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Ramalingam

Ramalingam Kalirajan  |7948 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 26, 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
azad Question by azad on Nov 08, 2023Hindi
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how to go about the superanation fund of 18 lacs how to use safely for life time

Ans: Safely Utilizing a Superannuation Fund of Rs. 18 Lakhs for Lifetime Financial Security
Utilizing a superannuation fund of Rs. 18 lakhs requires careful planning to ensure lifelong financial security. Let's explore strategic approaches to manage this fund prudently.

Assessing Financial Goals and Needs
Understanding Long-Term Financial Objectives

Identify your long-term financial goals, including retirement lifestyle, healthcare expenses, and legacy planning.
Assessing Current Financial Situation

Evaluate your current financial position, including income sources, expenses, and existing investments.
Creating a Comprehensive Financial Plan
Holistic Financial Planning

Develop a comprehensive financial plan tailored to your unique circumstances, considering risk tolerance, investment horizon, and liquidity requirements.
Diversified Investment Strategy

Adopt a diversified investment strategy to mitigate risk and optimize returns. Allocate assets across various asset classes, including equities, fixed income, and alternative investments.
Utilizing the Superannuation Fund
Staggered Withdrawals

Consider staggering withdrawals from the superannuation fund to ensure a steady income stream throughout retirement.
Systematic Withdrawal Plans (SWP)

Implement a Systematic Withdrawal Plan (SWP) to periodically withdraw a predetermined amount from the superannuation fund, aligning with your cash flow needs.
Managing Investment Risk
Balanced Portfolio Allocation

Maintain a balanced portfolio allocation based on your risk tolerance and investment objectives. Adjust asset allocation periodically to rebalance the portfolio.
Avoiding Overexposure

Avoid overexposure to any single asset class or investment vehicle. Diversification is key to managing investment risk effectively.
Mitigating Longevity Risk
Longevity Planning

Plan for longevity by ensuring your retirement savings last throughout your lifetime. Consider factors such as inflation, healthcare costs, and lifestyle expenses.
Annuity Products

Explore annuity products as a potential option to provide guaranteed income streams in retirement. However, weigh the pros and cons carefully before making decisions.
Regular Portfolio Reviews
Ongoing Monitoring

Conduct regular reviews of your investment portfolio to assess performance, adjust asset allocation, and realign investment strategies as needed.
Professional Guidance

Seek guidance from a Certified Financial Planner (CFP) to navigate complex financial decisions and optimize your retirement income strategy.
Conclusion
Safely utilizing a superannuation fund of Rs. 18 lakhs for lifetime financial security requires a strategic and disciplined approach. By creating a comprehensive financial plan, managing investment risk, mitigating longevity risk, and seeking professional guidance, you can achieve financial stability and peace of mind in retirement.

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  |7948 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 19, 2024

Asked by Anonymous - May 18, 2024Hindi
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Hello Sir, I am 35 years old. I have 6 lacs in NPS and 1 fd of 5 lac saved uptill now. I manage to save around 1-2 lacs every year to add into these instruments. I have recently inhertited a large some of money i.e. 40 lacs in the last few months. I dont have the experience nor have the knowledge on how to handle this quantum.. Please advise on how do i deploy this fund. As a goal,i wish to retire by the time i am 45 with a corpus of 3 cr. Is this possible ? Please advice.
Ans: First, congratulations on your savings and recent inheritance. Managing a significant sum can be overwhelming, but with proper planning, you can achieve your financial goals.

You have 6 lakhs in the National Pension System (NPS) and a fixed deposit of 5 lakhs. These are good starting points.

You save around 1-2 lakhs annually, showing your commitment to building your financial future.

Evaluating Your Retirement Goal
You aim to retire by age 45 with a corpus of 3 crores. This is an ambitious yet achievable goal with disciplined investing.

Given your current age of 35, you have a 10-year horizon to build this corpus. Strategic investments are key to reaching this target.

Deployment of Inherited Funds
With 40 lakhs recently inherited, strategic allocation is essential. Here’s how you can deploy this fund:

Emergency Fund
Firstly, set aside a portion for emergencies. Having 6-12 months' worth of expenses in a liquid instrument is prudent.

Debt Instruments
A part of your funds should go into safe, debt instruments. This provides stability and ensures some safety net.

Actively Managed Equity Funds
Equity funds, especially actively managed ones, can potentially offer higher returns. They can outperform the market through strategic stock selection.

Hybrid Funds
Hybrid funds, which mix equity and debt, provide a balanced approach. They reduce risk while offering growth potential.

