50-year-old with 40LPA income seeks retirement advice

Ans: You have a strong financial foundation. You are close to retirement and need a solid plan.

Below is a detailed assessment and recommendations for a secure future.

Income and Cash Flow
Your current annual income is Rs. 40 lakh. This is strong for savings and investment.

Rental income of Rs. 90,000 per month is good. This will be helpful post-retirement.

Your wife is working. Her income will provide additional security.

Post-retirement, rental income and investment returns will support your expenses.

You need to estimate your monthly expense needs for the next 30+ years.

Existing Assets
Real Estate: 3 rental properties + 1 self-occupied flat + 1 site worth Rs. 90 lakh.

Fixed Deposits (FDs): Rs. 12 lakh.

Mutual Funds (MFs): Rs. 15 lakh.

Insurance-linked investments: Rs. 21 lakh.

Sovereign Gold Bonds (SGBs): Rs. 10 lakh.

Provident Fund (PF): Rs. 20 lakh.

Savings Bank (SB) Account: Rs. 40 lakh.

Health Insurance: Rs. 10 lakh floater.

Key Observations
You have significant wealth, but most of it is in real estate.

Rental income is good, but liquidity is low.

Only Rs. 15 lakh in mutual funds. This is low for long-term wealth growth.

Insurance investments may not be giving good returns.

Rs. 40 lakh in a savings account is not efficient.

You need more liquid and growth-oriented investments for retirement.

Action Plan Before Retirement
1. Liquidity and Emergency Fund
Keep at least 2 years of expenses in liquid assets.

Your FD + SB account has Rs. 52 lakh.

You can keep Rs. 15-20 lakh in a liquid fund or FD for emergencies.

Rest should be invested wisely for better returns.

2. Restructure Investments for Better Growth
Mutual funds should form a major part of your corpus.

Increase allocation to mutual funds from your SB account balance.

Move part of your FDs to mutual funds for inflation-beating returns.

Ensure investments are well-diversified across equity and debt funds.

3. Review Insurance Investments
You have Rs. 21 lakh in insurance-linked investments.

Traditional insurance plans offer low returns.

If possible, consider surrendering and reinvesting in mutual funds.

4. Rental Income Strategy
Ensure your rental agreements are updated.

Keep properties well-maintained to avoid tenant vacancies.

Check if you need to sell one property for better liquidity.

5. Retirement Income Planning
You need to generate income post-retirement from your corpus.

Systematic Withdrawal Plans (SWP) in mutual funds can help.

Debt funds and balanced funds will provide stable returns.

Ensure your portfolio is designed for both growth and safety.

6. Tax Planning
Post-retirement, tax-efficient withdrawals are important.

Rental income and mutual fund SWPs should be planned to reduce tax burden.

Take advantage of tax-saving investment options even after retirement.

7. Health and Life Insurance
You have Rs. 10 lakh health insurance. Ensure it covers critical illnesses.

Consider a super top-up plan for additional medical security.

If you have life insurance, assess if it is still needed post-retirement.

Finally
You are in a strong position, but real estate dominates your portfolio.

You need to move more funds into mutual funds for liquidity and growth.

Restructure insurance investments to avoid low returns.

Maintain enough emergency funds but don’t keep excess in savings accounts.

Plan your post-retirement income with a mix of rental, mutual funds, and fixed income options.

Optimize your tax strategy for withdrawals and investments.

Ensure your health insurance is sufficient for future needs.

A well-planned approach now will ensure a stress-free retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment