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Ramalingam

Ramalingam Kalirajan  |3200 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 16, 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
Biswaranjan Question by Biswaranjan on May 09, 2024Hindi
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Sir My monthly income 82k after all tax deduction.Now I have one sip value 1lakh 30k where I invest 13k/month, 3lic insurance where I invest 60k annual,one term insurance 50lakhs till the age of 65,one home loan I have which emi 25k and over 2039. I want to take retire age of 50 and how would I get 2lakhs per month after retirement

Ans: Retirement Planning and Investment Strategy
Planning for retirement at the age of 50 requires careful financial management and strategic investment planning to achieve your goal of generating ?2 lakhs per month post-retirement. Let's analyze your current financial situation and outline an investment strategy to meet your retirement income needs.

Current Financial Situation
Monthly Income: ?82,000
SIP: ?1,30,000 (?13,000 per month)
Life Insurance: ?3 lakh annual premium
Term Insurance: ?50 lakhs coverage till age 65
Home Loan EMI: ?25,000 per month (until 2039)
Retirement Goal
You aim to retire at the age of 50 and generate ?2 lakhs per month post-retirement. To achieve this, we need to assess your retirement corpus requirement and devise an investment strategy accordingly.

Retirement Corpus Calculation
Assuming you live until the age of 85 and accounting for inflation, you would need a substantial retirement corpus to sustain ?2 lakhs per month for 35 years post-retirement.

Investment Strategy
Increase Savings: Maximize your savings by reducing unnecessary expenses and allocating additional funds towards retirement planning.

Optimize Investments:

SIPs: Continue investing in SIPs, but consider diversifying across equity and debt funds to balance risk and returns.
Life Insurance: Evaluate the coverage and cost-effectiveness of your life insurance policies. Consider term insurance for pure protection and invest the remaining premium amount in instruments that offer better returns.
Term Insurance: Ensure your term insurance coverage adequately protects your family's financial needs in case of unforeseen circumstances.
Home Loan: While the home loan reduces your disposable income, it also helps build asset value over time. Continue timely payments to clear the debt by 2039.
Retirement Corpus Accumulation:

Estimate your retirement corpus requirement based on your desired post-retirement income and expenses.
Utilize online retirement calculators or consult with a financial planner to determine the required corpus.
Investment Allocation:

Allocate your investments across a mix of equity, debt, and real estate to achieve long-term growth and stability.
Consider tax-efficient investment options such as PPF, NPS, and tax-saving mutual funds to optimize returns and minimize tax liability.
Regular Review:

Periodically review your investment portfolio and make necessary adjustments based on changing financial goals, market conditions, and life circumstances.
Seek professional guidance from a Certified Financial Planner to ensure your retirement plan remains on track and aligned with your objectives.
Conclusion
With a disciplined savings approach and strategic investment planning, you can work towards achieving your retirement goal of generating ?2 lakhs per month post-retirement. Start early, stay focused on your financial objectives, and seek expert advice to navigate your retirement journey successfully.

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  |3200 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 13, 2024

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Sir I am 37 years old, and at this age I have 3 flats 2 in new Mumbai one in Mumbai, all appxoo cost would be around 2.5 cr , I have invested in stock also and mutual SIP is also going on, my present source of income from flats is 50k around, I want to retire at the age of 45 and need 2 lakhs per month income, can u pls guide me.
Ans: At 37, envisioning retirement at 45 exemplifies your forward-thinking mindset. Let's chart a strategic roadmap to ensure a seamless transition into financial independence while leveraging your existing assets and investment avenues.

Assessing Your Asset Landscape
Your real estate holdings, valued at approximately ?2.5 crores, serve as a robust foundation for wealth accumulation. Complementing these assets are your stock investments and ongoing mutual fund SIPs, reflecting a proactive approach towards wealth creation.

Maximizing Rental Income
Your rental income of ?50,000 from three flats is a valuable income stream. Explore avenues to optimize rental yields, such as property enhancements, strategic tenant selection, or rental adjustments aligned with market trends, to bolster your monthly cash flow.

Strategic Investment Planning
Continue nurturing your stock portfolio and mutual fund SIPs to capitalize on long-term growth opportunities. Embrace a diversified approach, balancing high-growth potential stocks with stable mutual funds to mitigate risks and enhance returns.

Targeting Retirement Income
To achieve a monthly income of ?2 lakhs post-retirement, meticulous planning is paramount. Calculate your desired corpus considering inflation, lifestyle expenses, and investment returns. Aim for a balanced mix of growth-oriented and income-generating investments to sustain your desired income level.

