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48-year-old Avneesh with Rs.1 Cr+ savings seeks retirement plan for Rs.60,000-70,000 monthly income

Ramalingam

Ramalingam Kalirajan  |6903 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 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
Asked by Anonymous - Jul 24, 2024Hindi
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Hello I am Avneesh, My age is 48 years, I am single and my monthly income is approx. 1.5 lakh, I have no loan and any liability. I have 31 lakh in Shares , approx 30 lakh in PPF, 10 lakh in mutual fund , approx 29 lakh in saving. I want to retire in next 2 years . what will my financial plan for retirement income of 60,0000 to 70,000 per month

Ans: You are 48 years old and plan to retire in 2 years.

You are single with no loans or liabilities.

Your monthly income is approximately Rs 1.5 lakh.

You have Rs 31 lakh in shares, approximately Rs 30 lakh in PPF, Rs 10 lakh in mutual funds, and approximately Rs 29 lakh in savings.

Your goal is to have a monthly retirement income of Rs 60,000 to Rs 70,000.

Current Financial Assets

Shares: Rs 31 lakh

PPF: Rs 30 lakh

Mutual Funds: Rs 10 lakh

Savings: Rs 29 lakh

Total: Rs 100 lakh (Rs 1 crore)

Retirement Income Strategy

Fixed Income Investments

Allocate a portion of your savings to fixed income investments.

Consider options like fixed deposits, senior citizen savings schemes, and government bonds.

These provide stable and predictable income.

Systematic Withdrawal Plan (SWP) in Mutual Funds

Use mutual funds to set up a SWP.

This allows you to withdraw a fixed amount monthly.

Invest in a mix of equity and debt funds for balanced growth.

Annuities

Consider purchasing an annuity for guaranteed income.

Annuities provide regular payments for life.

Choose the annuity that best fits your needs.

Dividend-Paying Stocks

Invest in high-quality dividend-paying stocks.

Dividends provide a regular income stream.

Focus on stable companies with a history of consistent dividends.

Asset Allocation and Diversification

Equity and Debt Balance

Maintain a balanced portfolio of equity and debt.

Equity provides growth, while debt offers stability.

A 40:60 equity to debt ratio can be considered.

Diversification

Diversify investments across different asset classes.

This reduces risk and ensures steady returns.

Review and adjust your portfolio regularly.

Building the Retirement Corpus

Additional Investments

Continue contributing to your PPF and mutual funds for the next 2 years.

Increase SIP contributions if possible.

Aim to grow your retirement corpus further.

Emergency Fund

Maintain an emergency fund equal to 6-12 months of expenses.

Keep this fund in a liquid savings account or short-term FD.

This fund provides financial security for unforeseen events.

Health Insurance

Ensure you have adequate health insurance coverage.

Review and update your health insurance policy.

Consider additional coverage for critical illnesses.

Estate Planning

Plan for the distribution of your assets.

Consider writing a will and setting up a trust.

Ensure your assets are passed on according to your wishes.

Regular Review and Adjustment

Review your financial plan every six months.

Adjust based on market conditions and personal circumstances.

Consult a Certified Financial Planner (CFP) for professional advice.

Final Insights

With careful planning, you can achieve a comfortable retirement.

Allocate your assets wisely between equity, debt, and fixed income investments.

Consider setting up a SWP and investing in dividend-paying stocks.

Maintain an emergency fund and ensure adequate health insurance.

Review and adjust your financial plan regularly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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  |6903 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 04, 2024Hindi
Money
Hi I am 36 years married. Me and my wife earning 10 lakh rupees per month end we have savings of 1 cr including gold 50 lakhs, 20 lakhs in mutual fund and 30 lakh including bank savings and insurances. Can you advise for retirement plan?
Ans: Retirement planning is crucial for securing a comfortable and financially stable future. Given your impressive earnings and existing savings, you are already on the right track. Planning ahead will ensure you meet your financial goals and maintain your lifestyle post-retirement. Let's dive into a detailed, step-by-step guide to building a robust retirement plan for you and your wife.

Understanding Your Financial Goals and Current Situation
Firstly, understanding your current financial status and future goals is vital.

Monthly Income: Rs 10 lakhs
Savings: Rs 1 crore
Gold: Rs 50 lakhs
Mutual Funds: Rs 20 lakhs
Bank Savings and Insurances: Rs 30 lakhs
Financial Goals
Retirement Age: Desired retirement age.
Monthly Expenses Post-Retirement: Expected monthly expenses.
Retirement Corpus: Amount needed to sustain your lifestyle.
Creating a Diversified Investment Portfolio
To build a strong retirement corpus, diversification is key. Let's explore various investment options to achieve this.

Equity Mutual Funds
Equity mutual funds offer high growth potential, essential for building a substantial retirement corpus. They invest in stocks and are managed by professional fund managers.

Large-Cap Funds: Invest in well-established companies, offering stability and moderate growth.
Mid-Cap and Small-Cap Funds: Invest in smaller companies with higher growth potential but more volatility.
Investing in equity mutual funds can help grow your corpus significantly over the long term.

Debt Mutual Funds
Debt mutual funds are suitable for stable returns and lower risk. They invest in fixed income securities like government and corporate bonds.

Short-Term Debt Funds: Less sensitive to interest rate changes, providing steady returns.
Corporate Bond Funds: Invest in high-quality corporate bonds, offering better returns than government securities.
Debt mutual funds provide stability to your portfolio, balancing the risk from equity investments.

