Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Ramalingam

Ramalingam Kalirajan  |6861 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 16, 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
Nilesh Question by Nilesh on May 09, 2024Hindi
Listen
Money

Hello Sir, I will be taking early retirement in August 24. My retirement corpus consist of NPS Rs. 32 Lakhs, PPF Rs. 20 Lakhs, ULIP Rs. 37 Lakhs, FD Rs. 3 Lakhs, PF Rs.55 Lakhs, Gratuity Rs. 6.25 Lakhs and other Deposits Rs.10 Lakhs, MF Rs. 7.5 Lakhs and Shares Rs. 2.5 Lakhs Total savings Rs.173.5 Lakhs plus one flat in Mumbai 4BHK ( Rs. 2.5 Cr) and Two flats in Vadodara. Amount Rs. 80 lakhs Liability of Home loan Rs. 36 Lakhs. Pl suggest is this sufficient Savings are sufficient for next 30 years.where to invest now as I am 56.5 years. Not much liabilities.

Ans: Retirement Corpus Assessment and Investment Strategy
Congratulations on your upcoming early retirement! Let's analyze your retirement corpus and devise an investment strategy to sustain your financial needs over the next 30 years.

Evaluating Retirement Corpus
Your retirement corpus comprises various assets, including NPS, PPF, ULIP, FD, PF, Gratuity, deposits, MFs, shares, and real estate holdings. Additionally, you have a home loan liability.

Retirement Corpus Breakdown:
NPS: ?32 Lakhs
PPF: ?20 Lakhs
ULIP: ?37 Lakhs
FD: ?3 Lakhs
PF: ?55 Lakhs
Gratuity: ?6.25 Lakhs
Other Deposits: ?10 Lakhs
MF: ?7.5 Lakhs
Shares: ?2.5 Lakhs
Total Savings: ?173.5 Lakhs
Real Estate Holdings:
Mumbai Flat (4BHK): ?2.5 Crores
Vadodara Flats: ?80 Lakhs
Total Real Estate Assets: ?3.3 Crores
Liabilities:
Home Loan: ?36 Lakhs
Assessing Sufficiency
Considering your retirement corpus and real estate holdings, along with liabilities, it's essential to determine if these assets are sufficient to sustain your lifestyle for the next 30 years.

Investment Strategy
Diversified Portfolio: Allocate your savings across various asset classes, including equities, debt, and real estate, to optimize returns while managing risk.

Debt Instruments: Given your age and risk profile, prioritize stable income-generating assets such as debt funds, fixed deposits, and PPF to provide a steady cash flow during retirement.

Equity Investments: While equities offer higher growth potential, consider a conservative allocation to equity mutual funds or blue-chip stocks to balance risk and returns. Avoid high-risk investments given your proximity to retirement.

Real Estate Management: Leverage your real estate holdings for rental income or consider selling properties to liquidate assets if necessary. Ensure rental income covers maintenance expenses and provides additional income during retirement.

Retirement Income Planning: Plan for regular withdrawal strategies from your retirement corpus to meet living expenses, healthcare costs, and other financial obligations during retirement. Consider inflation and taxation implications in your withdrawal planning.

Professional Advice: Consult with a Certified Financial Planner to tailor an investment strategy that aligns with your financial goals, risk tolerance, and retirement objectives. They can provide personalized recommendations and ongoing guidance to navigate your retirement journey successfully.

Conclusion
With prudent financial planning and strategic investment allocation, your retirement corpus and real estate holdings can provide financial security and sustain your lifestyle for the next 30 years. Seek professional advice to optimize your investment strategy and ensure a comfortable retirement journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
Asked on - Aug 21, 2024 | Answered on Aug 24, 2024
Listen
Thanks for your suggestion and advice. Will consult financial planner
Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!

