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Ramalingam

Ramalingam Kalirajan  |8285 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 30, 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
Anil Question by Anil on Nov 22, 2023Hindi
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Sir I have invested 2 CR in mutual fund and Now I need 10000 per month thru SWP as pension to survive is it possible how?

Ans: Implementing Systematic Withdrawal Plans (SWP) for Retirement Income
Congratulations on building a substantial corpus of 2 crores in mutual funds! Let's explore how you can generate a monthly pension of 10,000 rupees through a systematic withdrawal plan (SWP) to sustain your retirement lifestyle.

Understanding Systematic Withdrawal Plans (SWP):

SWP allows investors to withdraw a fixed sum or a percentage of their mutual fund investment regularly.
It functions akin to a pension scheme, providing a steady income stream during retirement while allowing the principal amount to remain invested for potential growth.
Determining Feasibility:

To sustain a monthly pension of 10,000 rupees, you'll need to calculate the withdrawal rate based on your corpus.
Considering a withdrawal rate of 0.5% per month (equivalent to 6% annually), the required corpus would be 20 lakh rupees.
With a corpus of 2 crores, generating a monthly pension of 10,000 rupees is achievable.
Implementing SWP:

Choose Suitable Funds: Select mutual funds that align with your risk tolerance, investment horizon, and income requirements for SWP.
Determine Withdrawal Frequency: Decide on the frequency of withdrawals (monthly, quarterly, or annually) based on your cash flow needs.
Set Withdrawal Amount: Determine the fixed amount you wish to withdraw each month (in this case, 10,000 rupees).
Initiate SWP: Submit a request with your mutual fund house to commence the SWP. Specify the withdrawal frequency and amount.
Monitor Performance: Regularly monitor the performance of your mutual fund investments and adjust the withdrawal amount if necessary to ensure it aligns with your financial needs and the fund's performance.
Managing Risks:

Market Volatility: Fluctuations in the market can impact the value of your investments and the sustainability of your SWP. To mitigate this risk, consider investing in a diversified portfolio comprising equity, debt, and balanced funds.
Inflation: Inflation erodes the purchasing power of your pension over time. To counter inflation risk, opt for a SWP amount that allows for periodic adjustments to account for rising living costs.
Longevity Risk: Ensure that your corpus can sustain your desired withdrawal rate for the duration of your retirement, considering potential increases in life expectancy and healthcare costs.
Consultation with a Certified Financial Planner:

Seek guidance from a Certified Financial Planner to assess your retirement income needs, risk tolerance, and investment strategy.
A financial planner can help optimize your SWP strategy, review your portfolio regularly, and make adjustments as needed to ensure financial security throughout your retirement years.
Conclusion:
Implementing a systematic withdrawal plan (SWP) can provide you with a reliable source of income during retirement, allowing you to enjoy financial independence and peace of mind. With proper planning, monitoring, and professional guidance, you can effectively manage your retirement finances and achieve your desired lifestyle goals.

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  |8285 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 08, 2024

Asked by Anonymous - May 04, 2024Hindi
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I retired in 2017.All the superannuation amount I invested in mutual fund & Now the corpse is 1cr 06 lakh.Now for rest 30 year or till I am alive I want to invest in SWP to get 1.30 lakh per month .How to do? Please suggest
Ans: It's great that you've accumulated a significant corpus through mutual funds. Here's how you can set up a Systematic Withdrawal Plan (SWP) to generate a monthly income of 1.30 lakh:
1. Evaluate Your Corpus: With a corpus of 1 crore 6 lakh, you aim to withdraw 1.30 lakh per month. This translates to an annual withdrawal of approximately 15.6 lakh.
2. SWP Calculation: Determine the frequency of SWP withdrawals. Since you're looking for monthly income, you'll set up a monthly SWP.
3. Withdrawal Amount: To calculate the monthly withdrawal amount, divide the annual withdrawal requirement (15.6 lakh) by 12 (months). This equals approximately 1.30 lakh per month.
4. Risk Tolerance: Assess your risk tolerance and choose funds accordingly. Since your investment horizon is long-term (30 years), you can consider a balanced approach with a mix of equity and debt funds.
5. Fund Selection: Select mutual funds that align with your risk tolerance, investment goals, and time horizon. Opt for funds with a track record of consistent performance and low expense ratios.
6. SWP Setup: Contact your mutual fund provider or financial advisor to set up the SWP. You'll specify the withdrawal frequency (monthly), withdrawal amount (1.30 lakh), and the source funds from which the withdrawals will be made.
7. Review Periodically: Regularly review your investment portfolio and withdrawal strategy to ensure it continues to meet your income needs and financial goals. Adjust the withdrawal amount if necessary based on market performance and changes in your financial situation.
8. Tax Implications: Be aware of the tax implications of SWP withdrawals. Equity funds held for more than one year are subject to long-term capital gains tax, while debt funds may attract tax based on the holding period and type of fund.
By following these steps and staying disciplined in your approach, you can create a reliable income stream to support your retirement lifestyle for the years to come. Consider consulting with a financial advisor to tailor the SWP strategy to your specific needs and circumstances.

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Ramalingam

Ramalingam Kalirajan  |8285 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 06, 2025

Asked by Anonymous - Feb 06, 2025Hindi
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My age is 40 and I have 40 lakh invest in mutual funds and planning to do swp to get monthly 20 thousand. Please help me is it correct approa
Ans: You have Rs. 40 lakh in mutual funds.

You plan to withdraw Rs. 20,000 monthly.

A systematic withdrawal plan (SWP) can provide steady income.

It should not deplete your corpus too soon.

A balanced strategy is essential.