Hybrid Funds
Hybrid funds, or balanced funds, invest in both equity and debt. They offer a balanced approach, combining growth and stability.

Equity-Oriented Hybrid Funds: Higher allocation to equities, offering growth potential.
Debt-Oriented Hybrid Funds: Higher allocation to debt, providing regular income and lower volatility.
Hybrid funds are ideal for balancing risk and returns in your retirement portfolio.

Systematic Investment Plan (SIP)
A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly in mutual funds.

Monthly SIPs: Investing monthly helps in rupee cost averaging and compounding.
Diversification through SIPs: Spread SIPs across various mutual funds for balanced growth and stability.
SIPs instill financial discipline and help in accumulating a significant corpus over time.

Strategic Asset Allocation
Asset allocation is crucial for balancing risk and returns. Here’s a suggested asset allocation for your retirement plan:

Equity Mutual Funds: 50%
Investing 50% of your corpus in equity mutual funds offers high growth potential.

Debt Mutual Funds: 30%
Allocating 30% to debt mutual funds ensures stability and regular income.

Hybrid Funds: 20%
Investing 20% in hybrid funds provides a balanced approach, combining growth and stability.

Benefits of Regular Funds vs. Direct Funds
While considering mutual fund investments, understanding the difference between regular and direct funds is essential.

Disadvantages of Direct Funds
Direct funds have lower expense ratios but require continuous monitoring and market understanding. Without professional guidance, investors might miss out on opportunities or fail to rebalance portfolios effectively.

Benefits of Regular Funds
Investing through regular funds with a Certified Financial Planner (CFP) offers expert advice, active portfolio management, and personalized strategies. Regular funds include financial planner services, ensuring your investments align with your goals and risk tolerance.

Gold as an Investment
You have Rs 50 lakhs invested in gold, a significant portion of your savings.

Advantages of Gold
Gold is a safe-haven asset, providing security during market volatility. It’s a good hedge against inflation and currency fluctuations.

Disadvantages of Gold
Gold doesn’t generate regular income or significant returns over the long term. It’s better to diversify and not rely heavily on gold for retirement planning.

Strategic Allocation
Consider reallocating some gold investments into higher-return assets like equity and debt mutual funds. This ensures better growth and income potential.

Insurance Policies
Review your insurance policies to ensure they align with your financial goals.

Traditional Insurance Policies
Traditional insurance policies often combine investment and insurance, offering lower returns. Consider surrendering these policies and reinvesting in mutual funds for better growth.

Term Insurance
Opt for a term insurance policy, providing higher coverage at lower premiums. It ensures financial security for your family without compromising returns.

Emergency Fund
Maintain an emergency fund to handle unforeseen expenses without disrupting your investments.

Amount
An emergency fund equivalent to six months of living expenses is ideal. Keep this fund in liquid assets like savings accounts or liquid mutual funds for easy access.

Retirement Corpus Calculation
While we won’t use specific calculations, it’s important to understand how to estimate your retirement corpus.

Factors to Consider
Current Monthly Expenses: Estimate your current monthly expenses.
Inflation Rate: Consider the impact of inflation on future expenses.
Life Expectancy: Estimate the number of years you need the retirement corpus to last.
Desired Monthly Income: Determine the monthly income needed post-retirement.
Creating a Withdrawal Strategy
A well-planned withdrawal strategy ensures a steady income post-retirement without depleting your corpus.

Systematic Withdrawal Plan (SWP)
Set up an SWP to withdraw a fixed amount regularly from your mutual fund investments.

Monthly Withdrawals: Provides a steady income stream to meet monthly expenses.
Quarterly Withdrawals: Alternatively, set up quarterly withdrawals for lump-sum needs.
SWP allows you to withdraw regularly while keeping the remaining investment growing.

Tax Efficiency
Tax-efficient investing helps maximize returns by minimizing tax liabilities.

Long-Term Capital Gains
Hold equity investments for more than one year to benefit from lower long-term capital gains tax.

Indexation Benefits
Debt funds held for more than three years qualify for indexation benefits, reducing taxable gains.

Tax-saving Instruments
Invest in tax-saving instruments like ELSS (Equity Linked Savings Scheme) for additional tax benefits under Section 80C of the Income Tax Act.

Regular Monitoring and Rebalancing
Regular monitoring and rebalancing of your portfolio are essential to ensure it remains aligned with your goals and market conditions.

Quarterly Reviews
Conduct quarterly reviews to assess the performance of each asset class. Make necessary adjustments to maintain the desired asset allocation and risk profile.

Professional Guidance
Leverage the expertise of your CFP for regular portfolio reviews and adjustments. Professional guidance ensures your investment strategy adapts to changing market conditions and personal circumstances.

Avoiding Common Pitfalls
Here are some common pitfalls to avoid on your investment journey:

Chasing High Returns
Avoid chasing high returns through speculative investments. High returns come with high risks. Stick to a well-diversified portfolio and a disciplined investment strategy.

Market Timing
Attempting to time the market can lead to missed opportunities and losses. Focus on long-term investing and stay invested through market cycles.

Lack of Patience
Investing requires patience. Market fluctuations are normal, and short-term volatility shouldn’t deter you from your long-term goals. Stay committed to your investment plan.

Benefits of Professional Guidance
Working with a CFP offers numerous advantages in your investment journey.