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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |6861 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 21, 2024

Asked by Anonymous - May 20, 2024Hindi
Money
I am 44/F. I still have 14 years of service remaining but I want to retire early in the next 5 years. Our combined family savings per month in PPF & SSY Rs. 50 k, MF rs. 95000, PF & VPF Rs. 25000, LIC Rs. 3000 , NPS Rs. 8500. Apart from this we have a corpus of Rs. 1.10 crore in various post office and FD Schemes, stock and MF Rs. 52 L, accumulated PF rs. 50 L, PPF & SSY Rs. 28 L, LIC SURRENDER VALUE rs. 9.80 L. We have to spend Rs. 1.40 crore after 5 years for my 2 kids higher education. We are debt free and as on date apart from our residential house we have other properties valuing approx. 3.5 crore. Have sufficient mediclaim as well as term insurance. We want rs. 1.5 L as monthly income even after retirement. Please guide how much we need to save and where to invest the required amount.
Ans: Assessing Your Current Financial Situation
You are in a strong financial position with a healthy savings habit and diversified investments. Your goal of early retirement in 5 years with a monthly income of Rs 1.5 lakh is ambitious but achievable with careful planning. Let’s assess your current financial landscape to create a strategy that meets your objectives.

Existing Investments and Savings
PPF & SSY Contributions: Rs 50,000 per month

Mutual Fund Investments: Rs 95,000 per month

PF & VPF Contributions: Rs 25,000 per month

LIC Premiums: Rs 3,000 per month

NPS Contributions: Rs 8,500 per month

Accumulated Corpus:

Post Office and FD Schemes: Rs 1.10 crore
Stocks and Mutual Funds: Rs 52 lakh
PF: Rs 50 lakh
PPF & SSY: Rs 28 lakh
LIC Surrender Value: Rs 9.80 lakh
You have a diversified portfolio with a mix of conservative and growth-oriented investments. Your savings rate is commendable, and you are debt-free, which adds to your financial security.

Financial Goal: Funding Higher Education
Your immediate goal is to set aside Rs 1.40 crore for your children’s higher education in 5 years. Given your existing corpus and ongoing investments, this goal is within reach.

Current Savings: Rs 2.49 crore (including PPF, SSY, PF, LIC, stocks, and MFs)

Education Goal: Rs 1.40 crore in 5 years

Assuming your investments continue to grow at a moderate rate, you should be able to comfortably meet this goal by allocating a portion of your current corpus and future savings. Consider setting aside Rs 1.40 crore from your post office and FD schemes, which are safer but have lower returns. This ensures the funds are available when needed.

Early Retirement Planning
Your target monthly income of Rs 1.5 lakh after early retirement in 5 years requires careful planning. Here’s a breakdown of how much you need to save and where to invest:

Estimating the Required Retirement Corpus
To generate Rs 1.5 lakh per month for 30 years after retirement, you need a substantial retirement corpus. Assuming a conservative withdrawal rate and factoring in inflation, you’ll need approximately Rs 5.5 crore to Rs 6 crore.

Current Investments and Future Contributions
Let’s evaluate how your current investments and savings will contribute to your retirement goal:

PPF & SSY: Continue your Rs 50,000 monthly contribution. In 5 years, this should grow to approximately Rs 61 lakh, providing a stable and tax-free income.

Mutual Funds: Your Rs 95,000 monthly SIPs will grow significantly over the next 5 years. Assuming an average return, this can grow to around Rs 81 lakh, which can be a key source of your retirement income.

PF & VPF: Continuing with Rs 25,000 monthly contributions will grow your EPF corpus to around Rs 71 lakh. This provides a stable income source post-retirement.

NPS Contributions: Your Rs 8,500 monthly contributions will add up to a reasonable corpus of around Rs 10 lakh in 5 years. NPS offers an additional income stream with tax benefits.

LIC Policies: With a surrender value of Rs 9.80 lakh, consider evaluating if it’s better to reinvest this in a higher growth option. LIC policies often underperform compared to mutual funds.

Post Office and FD Schemes: Your Rs 1.10 crore in conservative schemes provides safety but low returns. Consider diversifying part of this into balanced mutual funds or debt funds for better growth with low risk.

Stocks and Mutual Funds: Your Rs 52 lakh investment in stocks and mutual funds can be rebalanced to align with your risk tolerance as you approach retirement. Consider shifting some equity exposure to balanced or hybrid funds to reduce risk.

Strategy to Achieve Your Retirement Goal
Based on your current assets and future needs, here’s how you can achieve your retirement goal:

1. Continue with Existing Investments:
Maintain your current SIPs in mutual funds. They provide growth and help you achieve your retirement corpus.

Keep contributing to PPF, SSY, and PF as they offer stable, tax-free returns.

Review your LIC policies. If they are underperforming, consider surrendering them and reinvesting the surrender value into mutual funds or debt funds.

2. Rebalance Your Portfolio:
Diversify your post office and FD investments. Consider allocating a portion to balanced mutual funds or debt funds, which offer better returns with moderate risk.

Reduce equity exposure as you near retirement. Shift some equity investments into balanced or hybrid funds to reduce volatility.

3. Building the Required Corpus:
Your goal is to accumulate Rs 5.5 crore to Rs 6 crore. Based on your current savings rate and existing corpus, this is achievable with disciplined investing.

Consider increasing your monthly contributions to mutual funds or NPS, if possible. This will boost your retirement corpus.

4. Withdrawal Strategy Post-Retirement:
Use a Systematic Withdrawal Plan (SWP) in mutual funds for monthly income. This provides flexibility and tax efficiency.

Utilize your PPF, SSY, and PF for stable income streams. They offer guaranteed returns and tax benefits.

NPS can provide additional monthly income through annuities, but consider using it as a secondary income source.

Final Insights
Your goal of early retirement with a monthly income of Rs 1.5 lakh is within reach. You are on the right track with your current investments and savings. Continue with disciplined investing, rebalance your portfolio as you approach retirement, and focus on accumulating the required corpus.

Consider consulting with a Certified Financial Planner to fine-tune your strategy and ensure you stay on course.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6861 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 18, 2024

Asked by Anonymous - Jun 17, 2024Hindi
Money
Sir, I am 38 years old and married and currently have no children or loan. I get a monthly income of Rs 75000/- out if which Rs 30000/-goes into monthly mutual fund sips. My monthly expenses are Rs 30000/-. I also transfer excess cash in an emergency fund when possible. I Invest Rs 50000/- each per year in NPS and PPF respectively and i have a mediclaim cover of Rs 10 Lakhs.I have 20 more years untill retirement. I would like to build a retirement corpus of Rs 2 crores. Kindly guide me as to how to go about it. Also is it recommended to open fixed deposits and if so then about how much worth should i open the same?
Ans: Your current financial strategy shows strong discipline and foresight. You are well on your way to building a substantial retirement corpus. Let's delve deeper into your financial situation and provide a comprehensive guide to ensure you achieve your retirement goal of Rs 2 crores in 20 years.

Current Financial Overview
Income and Expenses
Monthly Income: Rs 75,000
Monthly SIP Investment: Rs 30,000
Monthly Expenses: Rs 30,000
Surplus for Emergency Fund: Rs 15,000 (when available)
Annual NPS Contribution: Rs 50,000
Annual PPF Contribution: Rs 50,000
Existing Coverage and Investments
Mediclaim Cover: Rs 10 Lakhs
Emergency Fund: Accumulated over time
Time Until Retirement: 20 years
Assessing and Optimizing Your Strategy
Mutual Fund SIPs
Investing Rs 30,000 per month in mutual fund SIPs is commendable. This disciplined approach will benefit from rupee cost averaging and compound growth over time.

Advantages of SIPs:

Regular Investment: Ensures consistent contributions irrespective of market conditions.
Rupee Cost Averaging: Buys more units when prices are low and fewer when prices are high, averaging the cost.
Compounding: Returns reinvested grow exponentially over time.
Recommendation: Continue your current SIPs. Periodically review the performance and diversify across equity, debt, and hybrid funds to balance risk and returns.

National Pension System (NPS)
The NPS is a good choice for long-term retirement planning. Your annual contribution of Rs 50,000 benefits from tax deductions under Section 80C and 80CCD.

Advantages of NPS:

Tax Benefits: Reduces taxable income, providing immediate tax savings.
Retirement Corpus: Builds a substantial corpus with market-linked growth.
Annuity Option: Ensures a regular pension post-retirement.
Recommendation: Continue your NPS contributions. Consider increasing the amount gradually to maximize the retirement corpus and tax benefits.

