market fluctuations that could impact your retirement corpus over time.

As a Certified Financial Planner, I recommend conducting a detailed retirement projection analysis to assess whether your current assets are sufficient to sustain your desired lifestyle throughout retirement.

Additionally, continue to monitor and adjust your investment portfolio as needed to ensure it remains aligned with your financial goals and risk tolerance.

Remember, retirement is not just about financial readiness but also about emotional and psychological preparedness. Ensure you have meaningful activities and pursuits planned for your retired life.

With careful planning and ongoing financial management, you can look forward to a comfortable and fulfilling retirement in your tier 2 city.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in