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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  |6625 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  |6625 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  |6625 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  |6625 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  |6625 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
Ravi

Ravi Mittal  |360 Answers  |Ask -

Dating, Relationships Expert - Answered on Oct 15, 2024

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Relationship
Hi, I am not yet mairred. I used to like a man and after a month we decided to get married. He was of my caste so I thought my parents won't deny this mairrage. I used to talk to and wanted to let him know everything about my past so that we can built a strong root of our relationship. I spoke every detail of my past life to him. Then before he proposed me for mairrage I went for a vacation with my male friend to dehradun. I didn't tell him that day as he didn't proposed me till that day then why would I tell everything about me to anyone. He was noone to me at that time. After that he came to visit me in Delhi and on the same when he was on train a friend of mine along with his fiance came to meet me after a very long time. I asked him and he didn't denied. After returning home he blocked me. I cried and cried, called multiple times but he didn't received my call. Even I went to his location and waited for almost 3 hr but he didn't came. Then I asked my sister to call him. Then he talked to me but he said me so much of harsh and vulgar words that I went in shock. I cried a lot but he went on humiliating me. But somehow I convinced him to stay with me. I never talked to that friend ever. Then I told my parents about him that I want to get married with this men. Being a girl's father my father enquired about him by being annonymous. And trust me noone has said anything good about him. Later on we get to know that his father has a murder case on him of his brother in law. But then I wanted to get married. Finally my parents agreed only for my happines. Meanwhile I was never being respected by him. He always doubt me, humiliate me, abuse me mentally and physically, and when I was like I don't want to be with you he used to say sorry and begged me to be with him. He even used to restrict to visit my uncle aunty. His mother wants used to defend him and never used to make him realise that he was wrong. Then before engagement we went to Kolkata to buy dress. Yes one more thing I have informed him on the very first day that I used to drink and smoke occassionally. So whenever he used to visit me he always wanted to drink with me whether I want it or not. He always used to abuse me and humiliate me in front of everyone after drinking, so after a period of time I used to avoid drinking. Then he used to fight with me for that also that why will you not drink. In kolkata the same thing happen. We stayed there for 3 days and he was convincing to go to club from the very first day but I refused. On 3rd he hit me. After engagement his family asked for dowry. After a lot of dealing my parents agreed for an amount. But I felt betrayed. I stopped talking. After after when I initiated the conversation he picked up a fight and said he won't marry. I tried to convince. But when everyone was blaming me then I broke my silence and said everything about him to my parent. But he manipulated everything and made me villain. My parents want me to get married What should I do
Ans: Dear Akriti,
After reading your question I can only give you one advice, please do not marry him no matter what people say. Even if we overlook every other red flag that he has exhibited, abuse of any form is unacceptable. Why are you trying to convince your parents to marry a guy who hits you? Do you think you deserve it or anyone, for that matter, deserves that?

Now, no matter who tries to manipulate you, or however much they try to convince you, get out of the relationship for the love and self-respect you have for yourself. It is a big decision but in your case, it is worth making that big decision. I'd normally never tell people they should this or they shouldn't do that, but in your case, no sane person would ever suggest you marry this man and be subjected to abuse for the rest of your life.
Please make the right choice.

Best Wishes

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Ravi

Ravi Mittal  |360 Answers  |Ask -

Dating, Relationships Expert - Answered on Oct 15, 2024

Asked by Anonymous - Oct 06, 2024Hindi
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Relationship
I am dating a person for 5years when we are doing internship. He is always there whenever I need any support and help in my bad time. He will protect me and loves me a lot. It is my first dating experience initially when we start dating we have intense attachment but I thought we would not be remain together for much longer time. I was always interested in good looking handsome man he is not that fair and handsome. Also he is from different caste and region(he is Bihari and I am from Uttarakhand) and in his family he has mom and sister(they are finding a match for her).I don’t know if I should marry him or not. Because I am not comfortable with his family(his mother is somewhat very concerned about his son not captured by any girl). So I think it will be a struggle for him to convince her. But my question is it is worth to go for love marriage if the boy loves you a lot but still I think there is gap with the criteria of being handsome which I dream as a young girl story even our bonds are getting stronger Please suggest what to do.
Ans: Dear Anonymous,
Appearance does not last a lifetime. Are you sure it is that important for you? After all, you fell in love with a man whose appearance isn't his best quality. Makes me wonder if you are just giving into the societal construct of wanting to marry for good looks.

