Dear Hemant Sir, I am 60 yrs old and just retired with no EMI, no commitment and no pension also. I have per month expense of 200,000 INR/month which needs to planeed wtih te following corpus : a) MF and Shares of value 96,00,000 as on date. I take 20 K per month from this on SWP B) FDs in banks of value 200,000,00 INR and take quarterly interest payout @ 7% C) Have PPF of 17,00,000 where no action d) ULIP of 18,00,000 where I am not taking anything e) Gets 18000 per month from rent out property f) PF of 84,00,000 so far and not taking interest out. I do still lack the target 200,000 INR per month. Please advise where the best place is to withdraw.

Ans: You have managed your wealth carefully. Your savings across assets are good. Many retirees of your age face loan burden. You are free from EMI. This is a strong position. Now the task is to make your Rs.2,00,000 monthly need secure and sustainable. Let me explain step by step from a 360-degree view.

» Understanding your monthly shortfall

Your monthly need is Rs.2,00,000.

You already draw Rs.20,000 from mutual fund SWP.

You get Rs.18,000 from rent.

You also earn quarterly interest from fixed deposits.

You are not touching PF interest, PPF or ULIP now.

Still, there is a shortfall compared to your Rs.2,00,000 need.

The goal is to bridge this gap without harming long-term wealth.

» Assessing your mutual funds and shares

You hold Rs.96 lakhs in mutual funds and shares.

SWP of Rs.20,000 monthly is already set up.

This is about 2.5% annual draw, which is safe.

Actively managed funds are better than index funds.

Index funds lack flexibility and research-based risk control.

In retirement, stability is more important than passive tracking.

You may increase SWP carefully, but not too aggressively.

It is better to use mutual fund growth potential for inflation beating.

» Assessing your fixed deposits

Rs.2 crores in FDs with 7% payout is significant.

This alone gives you Rs.35 lakhs yearly, about Rs.8.75 lakhs quarterly.

That equals around Rs.2.9 lakhs per month on average.

This is more than your monthly need of Rs.2 lakhs.

However, FD interest is fully taxable.

So actual post-tax income will reduce.

Hence, FDs can cover a big part of your expenses, but tax impact must be planned.

» Assessing your PPF

Rs.17 lakhs in PPF is good.

PPF is safe, tax-free, and long-term.

You may keep it untouched for later.

It can act as a reserve in case of medical or family need.

» Assessing your ULIP

Rs.18 lakhs in ULIP is less efficient now.

ULIPs carry high costs and low flexibility.

They also don’t provide strong returns after charges.

It is wise to consider surrender of ULIP.

The maturity value or surrender value can be reinvested in mutual funds.

Mutual funds offer transparency, better performance, and more liquidity.

» Assessing your rental income

You receive Rs.18,000 monthly rent.

Rental yield is low compared to capital value of property.

Still, it is a stable and reliable income stream.

Keep it as supplementary income.

» Assessing your PF

Rs.84 lakhs in PF is a strong corpus.

Currently, you are not withdrawing from it.

PF earns interest, usually tax-free till maturity.

You may delay withdrawals to keep it growing.

Use this as a secondary reserve for later retirement years.

» Balancing your withdrawals

First layer: FD interest payout.

Second layer: Rent of Rs.18,000 per month.

Third layer: SWP of Rs.20,000 per month.

With these, you already cover a large portion.

If FD interest after tax is still short, then draw from mutual funds.

Avoid early withdrawals from PF or PPF.

Keep PF for future inflation years when expenses rise.

» Inflation adjustment strategy

Your expenses of Rs.2,00,000 today will rise in future.

FD interest will remain flat or reduce after renewal.

Mutual funds will help offset inflation with growth.

Hence, avoid over-relying on FDs alone.

Slowly shift some FD maturity into mutual funds.

This balances safety and growth.

» Tax efficiency planning

FD interest is fully taxable.

Rent is also taxable after deductions.

Mutual fund SWP is more tax-efficient.

New tax rule: equity mutual fund LTCG above Rs.1.25 lakh taxed at 12.5%.

STCG taxed at 20%.

Debt mutual fund gains taxed at your slab rate.

Still, compared to FD interest, equity MF SWP is better for taxes.

Hence, withdraw strategically between FD and MF.

Use FD interest for fixed expenses.

Use MF SWP for lifestyle expenses.

» Priority order for withdrawals

Continue FD interest as main income.

Add rent income without change.

Maintain current SWP but increase only if required.

Do not touch PF and PPF for now.

Exit ULIP and move money to mutual funds.

This new mutual fund amount can provide additional SWP later.

» Emergency and reserve planning

Keep at least Rs.15-20 lakhs as liquid reserve.

This should be in short-term debt funds or liquid FDs.

Use this only in emergencies like health or family need.

Avoid touching long-term PF or PPF for sudden needs.

» Medical and health protection

At age 60, health costs will rise.

You need health insurance if not covered.

Use FD interest surplus to pay premiums.

Build a separate medical buffer fund of Rs.10-15 lakhs.

This prevents breaking other investments during medical need.

» Family and legacy perspective

If your family depends on your income, plan with them in mind.

ULIP surrender proceeds into mutual funds will create better legacy value.

PF corpus should be preserved as long as possible.

This ensures both income security and inheritance benefit.

» Common mistakes to avoid

Do not redeem PF early for monthly needs.

Do not depend fully on FDs because of tax burden.

Do not increase mutual fund SWP too high.

Do not keep money locked in ULIP with poor returns.

Avoid index funds, as they lack research support in volatile markets.

Regular mutual funds through a CFP give active management.

» Finally
Your base income from FD, rent, and MF SWP already covers most of your need. The gap can be filled by restructuring ULIP and balancing tax-efficient withdrawals. PF and PPF can be left untouched now for future years when inflation pushes expenses higher. With careful planning, your Rs.2,00,000 monthly need is achievable without stress.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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