Diversified Portfolio
Ensure your portfolio is diversified across different sectors and asset classes. This reduces risk and improves potential returns.

Regular Investments and SIPs
Continue with your annual savings of 1-2 lakhs. Investing this regularly through Systematic Investment Plans (SIPs) can benefit from rupee cost averaging.

SIPs in diversified equity and hybrid funds can provide consistent growth and reduce market volatility impact.

Importance of Active Fund Management
Actively managed funds have professional managers aiming to outperform the market. Unlike index funds, they can adapt to market changes and select high-potential stocks.

This active management can lead to better returns over time, aligning with your goal of a 3-crore corpus.

Professional Guidance
Consulting a Certified Financial Planner (CFP) can provide tailored advice. A CFP can help you select suitable funds, monitor your portfolio, and make adjustments as needed.

Investing through a CFP ensures you benefit from expert guidance, crucial for achieving long-term goals.

Disadvantages of Index Funds
Index funds, while low-cost, simply replicate an index. They lack the flexibility to react to market conditions and can't outperform the index.

Actively managed funds, however, strive for better returns through strategic decisions and active asset allocation.

Reviewing and Rebalancing
Regularly review your portfolio to ensure it aligns with your goals. Market conditions change, and periodic rebalancing is essential.

A diversified portfolio with active management and regular reviews can help you stay on track to achieve your retirement goal.

Conclusion
With disciplined investing and strategic allocation of your inherited funds, retiring with a corpus of 3 crores by age 45 is possible.

Focus on a balanced and actively managed portfolio, and seek professional guidance for the best outcomes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7948 Answers  |Ask -

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

Money
One of my policy is getting matured i will get 10 lacs how can i use it for reinvestment options please
Ans: You have Rs 10 lakh maturing from one of your policies, and you're looking for reinvestment options. Let's explore the best ways to reinvest this amount to ensure optimal growth and financial security.

Understanding Your Financial Goals
Firstly, let's revisit your financial goals. You've mentioned wanting to accumulate a corpus of Rs 3 crore and securing enough funds for your two daughters' education and marriage. This means we need to focus on investments that offer good returns while also providing some stability.

Diversifying Your Investments
Diversification is crucial for balancing risk and reward. By spreading your investments across different asset classes, you can potentially earn higher returns while minimizing risk. Here are some key areas to consider:

Mutual Funds
Mutual funds are a great way to diversify your portfolio. They offer professional management and the ability to invest in a wide range of securities. Opt for actively managed funds rather than index funds. Actively managed funds have the potential to outperform the market because of the fund manager’s expertise.

You can start with a mix of equity and debt funds. Equity funds can provide higher returns over the long term, while debt funds can offer stability. A certified financial planner can help you choose the right mix based on your risk tolerance and investment horizon.

Systematic Investment Plans (SIPs)
Investing in mutual funds through SIPs allows you to invest a fixed amount regularly. This helps in averaging out the cost of investment and reduces the impact of market volatility. SIPs are a disciplined way to invest and can be aligned with your long-term financial goals.

Public Provident Fund (PPF)
PPF is a safe investment option with tax benefits. It offers a guaranteed return and the interest earned is tax-free. The PPF has a lock-in period of 15 years, but you can make partial withdrawals after 7 years. This can be a good addition to your retirement planning.

Sukanya Samriddhi Yojana (SSY)
Given that you have two daughters, investing in SSY can be a great option. This scheme offers a high interest rate and tax benefits under Section 80C. The maturity amount and interest earned are tax-free. It can be used for your daughters’ education and marriage expenses.

National Pension System (NPS)
NPS is another good option for retirement planning. It offers market-linked returns and tax benefits. The funds in NPS are invested in a mix of equity, corporate bonds, and government securities, which can help in accumulating a significant corpus over time. Since you already invest in NPS, consider increasing your contributions for better retirement benefits.

Avoiding Common Pitfalls
While reinvesting, it's important to avoid certain common pitfalls that can affect your returns.

Avoid ULIPs and Insurance-Linked Investments
ULIPs and insurance-linked investments often come with high charges and lower returns compared to mutual funds. If you hold any such policies, consider surrendering them and reinvesting the proceeds in mutual funds. Insurance should be kept separate from investments.

Avoid Direct Funds
Investing in direct funds might seem like a way to save on commissions, but it can be risky without professional guidance. Regular funds, invested through a certified financial planner, provide valuable advice and can help you navigate market complexities. The fees you pay are often worth the additional support and insights.