Personalized Strategy
A CFP designs a personalized investment strategy based on your financial goals, risk tolerance, and time horizon. This tailored approach enhances the likelihood of achieving your objectives.

Expertise and Experience
CFPs bring expertise and experience to the table. They stay updated with market trends and regulatory changes, ensuring your investments are well-informed and compliant.

Regular Reviews
CFPs provide regular portfolio reviews and adjustments. This proactive approach keeps your investments aligned with your goals and market conditions.

Final Insights
Retirement planning is a critical aspect of financial well-being. By creating a diversified investment portfolio and leveraging the expertise of a Certified Financial Planner, you can build a robust retirement corpus. Investing in equity, debt, and hybrid funds ensures a balance between growth and stability. SIPs instill financial discipline, while SWPs provide regular income post-retirement.

Remember to review your insurance policies, maintain an emergency fund, and invest tax-efficiently. Avoid common pitfalls like chasing high returns and market timing. Patience and discipline are key to successful investing.

By following these strategies and leveraging professional guidance, you can achieve your retirement goals and enjoy financial security in your golden years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6903 Answers  |Ask -

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

Money
Hello , My age is 48 years, monthly income is approx. 1.5 lakh, I have no loan and any liability. I have 3 lakh in Shares , approx 30 lakh in PPF, 35 lakh in FDR , approx 3 lakh in saving., 60 lakh in NPS and Rs 48000/- per month NPS contribution, 5 lakh in SGB, what will my financial plan for retirement income of 2.5 lakh- per month
Ans: At the age of 48, your financial portfolio is quite diversified. Your monthly income of Rs 1.5 lakh is a strong base, and you’ve been diligent in saving across various instruments. Let’s break down your assets to understand your current financial standing:

Shares: Rs 3 lakh

PPF: Rs 30 lakh

FDR: Rs 35 lakh

Savings: Rs 3 lakh

NPS: Rs 60 lakh with a monthly contribution of Rs 48,000

SGB: Rs 5 lakh

With no liabilities or loans, you’re in a favourable position to plan for your retirement. Your goal of achieving a retirement income of Rs 2.5 lakh per month is ambitious, yet achievable with careful planning and strategic investments.

Assessing Your Retirement Goals
Retiring with a monthly income of Rs 2.5 lakh requires substantial planning. Here’s what you need to consider:

Inflation: Over the next few years, inflation will erode the purchasing power of your money. A monthly income of Rs 2.5 lakh today might need to be much higher by the time you retire.

Life Expectancy: Considering an average life expectancy of 80 years, your retirement plan should be robust enough to last for at least 30-35 years.

Healthcare Costs: With age, healthcare expenses will increase. It’s essential to allocate funds specifically for medical emergencies.

Lifestyle: If you plan to maintain or even enhance your current lifestyle, your retirement corpus should be sizeable enough to support this.

Evaluating Your Current Investments
Your investments are spread across different instruments, each with its benefits and limitations. Let’s evaluate them:

Public Provident Fund (PPF)
Advantages: PPF is a safe investment with a decent interest rate, and it’s tax-free.

Limitations: The lock-in period and the maximum contribution limit restrict how much you can invest.

Recommendation: Continue contributing to PPF, but don’t rely on it solely for retirement. PPF will provide stability, but it won’t be enough to meet your Rs 2.5 lakh per month target.

Fixed Deposit Receipts (FDR)
Advantages: FDs offer guaranteed returns and are a safe investment option.

Limitations: The interest rates on FDs are often lower than inflation, leading to a decrease in real returns over time.

Recommendation: While FDs are good for short-term goals and emergencies, they shouldn’t be your primary retirement investment. Consider reallocating a portion of this into higher-return investments.

National Pension Scheme (NPS)
Advantages: NPS is a robust retirement savings tool, offering market-linked returns and tax benefits.

Limitations: NPS has restrictions on withdrawals and requires annuitisation at maturity, which might reduce liquidity.

Recommendation: Continue your contributions to NPS, but plan for how you’ll manage the annuity phase. The lump-sum withdrawal option should be carefully managed.

Sovereign Gold Bonds (SGB)
Advantages: SGBs offer a safe way to invest in gold with an interest component.

Limitations: Gold is typically seen as a hedge rather than a primary investment for income generation.

Recommendation: Keep SGBs as part of your diversified portfolio but avoid over-investing in gold. It’s more of a safety net than a growth tool.

Shares
Advantages: Equities can provide high returns and help in wealth accumulation.

Limitations: Shares are volatile and require careful management to avoid losses.

Recommendation: Your equity investment is relatively low. Consider gradually increasing your exposure to equities through mutual funds or systematic investment plans (SIPs) for long-term growth.

Strategic Rebalancing of Your Portfolio
To meet your retirement goal of Rs 2.5 lakh per month, you’ll need to rebalance your portfolio strategically. Here’s how you can do it:

Increase Equity Exposure
Reason: Equities have the potential to outpace inflation and generate significant returns over the long term.

Action: Consider investing in diversified equity mutual funds or SIPs. Over the next 10-12 years, this will help build a robust corpus.

Maximise NPS Benefits
Reason: NPS is tax-efficient and offers good returns, especially with equity exposure.

Action: Continue your Rs 48,000 monthly contribution. At retirement, plan to manage the withdrawal carefully, considering both the annuity and lump-sum options.