Next, if you are concerned about your future in his house, it is best not to rush anything in terms of getting married. Think about it; have a clear discussion with him about the kind of future he can offer you. Love isn't the only thread that holds onto a relationship.

I cannot tell you if you should pursue this relationship, but I can tell you that you shouldn't break up with someone because they are not fair or handsome by your standards.

Best Wishes.

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Ravi

Ravi Mittal  |360 Answers  |Ask -

Dating, Relationships Expert - Answered on Oct 15, 2024

Asked by Anonymous - Oct 06, 2024Hindi
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Relationship
Hi, I’m a 26 yr old woman, was in a relationship with my classmate from school a year ago. We dated for a few months and then talked to my parents about us as they had started looking for matches for me in arranged marriage . Once I told them about us they got very emotional and didn’t agree for our marriage as we are from different caste. So we decided to breakup and just stay as friends but we are not able to move on from each other ..it’s been 6 months now, my parents have started looking for alliances for me again now but I’m not getting any interest in these because I’m not able to forget him. But I’m also scared to take a strong decision to hurt my parents and get married to him because I’m a very sensitive person and sometimes he behaves manipulative with some people and I’m scared he’ll do that with me also if any fights happen with him or his family. But I’m not able to forget him. Please tell me what to do as I have lost peace and crying every night.
Ans: Dear Anonymous,
Sounds like you are torn between your feelings for him and love and respect for your parents. Firstly, acknowledge that you are allowed to feel confused. Next, understand that you deserve a relationship where you feel happy and safe. Will this relationship give you that? Take some time to evaluate whether staying with him will align with your goal of long-term happiness. You have mentioned manipulation; consider that too when gauging the potential of this relationship.

Coming to your parents, you can try gently communicating your unwillingness to get married to someone else right now. That does not automatically translate to your desire to marry this guy. It can also mean that you need some time to figure things out. Ultimately, you need to make a decision that makes you happy- whether it means working things out with him or taking a separate path. I am sure you will make the right choice.

Best Wishes.

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Anu

Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Asked by Anonymous - Oct 07, 2024Hindi
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Relationship
Mam i am a 52 year ols women i have never had a secure relationship only who wanted to have s.Marriage in proposals too dint work for me. At late 40 age i met a guy it was all good till start 1 year but since 3 years we just fight my fault to as i have no family no friends and all i have to look after 2 aged parents and i am deep involved my life is just that. This relationship is good to talk on phone as all i do is talk my problems 24 by 7 365 days which i understands upsets him. But i see no effort too from him for meeting planning dates and if i do i pay for it all he never pays . I lost interest felt disappointed after going on saying he never tries to make plans talk future his family finance. I am not sure what i should do stay or live my life alone which i was always doing.
Ans: Dear Anonymous,
Start fresh and if you had a clean slate, what would you want to draw on it?
All your miseries or what you actually want from life?
When you meet someone new and you dump your set of issues on them, how exactly do you think they are going to be interested in taking you out on a date?
Your prospective life partner is not a dumping yard for your life's problems BUT a person that is going to marry you and support you and who you can trust. And will you start this relationship by actually talking only about your problems? Honestly, you need to ask yourself if you will be interested in a guy who keeps ranting about all things going wrong...
Establish a connection by being on a positive ground and showing the other person that you care and also are interested in knowing about them. This interest will let them lower their guard down and actually connect with you at an emotional level and then you can pursue this as a potential life partner association...somewhere down the line, they will be genuinely interested in being a part of your challenges and that's when you make them your strength to solve these challenges. Am I making sense to you?
Do you see how you have been sabotaging your own future? Dust yourself, become genuinely interested in people not to dump your problems on them but to make a genuine connection and watch how things change for you. Prioritize your life not your problems!

