Hi sir very good morning. I have corpus of around one and half Cr, I am 65 yrs old wife age 57 with no any lability of children pls suggest how to get 1.25 lakh expense per month. No house rent but every year approx 3 lakh premium for health policy etc Thanks

Ans: Your current investments are well-diversified across various instruments. These include mutual funds (MF), Public Provident Fund (PPF), National Pension System (NPS), Fixed Deposits (FD), and National Savings Certificates (NSC). Additionally, you have significant investments in real estate through plots.

You and your wife both have substantial PPF and NPS investments, which is a good strategy for long-term savings and tax benefits. Your monthly expenses are Rs. 30,000, and you will need funds for your son's medical education from 2029 to 2034 and for your retirement.


Your diversified portfolio shows a good understanding of risk management. The regular contributions to NPS and PPF are commendable as they offer long-term benefits. Your investment discipline is evident from your systematic investment plans (SIPs) and regular savings.

Understanding Your Goals
Let's break down your financial goals into two primary categories:

Funding Your Son's Medical Education (2029-2034)

Retirement Planning

Funding Your Son's Medical Education
Your son's education is a short to medium-term goal. To meet this goal, you need to ensure liquidity and safety of principal.

Recommendations:

Continue Your SIPs: Keep your SIPs in mutual funds going. These will help accumulate a significant corpus over time.

Allocate a Separate Fund for Education: Consider creating a separate investment portfolio for your son's education. You could increase your SIP amount or start a new SIP specifically for this goal.

Invest in Debt Funds: Given the shorter time frame, consider debt mutual funds. They offer better returns than FDs and are more tax-efficient.

Recurring Deposits (RDs): RDs can also be considered for medium-term goals. They are safe and offer guaranteed returns.

Partial Withdrawal from PPF: Since your PPF accounts have substantial balances, you can consider partial withdrawals when required. PPF allows withdrawals after the 7th year.

Retirement Planning
Retirement planning is a long-term goal, and you need to ensure a steady income post-retirement.

Recommendations:

Increase SIP Contributions: If possible, increase your SIP contributions. Equity mutual funds are suitable for long-term goals due to their potential for higher returns.

Balanced Funds: Consider balanced or hybrid funds. These invest in both equity and debt instruments, providing a balance of growth and safety.

Review NPS Contributions: Your NPS contributions are excellent for retirement planning. Ensure that you and your wife continue contributing Rs. 5,000 monthly.

Systematic Withdrawal Plan (SWP): Post-retirement, use SWP from your mutual funds for regular income. SWPs provide a steady income stream and are tax-efficient.

Health Insurance: Ensure you have adequate health insurance. Medical emergencies can significantly impact your savings.

Evaluation of Current Investments
Mutual Funds (MF):

Your MF investments are Rs. 2,000,000 and Rs. 500,000 respectively. Continue these investments and consider increasing your SIPs if possible.
PPF:

Your PPF values are Rs. 1,500,000 and Rs. 2,100,000. PPF is an excellent long-term investment. Avoid withdrawing unless necessary.
NPS:

Both you and your wife have Rs. 500,000 in NPS with monthly contributions of Rs. 5,000. This is a good strategy for retirement savings.
FDs and NSCs:

FDs (Rs. 2,000,000 and Rs. 500,000) and NSCs (Rs. 1,000,000) are safe but offer lower returns. Consider shifting a portion to higher-yielding instruments like debt mutual funds or balanced funds.
Real Estate:

Your three plots valued at Rs. 1 crore are a significant investment. Real estate is illiquid, so avoid relying on it for immediate needs.

We understand the importance of securing your son's future and ensuring a comfortable retirement. Your careful planning and disciplined approach are commendable. Balancing current expenses, future education costs, and retirement savings can be challenging. However, with a structured approach, you can achieve your goals.

Adjusting Your Portfolio
Increase Equity Exposure:

For long-term goals like retirement, increasing equity exposure is advisable. Equity has the potential for higher returns, which can significantly enhance your retirement corpus.
Debt Allocation:

For your son's education, focus more on debt instruments to ensure safety and liquidity. Debt mutual funds, RDs, and PPF withdrawals can be effective.
Emergency Fund:

Maintain an emergency fund equal to 6-12 months of your monthly expenses. This fund should be in liquid instruments like savings accounts or liquid mutual funds.
Regular Review and Rebalancing
It's crucial to regularly review your portfolio and make necessary adjustments. Market conditions, interest rates, and personal circumstances change over time. Regular reviews ensure that your investments remain aligned with your goals.