Public Provident Fund (PPF)
PPF is a safe, long-term investment with assured returns and tax benefits. Your annual contribution of Rs 50,000 to PPF is a prudent choice.

Advantages of PPF:

Safety: Government-backed, providing guaranteed returns.
Tax Benefits: Contributions and interest earned are tax-free under Section 80C.
Long-Term Growth: Suitable for retirement planning due to the 15-year lock-in period.
Recommendation: Continue your annual PPF contributions. It ensures a risk-free portion of your retirement corpus.

Emergency Fund
Having an emergency fund is essential for financial stability. It should cover at least six months of living expenses to manage unforeseen events without liquidating investments.

Recommendation: Maintain and gradually increase your emergency fund to the desired level. Allocate the Rs 15,000 monthly surplus when possible to build this fund.

Building a Rs 2 Crore Retirement Corpus
Calculating the Required Monthly Investment
To build a retirement corpus of Rs 2 crores in 20 years, let's assume an average annual return of 10% from your diversified portfolio (a mix of equity and debt).

Steps to Achieve the Goal:

Evaluate Current Contributions: Calculate the future value of your existing SIPs, NPS, and PPF contributions.
Adjust Investments: Determine if additional monthly investments are needed to meet the target.
Review and Rebalance: Periodically review and adjust the portfolio to stay on track.
Example:

Current SIPs: Rs 30,000/month
NPS Contribution: Rs 50,000/year
PPF Contribution: Rs 50,000/year
Assuming a 10% annual return, calculate the future value of these investments over 20 years.

Importance of Diversification
Equity Mutual Funds
Equity mutual funds offer high growth potential but come with higher risk. Diversifying across large-cap, mid-cap, and small-cap funds can balance the risk.

Recommendation: Allocate a portion of your SIPs to equity mutual funds. Diversify across different types to capture growth while managing risk.

Debt Mutual Funds
Debt mutual funds provide stability and lower risk compared to equity funds. They are ideal for balancing the overall portfolio.

Recommendation: Include debt mutual funds in your SIP portfolio. They offer stable returns and act as a cushion during market volatility.

Balanced or Hybrid Funds
Balanced or hybrid funds invest in a mix of equity and debt instruments, providing growth potential with reduced risk.

Recommendation: Consider balanced funds to maintain a diversified portfolio with a balanced risk-return profile.

Fixed Deposits: A Conservative Approach
Fixed deposits (FDs) offer guaranteed returns and safety but generally lower returns compared to mutual funds. They are suitable for short-term goals and as part of an emergency fund.

Advantages of FDs:

Safety: Principal is secure with assured returns.
Liquidity: Can be easily liquidated if needed.
Predictable Returns: Ideal for short-term financial goals.
Recommendation: Allocate a portion of your emergency fund or short-term savings to FDs. Avoid over-reliance on FDs for long-term growth due to lower returns.

Tax Efficiency
Tax-Saving Instruments
Investing in tax-saving instruments like ELSS (Equity Linked Savings Scheme) can optimize tax benefits and contribute to wealth creation.

Advantages of ELSS:

Tax Deductions: Eligible for deductions under Section 80C.
Short Lock-In Period: Only a three-year lock-in compared to PPF.
Growth Potential: Equity exposure provides high growth potential.
Recommendation: Consider ELSS for tax-saving purposes and long-term growth. It complements your existing tax-saving strategies.

Monitoring and Rebalancing
Regularly monitoring and rebalancing your portfolio ensures it aligns with your financial goals and risk tolerance. Market conditions change, and so do your financial needs.

Recommendation: Review your portfolio at least annually. Rebalance if necessary to maintain the desired asset allocation and optimize returns.