Embracing Tax-Efficient Strategies
Optimize tax efficiency across your investment portfolio by leveraging instruments like Equity Linked Saving Schemes (ELSS), tax-saving mutual funds, and tax-exempt bonds. Maximize deductions and exemptions to minimize tax liabilities and preserve your retirement corpus.

Contingency Planning and Risk Mitigation
Prepare for unforeseen circumstances by establishing an emergency fund equivalent to 6-12 months of living expenses. Secure adequate insurance coverage, including health, life, and property insurance, to safeguard against potential risks and preserve your financial well-being.

Engaging with a Certified Financial Planner
Collaborating with a Certified Financial Planner (CFP) will provide personalized guidance tailored to your retirement aspirations and financial goals. A CFP will craft a comprehensive retirement plan, integrating investment strategies, income sources, and risk management techniques to ensure a smooth transition into retirement.

Seizing Your Financial Freedom
Your proactive approach towards retirement planning is commendable. By leveraging your existing assets, nurturing investment avenues, and seeking expert guidance, you're on track to realize your dream of early retirement with financial abundance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |3200 Answers  |Ask -

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

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Hi All, I earl 1.5L per month in that I Pay 40K for Flat Loan and 25K for Land Loan. And coming to Savings I pay for SSY (8K/month) and PPF(8k/month) and 6 K in SIP(ICICI-Growth Debit,HDFC-Hybrid, SBI Small Cap-Growth Equity, Nippon-Growth Equity, Tata Money--Growth Debit & Edelweiss -Growth Debit 1k each current balance is 48K with XIRR16.07% using Zerodha App) I am 40 now. I want to retire between 50-55 and want to have 1Cr . I have a baby boy and girl age 7 years. So I want to plan my retirement and sooth balance. Openly whenever I keep money in SIP i used to with draw due to some financial issues my bad.
Ans: I must say, you're doing a remarkable job juggling your financial responsibilities while planning for your retirement and securing your children's future. It's never easy, but with the right strategy, you're on the path to financial freedom.

Understanding Your Current Financial Situation

Your monthly income of ?1.5 lakh and expenses towards loan repayments and savings highlight your commitment to securing your future. It's evident that you're making prudent financial decisions, despite facing occasional challenges.

Assessing Your Retirement Goals

Your aspiration to retire between the ages of 50-55 with a corpus of ?1 crore reflects a clear vision for your future. Considering your current age of 40, you have a strategic window of opportunity to achieve this goal through disciplined savings and investments.

Analyzing Your Investment Portfolio

Your investment portfolio comprising SIPs, SSY, and PPF demonstrates a diversified approach towards wealth accumulation. However, your past tendency to withdraw from SIPs due to financial exigencies underscores the importance of building a robust financial plan.

Strategic Approach to Retirement Planning

To ensure a smooth transition into retirement while securing your children's future, consider the following strategies:

Review and Revise: Regularly review your financial plan and make necessary adjustments to align with your changing life circumstances and goals.

Emergency Fund: Build an emergency fund to cover unforeseen expenses and mitigate the need to dip into your investments during emergencies.

Maximize Retirement Contributions: Increase your contributions towards retirement savings vehicles such as PPF, SSY, and additional SIPs to accelerate wealth accumulation.

Benefits of Actively Managed Funds

Actively managed mutual funds offer several advantages over passive index funds or ETFs:

Professional Expertise: Skilled fund managers actively monitor market trends and adjust portfolio allocations to capitalize on growth opportunities, potentially leading to higher returns.

Dynamic Allocation: Actively managed funds allow for dynamic asset allocation, enabling fund managers to respond swiftly to changing market conditions and optimize returns.

Disadvantages of Direct Funds

Direct funds require investors to research and select funds independently, which can be time-consuming and challenging for those with limited financial knowledge. Additionally, the absence of professional advice may result in suboptimal investment decisions and higher risks.

Benefits of Regular Funds Investing through MFD with CFP Credential

Investing in regular funds through a Certified Financial Planner (CFP) credentialled Mutual Fund Distributor (MFD) offers several benefits:

Professional Guidance: A CFP-certified MFD provides personalized investment advice tailored to your financial goals and risk profile, helping you make informed decisions.

Access to a Wide Range of Funds: MFDs offer access to a diverse range of mutual funds, including both actively managed and index funds, enabling you to build a well-rounded investment portfolio.

Final Words

Navigating the waters of retirement planning requires foresight, discipline, and strategic decision-making. By adhering to a well-thought-out financial plan and seeking professional guidance, you can sail smoothly towards your retirement goals while ensuring a secure future for your children.

Warm Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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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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