Rebalancing Strategy:

Review your asset allocation annually. If equity markets perform well, your equity allocation may exceed your target. In such cases, consider shifting some funds to debt instruments.
Avoiding Common Pitfalls
Avoid Over-Reliance on Fixed Deposits:

While FDs are safe, their returns are often lower than inflation. Over-reliance on FDs can erode your purchasing power over time.
Diversify Within Mutual Funds:

Don't concentrate all your mutual fund investments in one category. Diversify across large-cap, mid-cap, and multi-cap funds.
Avoid High-Cost Insurance Products:

Avoid insurance products with high premiums and low returns. Focus on pure term insurance for adequate coverage and invest the rest in mutual funds.
Tax Planning
Effective tax planning can enhance your returns. Utilize all available tax-saving instruments.

PPF and NPS:

Both PPF and NPS provide tax benefits under Section 80C and Section 80CCD respectively. Maximize these contributions for tax savings.
Mutual Funds:

Equity mutual funds held for more than one year qualify for long-term capital gains tax at 10% for gains exceeding Rs. 1 lakh.
Health Insurance:

Premiums paid for health insurance qualify for deductions under Section 80D.
Final Insights
Your disciplined approach to savings and investments is praiseworthy. By fine-tuning your portfolio and aligning it with your goals, you can ensure financial security for your family. Focus on increasing your equity exposure for long-term goals and maintaining liquidity for short-term needs. Regular reviews and rebalancing will keep your investments on track.

Planning for your son's education and your retirement simultaneously is challenging but achievable with a structured plan. Continue your disciplined investment approach, and you will be well-prepared for both.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are 55 years old with Rs. 30 lakhs in your provident fund, Rs. 5 lakhs in PPF, and Rs. 2 lakhs in SIP investments. You also have a home and car loan totaling Rs. 20 lakhs. Your monthly salary is Rs. 1.10 lakhs, and you plan to retire in 5 years. You need Rs. 50,000 per month for expenses after retirement.

Strategy for Retirement Planning
Clearing Debts
Home and Car Loan:
Aim to clear these loans before retirement.
Use bonuses, increments, or surplus funds to pay down the principal.
Maximizing Savings
Provident Fund:

Continue contributions to maximize retirement corpus.
Public Provident Fund (PPF):

PPF is a safe investment with tax benefits.
Consider increasing contributions if possible.
Systematic Investment Plans (SIPs):

Maintain or increase SIPs in mutual funds.
Choose funds with good track records for growth.
Investment Options for Retirement
Debt Mutual Funds
Safety and Regular Income:
Invest in debt mutual funds for steady returns.
Ideal for generating regular income with low risk.
Balanced Mutual Funds
Mix of Equity and Debt:
These funds offer growth with moderate risk.
Good for long-term investments and stable returns.
Creating a Retirement Corpus
Monthly Savings and Investments
Consistent Investing:
Save and invest a portion of your monthly salary.
Focus on increasing your retirement corpus.
Diversified Portfolio
Balance Risk and Return:
Diversify your investments across various asset classes.
Include a mix of equity, debt, and balanced funds.
Generating Post-Retirement Income
Systematic Withdrawal Plan (SWP)
Regular Income:
Use SWPs from mutual funds for monthly income.
This provides a fixed amount regularly without depleting capital too quickly.
Monthly Income Plans (MIPs)
Steady Cash Flow:
Invest in MIPs for regular payouts.
These are suitable for generating a steady cash flow post-retirement.
Insurance and Health Cover
Adequate Coverage
Review Insurance:
Ensure your insurance coverage is adequate.
Personal insurance should cover major health expenses.
Health Insurance
Medical Expenses:
Maintain a comprehensive health insurance plan.
It will help manage medical costs post-retirement.
Final Insights
Clear Loans: Aim to pay off your home and car loans before retiring.
Increase Savings: Continue and increase your contributions to provident fund, PPF, and SIPs.
Diversify Investments: Invest in a mix of debt and balanced mutual funds.
Generate Income: Use SWPs and MIPs to generate a steady post-retirement income.
Review Insurance: Ensure you have adequate insurance coverage for unforeseen expenses.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hi,
Broadly, your expenses look on the higher side which is not helping your investments which is low at 25k per month. We advise to streamline your expenses to bring them down while simultaneously increasing the monthly investments. We think that 50k per month should be the base and you can strive to improve upon this on a Yearly basis
Best Regards,
Anil Rego,
Founder & CEO,
Right Horizons

Ans: Hello;

The PPF and MF corpus may be utilised towards higher education requirement of your kid.

After 5 years the cumulative corpus of these investments will be 65 L+.

The monthly rental income may be used to pay for spouse requirement of 20 K per month.

You may initiate a monthly sip of 50 K in a combination of pure equity mutual funds and top-up the sip amount by minimum of 16% each year.

By the end of 12 years you may have a corpus of around 3.56 Cr.

If you utilise this amount to buy an immediate annuity from a life insurance company, you may expect to receive a monthly income of
1.24 L (post-tax) assuming 6% annuity rate.

Do continue the personal family healthcare cover (Min 50 L) which can be helpful with advancement in age.

Any EPF/NPS corpus will serve as your warchest to fight inflation in retirement.

Happy Investing!!

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.