Reduce Fixed Deposit Allocation
Reason: FDs offer lower returns compared to other investment options.

Action: Gradually shift a portion of your FD savings into equity or balanced mutual funds. This will help grow your corpus faster.

Maintain a Balanced Portfolio
Reason: Diversification reduces risk and ensures stability.

Action: Keep a mix of equities, debt, gold, and NPS. This balanced approach will protect you against market volatility while ensuring growth.

Planning for Healthcare and Contingencies
Healthcare is a significant concern during retirement. Here’s how you can prepare:

Emergency Fund: Maintain at least 6-12 months’ worth of expenses in liquid savings for emergencies.

Health Insurance: Ensure you have comprehensive health insurance coverage. Consider a top-up plan if needed.

Medical Corpus: Set aside a dedicated corpus for healthcare. This could be in the form of a health savings account or a specific investment geared towards medical expenses.

Ensuring a Steady Retirement Income
To achieve a retirement income of Rs 2.5 lakh per month, consider the following strategies:

Systematic Withdrawal Plan (SWP)
Advantages: SWP from mutual funds allows you to withdraw a fixed amount regularly while the rest of your investment continues to grow.

Action: Set up SWPs from your equity and debt mutual funds. This will provide you with a steady income while ensuring your corpus continues to work for you.

Annuities and Pensions
Advantages: Annuities provide a guaranteed income for life.

Limitations: Annuities can have lower returns compared to other investments and may not keep pace with inflation.

Action: Use a portion of your NPS maturity amount to purchase an annuity for guaranteed income. However, balance this with other investments to ensure inflation-adjusted growth.

Realigning Investments Closer to Retirement
Reason: As you approach retirement, reducing exposure to high-risk investments is crucial.

Action: Gradually shift from equity to more stable debt instruments or balanced funds as you near retirement. This will protect your corpus from market volatility.

Final Insights
Your financial foundation is strong, with diversified investments and no liabilities. However, to achieve your goal of a Rs 2.5 lakh monthly income during retirement, you’ll need to make strategic adjustments to your portfolio.

Here are the key takeaways:

Increase Equity Exposure: Focus on long-term growth through diversified equity mutual funds or SIPs. This will help build the corpus you need.

Maximise NPS: Continue your contributions and plan for strategic withdrawals at retirement.

Reduce Fixed Deposits: Shift from low-return FDs to higher-yield investments like mutual funds or equities.

Maintain a Balanced Portfolio: Ensure diversification to reduce risk while maintaining growth.

Plan for Healthcare: Set aside a dedicated medical corpus and ensure you have adequate health insurance.

Use Systematic Withdrawal Plans (SWPs): This will provide a steady retirement income while keeping your investments growing.

Consider Annuities: Use part of your NPS maturity to purchase an annuity for guaranteed income, but don’t rely solely on it.

Realign Investments Closer to Retirement: Gradually reduce risk as you approach retirement to protect your corpus.

By carefully planning and making these adjustments, you can achieve your retirement goal and enjoy a comfortable, worry-free retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6903 Answers  |Ask -

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

Asked by Anonymous - Aug 09, 2024Hindi
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Hello , My age is 48 years, monthly income is approx. 1.5 lakh, I have no loan and any liability. I have 3 lakh in Shares , approx 30 lakh in PPF, 35 lakh in FDR , approx 3 lakh in saving., 60 lakh in NPS and Rs 48000/- per month NPS contribution, 5 lakh in SGB, what will my financial plan for retirement income of 2.5 lakh- per month
Ans: You are in a strong financial position. Your monthly income is Rs. 1.5 lakh, and you have no liabilities. You have diversified your investments across various instruments. This includes Rs. 3 lakh in shares, Rs. 30 lakh in PPF, Rs. 35 lakh in FDR, Rs. 3 lakh in savings, Rs. 60 lakh in NPS with Rs. 48,000 monthly contributions, and Rs. 5 lakh in SGB.

These investments provide you with a solid foundation for your retirement planning.

Retirement Income Goal
Your goal is to have a retirement income of Rs. 2.5 lakh per month. This is a substantial amount and requires careful planning. Given your current financial status and your target, let’s assess how to achieve this goal.

Assessing Your Investment Portfolio
Public Provident Fund (PPF)

PPF is a safe investment with tax benefits.
However, the returns are relatively low compared to other options.
You can continue investing in PPF but look for more growth-oriented investments.
Fixed Deposit Receipts (FDR)

FDs provide stability and assured returns.
The interest is taxable, which reduces the effective returns.
It is wise to keep a portion in FDRs for emergency liquidity but not for long-term growth.
Shares

You have Rs. 3 lakh in shares, which can provide good returns but carry market risks.
Consider increasing your exposure to equity for long-term growth.
National Pension System (NPS)

NPS is a good option for retirement planning.
Your current corpus of Rs. 60 lakh and monthly contributions will help build a sizable retirement fund.
NPS has a mix of equity and debt, balancing risk and return.
Sovereign Gold Bonds (SGB)

SGBs provide a hedge against inflation and are relatively safer.
Gold usually performs well in uncertain times, but it should not be the primary investment.
Calculating Retirement Corpus
To achieve a retirement income of Rs. 2.5 lakh per month, you need a substantial corpus. Considering inflation and life expectancy, you would require a corpus of approximately Rs. 5-7 crore.