Final Insights
Your current financial strategy is robust and well-structured. Investing Rs 30,000 monthly in SIPs, Rs 50,000 annually in NPS, and Rs 50,000 annually in PPF reflects a disciplined approach. To build a retirement corpus of Rs 2 crores in 20 years, consider the following steps:

Continue Current Investments: Maintain your SIPs, NPS, and PPF contributions. They form a solid foundation for your retirement corpus.
Diversify Portfolio: Include equity, debt, and balanced funds in your SIPs to balance risk and maximize returns.
Build Emergency Fund: Ensure your emergency fund covers at least six months of living expenses. Allocate the monthly surplus towards this fund.
Consider Tax-Saving Instruments: ELSS can provide additional tax benefits and growth potential.
Monitor and Rebalance: Regularly review and adjust your portfolio to stay aligned with your goals.
Fixed deposits can be part of your emergency fund or short-term savings but avoid relying heavily on them for long-term growth. By following these recommendations, you are on the right path to achieving your retirement goal of Rs 2 crores.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6861 Answers  |Ask -

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

Asked by Anonymous - Oct 15, 2024Hindi
Money
Am 41 yr old , earning 10-15 lakh per month with 2.5 lakh expense and 80 k emi which will b closed in 2 yrs , my asset 5 Cr asset in real estate ( 3 flat and 2 land ) , 50 lakh FD , total 2 lakh monthly mutual month investment now mutual fund total portfolio reached 60 lakh And around 1 Cr liquidabale high risk high return investment ( 20% earning diversified) Have 2 LIC one maturing in 2026 mature amount 25 lakh Another in 2030 30 lakh I wish to retire after 10 yrs Need retirement corpus of 20-25 Cr Am in right path ?
Ans: At 41 years old, with a monthly income of Rs 10-15 lakh and a desire to retire in 10 years with a corpus of Rs 20-25 crore, it’s essential to evaluate your current financial status thoroughly. You have already built a significant base of assets, but fine-tuning your strategy is crucial to ensure you reach your ambitious retirement goal.

Let’s break down your financial scenario step by step, assess if you are on the right track, and offer suggestions for improvement.

Your Financial Snapshot
Income: Rs 10-15 lakh per month
Monthly Expenses: Rs 2.5 lakh
EMI: Rs 80,000 per month, which will close in 2 years
Assets:

Real Estate: Rs 5 crore (3 flats and 2 plots)
Fixed Deposit: Rs 50 lakh
Mutual Fund Portfolio: Rs 60 lakh, with Rs 2 lakh monthly SIPs
High-Risk Investments: Rs 1 crore with 20% annual returns
LIC Policies: Rs 25 lakh maturing in 2026 and Rs 30 lakh maturing in 2030
Retirement Corpus Goal: Rs 20-25 crore in 10 Years
You aim to retire with Rs 20-25 crore in 10 years. It is an ambitious but achievable goal, given your income and current assets. However, the challenge lies in aligning your investments in a way that generates the necessary growth, with a balance between risk and returns. Here’s an evaluation of where you stand today and what adjustments may be needed.

Assessing Your Current Assets
Real Estate: Rs 5 crore
You have invested Rs 5 crore in real estate, including three flats and two plots. While this is a substantial amount and adds to your wealth, there are some key considerations:

Liquidity: Real estate is generally illiquid. Selling property can take time, and real estate prices fluctuate based on market conditions. This makes it a less reliable source of immediate funds during retirement.
Cash Flow: Unless these properties are generating rental income, they won’t contribute to your regular cash flow in retirement. Rental income can supplement your retirement, but it’s unpredictable and subject to market dynamics.
Investment Perspective: For retirement planning, liquid and growth-oriented investments are more suitable. Real estate, while a valuable asset, may not provide the steady returns you’ll need during your retirement years.
Mutual Fund Portfolio: Rs 60 lakh + Rs 2 lakh Monthly SIP
Your Rs 60 lakh mutual fund portfolio is a strong foundation. With a monthly SIP of Rs 2 lakh, you are investing in a growth-oriented vehicle. Let’s assess its potential:

Growth Potential: Assuming a conservative 12% annual return over the next 10 years, your mutual fund portfolio could grow significantly. In 10 years, this could potentially accumulate Rs 4-5 crore. However, to reach your retirement target of Rs 20-25 crore, you’ll need to increase your SIPs gradually.
SIP Top-Up Strategy: One of the best ways to ensure your mutual funds keep pace with your retirement goal is by increasing your SIP contributions annually. With rising income and the closure of your EMI in two years, you can redirect these funds toward increasing your SIPs.
High-Risk Investments: Rs 1 crore (20% returns)
You’ve allocated Rs 1 crore to high-risk, high-return investments with a 20% return expectation. While this is impressive, relying too much on high-risk investments for retirement can be problematic.