Checking the Sustainability of SWP
The withdrawal rate should match returns.

High withdrawals can erode capital.

Market performance affects fund growth.

A mix of equity and debt is needed.

Debt funds provide stability.

Equity ensures long-term growth.

Asset Allocation for Stability
Avoid relying only on equity.

Allocate funds for long-term security.

Debt funds can handle short-term needs.

Equity funds grow wealth over time.

A mix of both balances risk and return.

Tax Implications of SWP
SWP in equity funds is tax-efficient.

Long-term capital gains are taxed at 10%.

Short-term gains are taxed at 15%.

Debt fund withdrawals attract slab tax.

Tax planning can reduce liability.

Adjusting SWP for Longevity
Increase withdrawals gradually.

Monitor portfolio performance.

Adjust allocation based on market cycles.

Avoid withdrawing more than growth.

Review plan every year.

Final Insights
SWP can work if planned well.

A balanced allocation is necessary.

Tax-efficient withdrawals save money.

Regular reviews keep the plan effective.

Aim for capital preservation with growth.

Your income should last for decades.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |8285 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 08, 2025

Asked by Anonymous - Feb 08, 2025Hindi
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Dear Sir, At present, I have Rs. 75,00,000/- in SB account. Can I earn Rs. 60,000/- per month through SWP, if I invest this amount in mutual funds.
Ans: You want to generate Rs. 60,000 per month from Rs. 75 lakh. This means you need Rs. 7.2 lakh per year.

The biggest challenge is ensuring the corpus lasts long. If the withdrawals exceed the growth rate, the money will deplete faster.

A well-planned Systematic Withdrawal Plan (SWP) must balance growth, risk, and longevity.

Key Factors to Consider Before Investing

Inflation Impact

Expenses will rise over time.
A higher withdrawal rate today can lead to shortfall later.
Your plan should account for increasing withdrawals in the future.
Investment Risk

Mutual funds carry market risk.
Equity funds may give higher returns but fluctuate.
Debt funds are stable but may not beat inflation.
A mix of both is better.
Tax Efficiency

SWP from equity funds after one year has lower tax impact.
LTCG above Rs. 1.25 lakh is taxed at 12.5%.
Debt fund SWP is taxed as per your income slab.
Tax-efficient withdrawals increase corpus sustainability.
Longevity of Corpus

If your investments grow at 10% and you withdraw at 9%, funds may last long.
If growth is 8% but withdrawals are 12%, corpus may deplete soon.
A sustainable withdrawal rate is key.
Can Rs. 75 Lakh Sustain Rs. 60,000 Monthly?

If Growth is Low (6-8%)

The corpus may last for 12-15 years.
This may not be enough for long-term needs.
If Growth is Moderate (10-12%)

The corpus may last over 20 years.
A balanced approach is needed.
If Growth is High (Above 12%)

Higher returns can extend corpus life.
But market fluctuations will impact withdrawals.
Better Approach to Ensure Sustainability

Start with a Lower SWP Initially

Instead of Rs. 60,000, start with Rs. 45,000-50,000.
This gives the corpus time to grow.
Rebalance Annually

Review fund performance.
Adjust withdrawals based on market conditions.
Mix of Equity and Debt

Keep 60% in equity for growth.
Keep 40% in debt for stability.
Keep a Buffer in Liquid Funds

Maintain 6-12 months of expenses in liquid funds.
This helps avoid withdrawing in a market downturn.
Tax-Efficient Withdrawals

Use long-term capital gains benefits.
Avoid unnecessary tax outflow.
Alternative Strategies for Income Stability

Dividend Option in Mutual Funds

Some funds provide regular dividends.
But dividends depend on market performance.
Part-time or Passive Income Sources

Rental income, freelancing, or part-time work can reduce withdrawal pressure.
This helps corpus last longer.
Final Insights

Withdrawing Rs. 60,000 per month is possible but may reduce corpus life.
A balanced strategy is needed to ensure long-term sustainability.
Reducing withdrawal amount initially will help.
Regular reviews and rebalancing are important.
A mix of equity and debt ensures growth and stability.
Keeping a liquidity buffer helps during market corrections.
With the right approach, you can generate monthly income while protecting your capital.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

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Hello Sir. My Son has got offer from follwing University.. 1)University of Padua - Italy (BSC - Information Technology) - 3 years Course 2)University Of Strathclyde - UK (BSC - HON Computer Science) - 4 yrs 3)Caledonian University of Glassgow - UK (Bsc Hons Computing). 4 yrs 4) National College of Ireland (BSC - HON Computer Science Engg) - 4 yrs We are confused to select the university / country
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First and foremost, thank you for getting in touch with us. I am glad to know that your son has received offers from the above mentioned universities. As an answer to your query, I would like to tell you that a prestigious and budget-friendly education in a lively Italian environment, along with a reputable academic standing and lower living expenses is offered at the University of Padua; its 3-year BSC - Information Technology may also provide a quicker path to higher education or jobs. Coming to the University of Strathclyde, top-ranked in the UK for Computer Science, this university is renowned for its linkages with industry, research possibilities, as well as outstanding student services, offering robust employment opportunities. Next, situated in a student-centric city with budget-friendly costs in comparison to other cities in the UK, Glasgow Caledonian University focuses on hands-on, industry-focused learning with impressive graduate employment rates. The National College of Ireland provides a small, contemporary campus in Dublin with robust ties with the technology sector, internships, and employment prospects in one of Europe’s key technology hotspots.

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EWS category rank female 30065 suitable NIT IIIT GFTI admission getting sir 2025
Ans: Rajeswari, Here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your admissions!

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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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