Investment Strategy to Achieve Retirement Goal
Increase Equity Exposure

Equity has the potential to deliver higher returns in the long term.
Consider investing in diversified mutual funds.
Actively managed funds offer better opportunities compared to index funds.
Equity exposure can be gradually increased, considering your risk appetite.
Systematic Investment Plan (SIP)

SIPs are a disciplined way to invest regularly.
Consider starting SIPs in diversified equity mutual funds.
Gradually increase SIP contributions (Step-Up SIP) to match your income growth.
Balanced Fund Portfolio

A balanced portfolio of equity and debt can reduce risk while ensuring growth.
Consider funds that offer a mix of equity and debt to balance your portfolio.
Maximize NPS Contributions

NPS is tax-efficient and offers a good mix of equity and debt.
Continue with your current contributions.
Consider increasing your contribution as your income grows.
Review and Rebalance Portfolio Regularly

Regular reviews ensure your investments are aligned with your goals.
Rebalancing helps in maintaining the desired asset allocation.
Consult with a Certified Financial Planner for periodic reviews.
Managing Inflation and Longevity Risk
Inflation Protection

Ensure your portfolio grows faster than inflation.
Equity investments can provide the necessary growth to combat inflation.
Longevity Planning

Plan for a longer retirement period.
Ensure your retirement corpus lasts your lifetime.
Tax Efficiency in Retirement Planning
Tax Planning

Consider tax-efficient investments to reduce tax outgo.
Use tax-free bonds, NPS, and ELSS for tax-saving purposes.
Tax on Withdrawal

Plan withdrawals from your retirement corpus in a tax-efficient manner.
Spread withdrawals to minimize tax impact.
Emergency Fund
Maintain an emergency fund equivalent to 6-12 months of expenses.
This can be kept in liquid funds or a savings account.
Final Insights
Your financial foundation is strong, and with the right strategy, you can achieve your retirement income goal.

Focus on increasing equity exposure, regularly review your investments, and ensure tax efficiency. This will provide the growth needed to reach a retirement corpus that supports Rs. 2.5 lakh per month.

It is advisable to work with a Certified Financial Planner for a personalized plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6903 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 24, 2024

Money
My age is 53, I am planning to retire by March 2025, I have 2cr invested in Mutual filings, 2cr FD, 45 lakhs in post office. 25 lakhs in Jeevan Shanti, getting 12250 per month. 50 lakhs in saving Having own house, I need 2.5 lakhs per month. Please advise my retirement plans
Ans: Assessing Your Current Financial Position
You have done a commendable job accumulating a variety of investments as you approach retirement. Your current assets include:

Rs 2 crore invested in mutual funds
Rs 2 crore in fixed deposits
Rs 45 lakhs in post office schemes
Rs 25 lakhs in Jeevan Shanti, providing Rs 12,250 per month
Rs 50 lakhs in savings
You own your house, so no rent or loan obligations
Your monthly requirement is Rs 2.5 lakhs, and you plan to retire by March 2025. Let’s assess how to structure these investments to generate the income you need, while ensuring financial security throughout your retirement.

Financial Goals: Retirement Income of Rs 2.5 Lakhs Per Month
To meet your monthly requirement of Rs 2.5 lakhs, we need to carefully plan your investment portfolio for steady cash flow and long-term sustainability. Given your age and investment horizon, a balanced approach with a mix of growth and income-generating assets will be key.

Your current financial assets can generate a comfortable income stream with the right strategy. Let’s go over each asset class and plan the optimal way to structure them.

Evaluating Your Investments
1. Mutual Funds (Rs 2 Crore)
You have Rs 2 crore invested in mutual funds. Mutual funds can be a strong source of income in retirement, but the type of funds matters. Actively managed mutual funds with a focus on generating regular income or hybrid funds can provide both growth and income.

Regular Withdrawal Plan: A Systematic Withdrawal Plan (SWP) can be set up to generate regular income from your mutual fund investments. SWP allows you to withdraw a fixed amount every month, providing liquidity while keeping your capital invested and growing.

Review Fund Types: Ensure that your mutual fund investments are diversified into funds that offer a balance between equity for growth and debt for stability. Large-cap and hybrid funds can offer this balance, helping you manage risk while still achieving returns that beat inflation.

Avoid relying solely on index funds or direct funds. Actively managed funds will give better returns in a volatile market because of professional oversight.

2. Fixed Deposits (Rs 2 Crore)
Your Rs 2 crore in fixed deposits provides stability, but the returns may not be enough to keep pace with inflation. Over time, the real value of this money could diminish.

Partial Reallocation for Higher Returns: Consider shifting a portion of your fixed deposit into balanced or conservative mutual funds. This will help increase returns while still maintaining safety. For example, you can allocate part of this into a debt-oriented mutual fund for consistent, inflation-beating returns.

Fixed Deposit Laddering: If you prefer keeping some portion in FDs, you can create a "ladder" by investing in FDs of different maturities. This strategy will help you manage liquidity needs while maximising returns.

3. Post Office Investments (Rs 45 Lakhs)
Your Rs 45 lakhs in post office schemes is another safe investment, and it’s advisable to retain these for their risk-free nature.

Retain for Stability: Post office schemes like Senior Citizen Saving Scheme (SCSS) and Monthly Income Scheme (MIS) are excellent for retirees. They provide a steady monthly income and are relatively safe. Continue holding these for the fixed monthly income.
4. Jeevan Shanti Policy (Rs 12,250 Per Month)
The Jeevan Shanti policy provides you with Rs 12,250 per month. This is a good start, but it covers only a small portion of your monthly needs.