Regular Review and Monitoring
Regularly reviewing and monitoring your investments is essential. Financial markets are dynamic, and periodic reviews ensure that your investments remain aligned with your goals. A certified financial planner can help you with this, providing timely advice and adjustments.

Building an Emergency Fund
Before making any new investments, ensure you have an adequate emergency fund. This should cover 6-12 months of your expenses. An emergency fund provides a financial cushion in case of unforeseen circumstances like job loss, medical emergencies, or urgent repairs.

Tax Planning
Effective tax planning is crucial for maximizing your returns. Invest in instruments that offer tax benefits, such as PPF, NPS, and ELSS (Equity Linked Savings Scheme). This not only reduces your tax liability but also helps in growing your wealth.

Understanding Market Risks
While equity investments can provide high returns, they also come with higher risks. It’s important to understand your risk tolerance and invest accordingly. Diversifying across asset classes, as mentioned earlier, helps in managing these risks better.

Setting Up a Trust or Will
Since you’re planning for your daughters’ future, consider setting up a trust or drafting a will. This ensures that your assets are distributed according to your wishes and can provide financial security for your family.


Your proactive approach to managing your finances is commendable. It’s clear that you care deeply about securing a bright future for your daughters. Taking these steps will undoubtedly help you achieve your financial goals. Remember, every small step taken today builds a stronger financial foundation for tomorrow.

Final Insights
Reinvesting your Rs 10 lakh wisely can significantly boost your financial health. Focus on diversifying across mutual funds, PPF, SSY, and NPS. Avoid common pitfalls like ULIPs and direct funds, and ensure regular reviews of your portfolio. Build an emergency fund and plan for taxes effectively. Your dedication to securing a better future for your family is admirable. Stay the course, and you will achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Dear Kanchan .. Generally it happens to me, when I have to attend any hearing before courts/ Tribunal, I become more stressed till the hearing is completed. Please suggest
Ans: It’s entirely normal to feel stressed before court or tribunal hearings. These situations can be intimidating, and the anticipation of the unknown adds to the anxiety. But it’s crucial to manage this stress to ensure you perform at your best and protect your mental well-being.

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Have an open and heartfelt conversation with him. Let him know how his uncertainty makes you feel, without pressuring him for a commitment. This isn’t about forcing him to decide but about understanding each other’s emotional needs and boundaries. If he truly values the relationship, this conversation might give him a deeper perspective on how his indecision affects you.

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Asked by Anonymous - Feb 12, 2025Hindi
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My wife 55 is unable to cope up with death of our elder son aged 27 around 2 yrs ago and is always in deep regress remorse uninterested in any daily chores including sex. I wish to move on .. Suggest way out...
Ans: Two years might seem like a long time, but grief doesn’t follow a timeline. For some, it can take much longer to even begin the process of healing, especially when it involves the loss of a child. It’s not unusual for grief to cause a complete shutdown, and that’s likely what’s happening with your wife. She’s stuck in a cycle of regret and remorse, unable to find a way out.

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Encouraging her to seek professional help, such as grief counseling or therapy, could be a significant step. If she’s resistant, consider starting therapy for yourself first. Sometimes when one partner begins to heal, it opens the door for the other to consider healing too. Couples grief counseling could also provide a safe space for both of you to express your pain and find a way forward together.

Patience and understanding are crucial, but so is communication. Gently express to her how much you miss her presence and how you’re struggling too. Let her know you want to find a way to live again while still honoring your son’s memory.

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Hey, I am a freelance graphic designer based in Mumbai. I’m 40 and I've recently transitioned from a full-time job to freelancing, and I’m struggling to understand how to manage taxes on my variable income. My annual earnings are 8-15LPA approx. Are there any deductions specific to freelancers? Also, how should I plan for quarterly tax payments?
Ans: hi,
for this particular financial year you will be taxed under 2 heads ,1st under salaries for the period you were in job & for remaining part you will be taxed as business income being started freelancing work.

And for freelancers there is no any specific dedutions however all deductions available to all others are available to freelancers like 80C to 80G.

For calculation of taxation of freelancing period you should record all your receipts & expenses (only related to work, no any personal expenses) details with proper documentary evidences specially for expenses part, net of the (receipts & expenses) will be your income however you can opt for presumptive taxation also.

For Advance payment :-
if tax applicable to you during the finanical year as per calculations exceeds Rs 10000, then your have to pay advance tax quarterly as below
on or before 15th june :- minimum 15% or more of tax amount.
on or before 15th september :- minimum 45% or more of tax amount.
on or before 15th December :- minimum 75% or more of tax amount.
on or before 15th March :- full 100% tax payable as per calculations.
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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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