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  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Relationship
Hi, I am a 36yo guy. Married and have 2 beautiful kids. I am a naturally happy person in life and have achieved reasonable success through my hard work. From last 3 years i am in love with a married girl who works at an office near my workplace. We two believe that we are best suited for each other in every aspect i.e. mental, emotional and physical. We share a great chemistry that we never felt with our respective spouses. We decided that we both cant leave our spouses because of our kids. But very often she keeps on getting crazy and tortures and taunts me that i love my wife more and doesnt give value to her. She is mostly unhappy about this in her life and many times abuses me when she sees that i am a naturally happy and content person. I have even told her that if she wants we can take divorce from our spouses and move-in together. But she never accepts that also and keeps on making my life hard. But i do believe that we both love each other like crazy and my sexual life with her is just out of this world. I have a very high libido and she satisfies me like no other girl. My question is how can i make her sane and make her trust me that i am more inclined towards her?
Ans: Dear Avinash,
I am sure by now you realize that having parallel lives is not easy. Maybe you are at that stage where a decision must be made...
You owe at least that much to your respective spouses who have nothing to do this life of yours...

The lady in question wants the cake and wants to eat it too...obviously she needs to see that if she wants her marriage, then you are going to keep your marriage as well and with that all the insecurities that arise must also be accepted as this is something that the two of you got into willingly...did she not know that a relationship outside of marriage comes with its set of challenges like insecurities, doubts, fears, instability and more? I guess it's not about you making her sane and trust you BUT for the two fo you to come to some sort of a decision on where all this is leading?

Again, I say this...leading two lives in parallel ain't easy; especially on an emotional level!

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

Anu

Anu Krishna  |1201 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 15, 2024

Asked by Anonymous - Oct 01, 2024
Relationship
Hi Anu, I have been reading since long the advices you give to others expecting that there can be an identical issue which i am suffering, i am 48yrs and my wife 42yrs married for 22yrs & having grown up children, over period of time my wife has become more dominating expecting me to listen and follow everything what she says, everything was going fine for until last six years when she was following me as a dutiful wife, since last 6-7yrs she is disinterested in sex also, i sit and speak with her trying to address all the issues, but things get back to ZERO within days, she has turned very short tempered and egoistic, shouting and using foul language in rage at times, we both are highly educated and give lectures at college with limited reasonable income, the problem is she compares her life to others and disturbs our life, ours is a marriage against parents so both the side relatives are little indifferent and we are not extroverts or that persons who are outgoing to change all that, we just lead our life within ourselves and try to help the relatives whenever they come to us. My question is that is it not cruel for a wife to deprive the husband of sex and develop unreasonable expectations comparing the lifestyles of others. when at peace my wife suggests that i can look outside for sex and she is ok with it but i don't believe in it and in her words, at times in rage she keeps asking for divorce uttering foul language, i keep reminding her that emotions, anger and rage shall only aggravate the issues we should know what we actually want and seek it speaking to each other, i feel that my wife doesn't know what she wants from herself or from me or from life, Anu, Is this all that pre-menopause frustrations which is building up or is it some mental issues which are surfacing due to negligence from me or our relatives? Please suggest? Thank you
Ans: Dear Anonymous,
Let's understand it in 3 ways..

1) Whether your wife is in pre-menopause or perimenopause or menopause stage can be determined only by a doctor. A lot of material floats on the internet convincing people of one over the other BUT it's important to get it validated by a doctor that will help your wife understand what is going on with her body and how it impacts her mind...

2) It is also possible that the current sex routine maybe boring to her and infusing it with some spice can get things going? So, think out of the box here...

3) Also, you might want to think if the emotional bond between the two of you has broken down; women respond to sex easier when they feel emotionally connected and safe with their man...

What will be useful in your situation is: to reconnect with her and aim to connect with her emotionally. This will help her in conveying to you what might be the problem and then it gets easier to solve it or take necessary steps...

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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