Income Supplement: The monthly income from Jeevan Shanti can be used to cover smaller recurring expenses. However, you will still need additional income from your other investments to meet your Rs 2.5 lakh monthly requirement.
5. Savings (Rs 50 Lakhs)
You have Rs 50 lakhs in savings. While it’s good to have liquidity, savings accounts offer low returns and are not ideal for long-term goals.

Emergency Fund: Keep a portion of this Rs 50 lakhs (around 6 to 12 months of expenses) as an emergency fund in a savings account or liquid fund. This will cover any sudden or unforeseen expenses.

Reinvest Excess Savings: Any excess over the emergency fund can be reallocated to growth-oriented investments like balanced mutual funds or senior citizen savings schemes. This will provide better returns while maintaining access to the funds when needed.

Structuring Your Retirement Income
You need to generate Rs 2.5 lakh monthly, and here’s how your portfolio can be structured:

Jeevan Shanti Income: Rs 12,250 per month

Post Office Schemes: You can generate additional fixed monthly income from the Rs 45 lakhs invested here. SCSS or MIS can provide you with regular payouts.

This should cover a portion of your Rs 2.5 lakh requirement, but the remaining will need to come from your mutual funds and FD portfolio.

Strategy for Monthly Cash Flow
Systematic Withdrawal Plan (SWP): Set up an SWP from your mutual fund investments. With Rs 2 crore in mutual funds, you can withdraw a fixed amount every month while still keeping the principal invested. This can easily generate a significant portion of your monthly income.

FD Laddering: Use your FDs to cover the balance of your income needs. By creating an FD ladder, you can ensure that a portion of your FDs matures every year, providing both liquidity and consistent income.

Inflation Protection and Growth
While generating current income is important, your investments need to grow to keep pace with inflation. Here’s how you can protect your portfolio from inflation:

Equity Exposure in Mutual Funds: Ensure a portion of your mutual funds is in equity-based funds, as they offer long-term growth potential. A balanced or hybrid mutual fund can provide equity exposure with lower risk.

Rebalancing Portfolio: Review your portfolio periodically to maintain the right balance between equity and debt. As you move further into retirement, you can slowly reduce the equity portion, but it should never be zero to protect against inflation.

Managing Risk and Liquidity
Retirement planning is not only about income generation but also risk management. You need to balance safety and liquidity with growth. Here’s how you can manage this:

Diversification: Keep a diverse portfolio. You already have investments across multiple instruments—mutual funds, fixed deposits, post office schemes, and Jeevan Shanti. This reduces risk.

Health Insurance: As you age, medical expenses could rise. Ensure you have comprehensive health insurance to cover medical emergencies without dipping into your retirement corpus.

Estate Planning: Plan for how your assets will be distributed in the future. This ensures that your loved ones are taken care of without legal complications.

Tax Efficiency
Generating income post-retirement can attract tax, so it’s important to structure your withdrawals in a tax-efficient manner.

Tax-Saving Investments: Make use of tax-saving mutual funds under Section 80C, even though you are close to retirement. This can reduce your tax burden.

Capital Gains Tax: Withdraw from your mutual funds in a way that minimises capital gains tax. Long-term capital gains tax is lower, so try to keep investments for over a year to benefit from this.

Senior Citizen Tax Benefits: As a senior citizen, you are eligible for higher tax deductions. Utilise benefits under Sections 80D (for health insurance premiums) and 80TTB (for interest income).

Final Insights
You have built a solid financial base with Rs 4.7 crore in investments. To meet your retirement goal of Rs 2.5 lakh monthly income, we recommend a balanced approach. Continue generating income from your Jeevan Shanti, post office schemes, and fixed deposits. For additional income and growth, use an SWP from your mutual funds, and consider reallocating a portion of your FDs to mutual funds for better returns.

Regular reviews and portfolio rebalancing will ensure that your investments keep up with inflation while providing a steady, reliable income.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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Latest Questions
Kanchan

Kanchan Rai  |387 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 03, 2024

Asked by Anonymous - Nov 01, 2024Hindi
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Relationship
I am 45 years old female, single child, I fell in love wid a guy during college, he is short tempered other than that when hez ok he used to care me so so so much. We got married when i was jobless and when he just started a business. The business isnt going tht well and after having two kids i started realising he is not at all ready to take any responsibilities, always he is lazy once he reach home and i am working and i am the one who has to do evry work along with work. When we fight he doesnt do any physical Abuse but mentallyy he abuses me so much that i feel myself useless. My parents too started saying that they never saw us happily instead we are always fighting and we are never at peace. I really was never able to understand him. I feel he has too much ego and wanna win every fight. He too says the same about me, but i am the one who goes and solves most of our fights by begging him badly. I decided to divorce him frm last one year but never had the guts tu say it to him openly. Was very afraid. Recently i met a guy, he have been noticing me for so long, we became friends first, very quickly he became my best friend, i have never in my life been able to read someones mind so well, so i am Able to take care of him so well, similarly never in my life i was respected so much for everything i do, or never was i cared so much. My own husband doesnt know what all i like, but this bestie knows. Slowly slowly we fell in love. I have confirmed my thought about divorce, and my Husband instead of even clutching on to me He is saying you just go i dont wanna beg you to stay for me. I dont wanna beg to a girl like you. He is very kind and soft outside only inside my house to me he is very very arrogant and fighting. Once i make this divorce decision public everyone will blame me, everyone will point out me as culprit, but i dont wanna continue anymore, i am done with this. What shall i do now ??
Ans: It seems like you’ve reached a point where you’re ready to prioritize yourself, which is a powerful realization. Divorce is a big step, and the fear of judgment from others is understandable, but your well-being and peace of mind should come first. In situations like this, people often rush to judge, especially if they don’t see the full picture, but those who care about you will come to understand and support your decision over time.