Risk Consideration: High returns come with high risk. As you get closer to retirement, it’s essential to reduce exposure to volatile investments. You don’t want to jeopardize your retirement corpus by holding too much in high-risk instruments.
Rebalance Gradually: Over time, you should consider moving a portion of these funds into more stable, diversified mutual funds or hybrid funds. This way, you can safeguard your retirement corpus while still aiming for growth.
Fixed Deposit: Rs 50 lakh
A Rs 50 lakh fixed deposit provides security, but it won’t help you grow your corpus significantly.

Low Returns: FDs typically offer lower returns compared to other investment options. Over the long term, inflation erodes the purchasing power of FD returns.
Alternative Options: You might want to explore safer mutual fund categories, such as debt mutual funds, which offer better returns and tax efficiency than FDs.
LIC Policies: Rs 25 lakh in 2026 and Rs 30 lakh in 2030
You have two LIC policies maturing in 2026 and 2030, which will provide you with Rs 55 lakh.

Low Yield: Traditional LIC policies often provide returns lower than equity or mutual fund investments. While they offer security, the returns might not align with your retirement goal.
Post-Maturity Strategy: Once these policies mature, reinvest the proceeds into growth-oriented mutual funds or other higher-return instruments. This can boost your corpus further during the final stretch of your retirement planning.
Evaluating Your Progress
You have an excellent foundation for achieving your Rs 20-25 crore retirement corpus. Here’s a summary of your current progress:

Real Estate: Rs 5 crore (not a liquid retirement asset)
Mutual Funds: Rs 60 lakh with Rs 2 lakh monthly SIPs
High-Risk Investments: Rs 1 crore, growing at 20% per annum
Fixed Deposit: Rs 50 lakh
LIC Policies: Rs 55 lakh maturing in 2026 and 2030
The key areas of improvement include increasing your SIPs, reducing reliance on high-risk investments, and finding alternatives to low-yield investments like FDs and LIC policies.

Recommendations for Growth and Stability
Increase SIP Contributions
To meet your retirement goal, consider increasing your SIP contributions over time. This will help your portfolio grow faster.

Top-Up SIP Strategy: You could increase your SIP by 10-15% each year. For example, after your EMI closes in two years, you can divert the Rs 80,000 into additional SIPs. This strategy helps ensure your investments keep pace with inflation and your growing income.
Diversify High-Risk Investments
Your Rs 1 crore in high-risk investments is providing excellent returns, but you should not rely too heavily on it for your retirement corpus.

Reduce Exposure Over Time: As you near retirement, begin shifting a portion of these funds into more stable mutual funds or hybrid funds. This will reduce volatility in your portfolio while still providing growth.
Balanced Approach: A balanced approach with a mix of equity and debt mutual funds can provide both growth and stability. Aim for a portfolio that gradually becomes more conservative as you approach your retirement date.
Reconsider Fixed Deposits
Fixed deposits are safe but offer limited growth.

Shift to Debt Mutual Funds: You may want to move part of your FD savings into debt mutual funds, which can offer better returns and are more tax-efficient. Debt funds, particularly those with low credit risk, can provide stability and liquidity while outperforming FDs.
LIC Maturity Reinvestment
Once your LIC policies mature, reinvest the proceeds wisely.

Reinvest in Growth Funds: After 2026 and 2030, when your LIC policies mature, consider reinvesting the Rs 55 lakh into diversified mutual funds. This will help accelerate the growth of your retirement corpus during the final years of your working life.
Focus on Tax Efficiency
Your portfolio should also consider tax efficiency, particularly as you approach retirement.

Equity Mutual Funds: Gains above Rs 1.25 lakh are taxed at 12.5%. Plan your withdrawals accordingly to minimise taxes.
Debt Mutual Funds: Gains in debt mutual funds are taxed according to your income slab. These can still be more efficient than FDs due to indexation benefits over the long term.
Regular Review and Adjustments
Retirement planning is not a one-time exercise. You should regularly review and adjust your portfolio.

