need some investment in insurance sector for tax saver fund

Ans: There are special bank FDs for 5 years which are called as tax saving FDs. They have same characteristics as any other 5 year FDs but are locked in for 5 years. Tax Saver Funds are the ELSS (Equity Linked Saving Funds) Mutual Funds which invest 100% in equity, are locked in for 3 years and will give market linked returns, which in general have been higher than bank FDs. ELSS are also tax efficient. You need to decide how much volatility are you prepared to take and then invest accordingly.

Ans: For tax-saving purposes, investing in insurance schemes might not be the most efficient option, especially considering your age. Insurance schemes typically offer lower returns compared to other investment avenues and may come with various terms and conditions.

Instead, consider investing in Equity Linked Savings Schemes (ELSS). ELSS mutual funds offer the dual benefit of tax-saving under Section 80C of the Income Tax Act and the potential for higher returns by investing primarily in equities. They have a lock-in period of three years, which is relatively shorter compared to traditional insurance policies.

ELSS funds have historically delivered attractive returns over the long term, making them a preferred choice for tax-saving investments, especially for individuals who are comfortable with market-related risks.

Before making any investment decisions, it's essential to assess your risk tolerance, investment goals, and overall financial situation. Consulting with a Certified Financial Planner can provide personalized guidance and help you select the most suitable investment options aligned with your needs and objectives.

Ans: You are 58 years old and live with your son.

You have Rs. 1.10 crores from an insurance claim.

You need a monthly income of Rs. 40,000 to Rs. 50,000.

You plan to use half for your expenses and half for your grandchildren’s future.

You want alternatives to fixed deposits for better returns.

Key Challenges to Address
Generating a steady and inflation-adjusted monthly income.

Protecting capital while ensuring consistent returns.

Managing healthcare and emergency expenses.

Creating wealth for your grandchildren without taking excess risk.

Avoiding investment mistakes that may reduce wealth.

Building a Stable Monthly Income
A mix of debt and equity investments is necessary.

Debt investments will provide stability.

Equity investments will help beat inflation.

Invest a portion in actively managed mutual funds through a Certified Financial Planner.

Choose funds with moderate risk and steady returns.

Use a systematic withdrawal plan (SWP) for monthly income.

Avoid index funds as they do not adjust for market conditions.

Investing in Debt Instruments for Stability
Keep a portion of funds in short-term debt mutual funds.

These provide stability with better returns than FDs.

Choose safe, high-rated bonds for fixed returns.

Consider tax-efficient investment options.

Avoid putting all money in bank fixed deposits.

Growing Wealth for Your Grandchildren
Allocate a portion to long-term growth investments.

Invest in equity mutual funds for high returns.

Choose flexi-cap and mid-cap funds through an MFD with CFP credentials.

Increase investments yearly to build a strong corpus.

Keep money growing instead of keeping it idle.

Planning for Healthcare and Emergencies
Maintain a separate fund for medical needs.

Ensure you have a good health insurance policy.

Keep some funds in a high-liquidity investment.

Avoid withdrawing from long-term investments.

Managing Risk and Asset Allocation
Do not take unnecessary risks with capital.

Diversify investments across different asset classes.

Adjust portfolio based on changing needs.

Review investment performance regularly.

Finally
Your financial future looks secure with proper planning.

Create a balanced investment portfolio for income and growth.

Choose investment options wisely to protect and grow wealth.

Consult a Certified Financial Planner for customised strategies.

Stay disciplined and monitor investments regularly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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