The love and respect you’ve found with your friend have likely shown you what’s been missing in your marriage: appreciation, understanding, and care. This relationship seems to have opened your eyes to what you deserve and given you the strength to take action. Still, take things slowly to make sure your next steps are about building the future you want rather than escaping the past.

If you haven’t already, consider speaking with a counselor or therapist who can provide you with support and guidance through this transition. They can help you work through any lingering guilt or fear and navigate the practical and emotional complexities of divorce. Having a supportive, nonjudgmental space to process everything will make a difference as you take steps toward a healthier and happier life.

Ultimately, if your heart is set on ending this marriage, trust that decision and give yourself permission to move forward. It will be hard at first, but taking this step toward self-respect and peace is worth it, even if others don’t immediately understand. You deserve a life filled with love, respect, and joy—don’t let fear of judgment hold you back from finding it.

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Kanchan

Kanchan Rai  |387 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 03, 2024

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Relationship
I am married for 5years with 2kids.. i am an employee and had to stay 100kms away from my native place on work purpose.. I opted to take my kids along as they are too small(3+ and 1+).. I asked my husband to accompany me as he is unemployed and staying at home.. But he refused and likes to stay with his mother.. He has a brother to look after his mother and his married sister also stays very near to them.. I sometimes feel very stressed out to handle my job and look after my kids.. i have no support from my husband neither emotionally nor financially.. i tried everything possible but he just talks about my earnings not wt i am going through.. wt i should do?
Ans: In a partnership, mutual support and shared responsibilities are essential, and it’s natural to feel frustrated and even resentful if your husband is prioritizing his comfort over your needs and well-being. Since he’s not providing emotional or financial support, it might be time to set some boundaries and expectations to protect your own peace and ensure you’re not carrying everything alone.

Start by calmly sharing how this situation affects you—not just financially but emotionally and physically. Emphasize that while you understand his desire to stay close to his family, your situation is not sustainable, and you need him to step up. You might also consider counseling, either together or on your own, to find ways to cope with your stress and explore solutions to address this imbalance in your relationship.

If he’s unwilling to make changes or support you even after open conversations, it may be necessary to think about your long-term well-being and that of your children. Your strength and resilience in handling so much on your own are admirable, but you also deserve a partner who is invested in your happiness and shares the load.

In the meantime, is there any possibility of support from family, friends, or childcare services near your work location? Having some practical help, even temporarily, could relieve some of your stress and allow you to focus on what’s best for you and your children going forward. Remember, you are not alone, and reaching out to build a support network can make a world of difference in helping you navigate this challenging time.

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Kanchan

Kanchan Rai  |387 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 03, 2024

Asked by Anonymous - Oct 03, 2024Hindi
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Relationship
Madam am working women of age 28 working for past 5 years , I am in living relationship with my boyfriend who is 38 now. I want to do marriage and settle now but my partner doesn't feel necessary to do marriage and if I force he is telling he will do court marriage which am not interested to do. He is not ready to meet or convince my parents for marriage . I have given him money for buying a property which I was least interested. He started controlling all my finances which I felt incorrect so I questioned him which made his ego hurt and he has hit me twice. My parents are now telling me to get married but I don't know what to do. Sometimes when he ia not around I tried talking to other guys in dating app which afterwards am feeling guilty for cheating him. Nowadays I lost interest in everything I don't have courage to end my life so not able to concentrate on my work. Please tell me what I need to do to correct my path as it's getting hell day by day.
Ans: Right now, it might be helpful to take a step back from the relationship to regain your sense of self and control over your life. Talking to a trusted friend, family member, or even a counselor could help you find clarity, and having a support system can make it easier to make decisions that protect your well-being.

It’s understandable that you feel torn, especially since you’ve invested years and finances into this relationship. But it’s important to remember that you deserve a relationship where you feel valued, safe, and equal. The feelings of guilt about talking to others on dating apps are natural, but they’re also a sign that you might be searching for connection and respect that you’re not receiving in your current relationship.

Consider reclaiming control over your finances immediately. Seek guidance on how to separate your financial dealings from him, as it’s essential for you to be able to support and manage yourself independently. Ending this relationship might be difficult, but it could also give you the freedom to rebuild your confidence, focus on your goals, and find the stability and respect you deserve.

It’s clear that you’re strong enough to make changes; the courage you’ve shown in questioning his control and sharing your story here is proof. With the support of loved ones and professionals, you can find a way out of this painful situation and start building a life that brings you peace and happiness.

