Do I shift my monthly investment from VPF to NPS after 15 years?

Ans: Every person should have mix basket of Investment with some portion of secured investment. PPF+NPS - still one of the best secured and constant growing investment avenue.

Ans: Analyzing Your Current Investments and Future Strategy
Overview of Your Investments
Your disciplined approach to investing at the age of 28 is impressive. Your current investments include:

Public Provident Fund (PPF): ?1,50,000 per annum
National Pension System (NPS): ?1,50,000 per annum
LIC Jeevan Anand: ?53,000 per annum
HDFC Balanced Advantage Fund: ?8,00,000 (lump sum)
Sundaram Aggressive Hybrid Fund: ?2,00,000 (lump sum)
SIP: ?5,000 per month
Compliments on Your Financial Discipline
Your commitment to a mix of retirement savings, insurance, and mutual funds shows strong financial planning. Investing early will help you build a significant corpus over time.

Evaluating Your Current Portfolio
PPF:

PPF is a safe and tax-efficient investment with guaranteed returns.
It offers good long-term returns but lacks liquidity.
NPS:

NPS provides market-linked returns and additional tax benefits.
It is an excellent choice for retirement planning with a mix of equity and debt exposure.
LIC Jeevan Anand:

This policy offers insurance coverage and savings benefits.
However, returns are generally lower compared to other investment options.
HDFC Balanced Advantage Fund:

Balanced Advantage Funds dynamically allocate between equity and debt.
They provide balanced risk and return, suitable for medium to long-term goals.
Sundaram Aggressive Hybrid Fund:

Aggressive hybrid funds invest predominantly in equity and the rest in debt.
They offer higher returns with moderate risk.
SIP of ?5,000:

Systematic Investment Plans (SIPs) in mutual funds are great for rupee cost averaging.
Regular investments help in building wealth over time.
Recommendations for Enhancing Your Portfolio
Increase SIP Investments:

SIPs offer the benefit of regular investing and compounding.
Increasing your SIP amount can significantly boost your long-term corpus.
Consider increasing your SIP by ?5,000 or more if your financial situation allows.
NPS Contributions:

Increasing NPS contributions enhances your retirement corpus with tax benefits.
However, it has limited liquidity and is locked until retirement.
Balanced Allocation:

Ensure a balanced allocation between equity and debt to manage risk.
Higher equity exposure is suitable given your young age and long investment horizon.
Review Insurance Policies:

Evaluate if your LIC Jeevan Anand policy meets your insurance needs.
Consider term insurance for higher coverage at lower costs, and invest the savings in higher return instruments.
Diversification:

Diversify your mutual fund investments across different fund categories.
Consider adding large-cap and mid-cap funds to spread risk and capture growth.
Regular Portfolio Review:

Periodically review and rebalance your portfolio based on market conditions and goals.
This ensures your investments remain aligned with your financial objectives.
Action Plan
Increase SIP Amount:

Boost your SIP in mutual funds to enhance long-term growth.
Start with an additional ?5,000 per month and increase gradually as your income grows.
Maintain NPS Contributions:

Continue with current NPS contributions for retirement planning.
Consider increasing contributions annually if you can afford it.
Review LIC Policy:

Assess the returns and benefits of your LIC policy.
If it’s not meeting your needs, consider switching to term insurance and reinvesting the difference.
Diversify Mutual Funds:

Add funds with different risk profiles to your portfolio.
This can help balance risk and reward.
Conclusion
You have a strong foundation with diversified investments and disciplined savings. Increasing your SIPs, balancing your portfolio, and regularly reviewing your investments will help you achieve your financial goals. Your proactive approach at a young age will ensure significant wealth creation over time.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

Please specify your current age so as to advise suitably.

Thanks;

Ans: Hello;

Interest on employee contribution to provident fund(EPF+VPF) in a financial year above 2.5 L is taxable after Budget 2021.

Hence it is recommended that you may divert your monthly investments into NPS tier-1 account.

You may select active choice and allocate maximum possible to equity and the rest between Govt securities and corporate bonds.

Note that withdrawals from NPS are highly restricted, before 60 age, being a pure retirement product.

The corpus accumulated in PF may be retained since it will continue to compound at the Interest rate.

Best wishes;