Annual Review: Sit down with a Certified Financial Planner each year to review your progress. This ensures that your investments are on track and that you’re making the necessary adjustments based on market conditions and personal changes.
Rebalancing: As your mutual fund portfolio grows, periodically rebalance between equity and debt to ensure your portfolio remains aligned with your risk tolerance and retirement goals.
Projecting Your Retirement Corpus
Based on the current investments and a disciplined approach to increasing your SIPs, you are likely to accumulate between Rs 15-18 crore in 10 years. Achieving Rs 25 crore will require higher risk-taking or an extension of your retirement timeline by a few years.

However, your diversified portfolio, combined with regular reviews, can still provide you with a comfortable retirement if managed well.

Finally
You are on a strong path to retirement with your existing assets and investment plan. However, to ensure you reach your goal of Rs 20-25 crore, consider the following:

Gradually increase your SIPs to boost your mutual fund portfolio.
Diversify your high-risk investments over time to reduce volatility.
Move away from low-yield options like FDs, and reinvest LIC maturities into higher-growth funds.
Review your investments annually with a Certified Financial Planner to stay on track.
By following this strategy, you can confidently build a retirement corpus that ensures a secure and comfortable retirement.

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

..Read more

Latest Questions
Milind

Milind Vadjikar  |542 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 31, 2024

Milind

Milind Vadjikar  |542 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 31, 2024

Listen
Money
Sir My Age is 38 Now. Running Business In Pune city. Below are the My Assets & Liabilities. Current Values - Assets. Own Industrial Plot - Rs. 2.0 Cr Business Income Yearly Rs. 24.00 Lack Own Company Investment ( Machinery, Debtors Etc ) - Rs 2.40 Cr Mutual Fund & Share Market Investment Rs. 2.10 Cr Bank FD - Rs. 50.00 Lack Own 3 Flats in Pune - Rs. 75 lack, 50 Lack & 35 Lack ( Current Values ) Golds - Rs. 25.00 Lack Land - Agriculture - Rs. 50.00 Lack Term Insurances - Rs. 20.00 Lack ( Till Date Premium Paid ) Labilities. House Loan - Rs. 30.00 Lack ( EMI 26500.00 PM ) Loan will close after 17 years. Car Loan - Rs. 6.35 lack ( EMI 12500.00 PM ) Loan will close after 5 years. This Assets & investment sufficient for maintain 7 family members Expenses after retirement ? ( 4 Adult + 3 Children (Below 5 Years) ). I will retire at the age of 45.
Ans: Hello;

What is the expected monthly rental from industrial plot and machinery?

Are you currently occupying one of the flats mentioned here or are all of them given on rent?

Also your term life insurance is very low. You should have minimum term insurance cover of 2.4 Cr.

You have good assets in agri land, industrial land, gold, real estate but they are relatively illiquid when need arises hence term insurance cover with riders for critical care and accident benefit are an absolute must!

Considering the home loan tenure of 17 years and 3 small kids in the family to be supported for education and decent lifestyle, I am not sure if you can retire in 7 years timeframe from now.

However I would appreciate your reply to my queries above, before I give my firm view about your retirement in 7 years timeframe.

Best wishes;

...Read more

Radheshyam

Radheshyam Zanwar  |1013 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Oct 31, 2024

Milind

Milind Vadjikar  |542 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 31, 2024

Asked by Anonymous - Oct 30, 2024Hindi
Listen
Money
I have around 1 crore to invest. I am 61 years old retired defence officer and pension amounting to around ?1,50,000/- per month and medically covered. Need some sound investment plan for 1 crore. Don't have any liabilities?
Ans: Hello;

You may invest your corpus into following two funds in proportion of 50:50,

1. Kotak Arbitrage fund (low risk)
You may consider modest return of 6% from this scheme.

2. ICICI Pru equity savings fund (low to moderate risk). You may consider modest return of 8% from this scheme.

Theses investments will retain purchasing power of your corpus aginst inflation and deliver some real returns too with low to moderate risk.

This is in accordance with your age and commensurate risk appetite.

Happy Investing;

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

...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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x