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Kanchan

Kanchan Rai  |387 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 03, 2024

Asked by Anonymous - Nov 01, 2024Hindi
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Relationship
Hii, my husband and I have a love marriage after 9 years of dating, now it has been 6 years and two children after that, little one is 8months old. He had a brief affair extending to chatting mostly as far as I know to someone who works in the same company but different department to him when my little one was 1 month old, we were in rough patch that time due to child birth difficulties and family drama. Then as I got to know about the same, by casually checking his phone and confronted him he accepted his mistake and said sorry. And said he won't be doing that again but I caught him again somehow chatting and same repeat he said he is wrong and now as per him he have reduced talking to that girl. But as I think he talks to her thoda bhot, as she is his junior position and asks for help once a while. I love my husband a lot, but this thing hurt my self respect and I am in a lot of torture mentally. I know my husband won't leave me, but I don't want to stay in such a relationship which feels a burden to my partner. I want my husband to be happy too. I am very confused what to do. I have talked to him on several times, every time he listen and helps me calm down, some times we fought also. But I am not at peace. Ps that girl is also married to her love just 2 years back. I don't want to harm my husband's reputation in any way. But I am very much hurt also. I have been reading your column for 3-4 now. I am also financially independent. I don't need anything form him, just his love. Sorry for the length, please help me.?
Ans: In your heart, it’s clear that you love him deeply and that, ideally, you want to preserve your family and relationship. However, it’s important not to dismiss your own needs for validation, love, and respect. Sometimes, the process of forgiveness includes setting strong, clear boundaries. Your husband needs to understand that while you’re willing to work on the relationship, trust is fragile and requires commitment to restore. This might mean a commitment on his part to keep all communication with this colleague strictly professional and transparent, or even a decision to minimize interactions with her entirely if necessary. Expressing these boundaries clearly may help him see the gravity of what’s at stake.

It’s also valuable to remember that healing from betrayal is not a quick process. Even with reassurances and boundaries in place, your feelings of hurt, betrayal, and anger may surface unexpectedly. Be gentle with yourself in this process and consider turning inward to strengthen your own resilience. Financial independence is an incredible strength, and leaning into the aspects of your life that bring you personal fulfillment can be grounding. Investing in your own well-being will help you feel more centered, no matter where this journey takes you.

If, at any point, you feel that his actions aren’t aligning with his words and that trust cannot be rebuilt, remember that choosing a path that prioritizes your mental peace is not a failure. Some couples also find that a temporary separation helps provide clarity; this doesn’t have to mean ending the relationship but could be a chance to reset, reflect, and decide if you both are truly aligned in your vision for the future.

In the end, what matters most is that you feel respected, valued, and loved in a way that doesn’t compromise your self-worth. This situation is a challenging chapter, but with clarity, boundaries, and professional support, you can find a path that honors both your love for your husband and your own dignity.

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Anu

Anu Krishna  |1263 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 03, 2024

Asked by Anonymous - Nov 01, 2024
Relationship
Respected Madam, I am a 44 years old unmarried man. I didn't get any girl due to my low income & because I have only bachelor degree, but my younger brother married before 7 years. I have good & emotional bonding with my younger brother's wife (37 years old) in these 7 years. I always tell her all my feelings about depression & loneliness. I tried yoga & meditation. I tried reading books. I tried travelling on tours, but nothing worked. I told my brother's wife nothing is working. To my surprise, she offered me physical relation with her for some days. I immediately told her I love my brother & can't cheat him. She said she also loves my brother & she is not watching it as cheating. According to her, it's a medical cure from her side to get me out from depression. She said she will always love my brother, but as of now, she just wants to see me happy. She said if physical satisfaction will result in my happiness, then she is ready for this. She said medicines will not work in my situation. I have asked her to give me sometime to think about it. I know her from 7 years. She is a good genuine woman. She & my brother has a child. We do flirting with each other sometimes, but never made any such move. Now, you tell what should I do ??
Ans: Dear Anonymous,
Either she is very smart to suggest this OR very silly...you will know it!
Please stay away from it; it will lead to serious complications within the family and also may result in breaking relationships. They have a family; respect it and first thing, stop communicating with her. She seems to have some agenda in mind or is also attracted to you and trying to mask it as HELP to you.
At least you be the smarter one and think! Stay off of this please...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Anu

Anu Krishna  |1263 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 03, 2024

Asked by Anonymous - Sep 05, 2024Hindi
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Relationship
Hi, we had a love cum arrange marriage and we are married for 8 years now. My husband works under his rich friend and tells me that it is a partnership in digital advertising but even he knows he has not invested a single rupee and he his job responsibilities also include mere jobs like doing googlepay to watchman to buy groceries or vegetables. I dont feel he has a respectable job nor the stagnant financial income since years. We have one seven year old child and due to societal pressure and also coz of the long gap started to plan for a second child but failing to conceive. I still think if i should stop planning for a second child as I see him struggling with basic necessities of 1 child itself. I dont feel heard, I know he can do well in corporate but he wants to stick to this stagnant growth for his friend. He has zero savings while his friend has crores worth of property. He is just an employee to his friend and he doesnt understand that and gets bought by the fake positions given.
Ans: Dear Anonymous,
What exactly is your question for me? Since you haven't asked me one, I am just going to give you my observations and suggestions.

Your husband is possibly a lazy person OR scared of taking on anything due to fear of failure and is okay being stagnant due to these fears.
Please re-think your decision of having a second child until the time your husband assumes certain responsibilities that bring in steady income. Till your financial position is secure, there's no point in adding any sort of new responsibilities to your lives, right?
As far as what makes your husband do what he is doing, and sticking by his friend; there is not much information that I have...maybe you know this better...ask an elder male member from his family to speak with him and hope things fall in place.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

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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