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Ramalingam Kalirajan  |7255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 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
Arvind Question by Arvind on May 13, 2024Hindi
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Very nice advice by you Sir,I really appreciate your approach to help the invester whatever his financial standing is. Actually I made a mistake in monthly Withdrawal amount as 300000 instead of Rs 30000. Please give me rough idea about the amount one should investin Balanced SWP fund to get rs 30000 per month

Ans: Systematic Withdrawal Plan (SWP):

Determining Investment Amount: The amount you need to invest in an SWP to get Rs. 30,000 monthly depends on various factors like:

Current corpus in the mutual fund scheme
Expected rate of return
Investment tenure (how long you plan to withdraw monthly)
Taxation on SWP Withdrawals: Yes, withdrawals from SWP are generally taxable.

Short-term Capital Gains (STCG): If you invested in the fund within the last year, withdrawals are taxed at your income tax slab rate.
Long-term Capital Gains (LTCG): If you invested for over a year in equity funds, gains exceeding Rs. 1 lakh per year are taxed at 10%.
Alternative: Monthly SIP from FD Income:

Potential Benefit: Investing your monthly FD income in SIPs can be beneficial for long-term wealth creation. Equity markets have the potential for higher returns compared to FDs. Actively managed funds involve experienced fund managers who try to pick stocks to outperform the market. Actively managed funds come with higher fees compared to passively managed funds.

Important Consideration: SIPs are for long-term investment horizons (typically 5+ years). Equity markets can be volatile in the short term.

Recommendation:

Consult a Certified Financial Planner (CFP): A CFP can analyze your situation, risk tolerance, and retirement goals. They can recommend the right investment approach (SWP or SIP) and suggest suitable mutual fund schemes.
Here's a quick example (not a recommendation):

Current Corpus: Rs. 50 lakh
Expected Return: 8%
Investment Tenure: 15 years
Based on these assumptions, you might need to invest a larger amount in an SWP to generate Rs. 30,000 monthly. However, this is a simplified example, and a CFP can provide a more accurate calculation.

Remember:

Focus on Long Term: Prioritize a long-term investment horizon for SIPs.
Tax Implications: Understand the tax implications of SWP withdrawals.
Professional Guidance: Consulting a CFP is recommended for a personalized retirement plan.
By consulting a CFP, you can develop a strategy that meets your income needs and maximizes your retirement savings!
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  |7255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 2024

Asked by Anonymous - Apr 23, 2024Hindi
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Hello Gurus. I am 45 years old and working in a private firm. I plan to retire in about 15 years. I have adequate amount of savings in PPF, EPF, FDs and some Mutual Funds. Can you suggest what amount i need to invest monthly/yearly in a good SWP, for a withdrawal of say Rs 60,000 a month after 15 years.
Ans: It's commendable that you're planning ahead for your retirement. Let's calculate the amount you need to invest regularly in a Systematic Withdrawal Plan (SWP) to achieve your goal of withdrawing Rs 60,000 per month after 15 years.

Firstly, we need to determine the future value of your monthly withdrawals. Using a retirement calculator or financial planning software, we can estimate the corpus required to sustain a monthly withdrawal of Rs 60,000 for your desired retirement period, accounting for inflation and potential investment returns.

Once we have the estimated corpus needed, we can work backward to determine the required monthly/yearly investment in a suitable investment vehicle with growth potential, such as equity mutual funds or a balanced portfolio, to accumulate that corpus over the remaining 15 years.

Given your existing savings in PPF, EPF, FDs, and Mutual Funds, we'll consider integrating the SWP strategy with your overall portfolio to optimize returns and manage risk effectively.

It's crucial to review and adjust your investment strategy periodically to adapt to changing market conditions, financial goals, and risk tolerance.

Consulting with a Certified Financial Planner will provide personalized insights and recommendations tailored to your specific circumstances, ensuring a robust retirement plan aligned with your aspirations and financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7255 Answers  |Ask -

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

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Sir,What amount I should investin SWP Equity to get monthly Rs 300000. I am retired n 62 years old.Are monthly withdrawals from SWP taxable.I have another idea.If I put my monthly income from Bank FD in monthly SIP,will it be beneficial?
Ans: Given your situation, I understand the importance of securing a stable income post-retirement. First, let me commend you on your proactive approach towards financial planning at this stage of life. It's crucial to ensure that your investments align with your financial goals and risk tolerance.

For generating a monthly income of Rs 300,000 through Systematic Withdrawal Plan (SWP) in equity, it's prudent to evaluate various factors. Considering your age and risk profile, investing entirely in equity might not be advisable. While equities offer potential for growth, they also come with higher volatility.

An alternative approach would be to adopt a balanced investment strategy, allocating a portion of your portfolio to equity and the rest to less volatile instruments like debt or hybrid funds. This can help mitigate risk while aiming for consistent returns.

Regarding the taxation of SWP withdrawals, equity-oriented mutual funds held for over a year are subject to Long-Term Capital Gains Tax (LTCG) of 10% exceeding Rs 1 lakh per annum. However, withdrawals up to Rs 1 lakh are exempt from LTCG tax. For withdrawals within this limit, only Dividend Distribution Tax (DDT) is applicable.

Now, let's address your idea of investing your monthly income from Bank FD into SIPs. While SIPs offer the benefit of rupee cost averaging and disciplined investing, relying solely on them may not be optimal.

Bank FDs typically offer lower returns compared to equity investments, especially considering inflation. By diversifying your investments across different asset classes, you can potentially enhance returns and manage risk more effectively.

However, it's crucial to consult with a Certified Financial Planner (CFP) to tailor an investment strategy that aligns with your financial objectives, risk appetite, and time horizon. A CFP can help you navigate through various investment options and craft a holistic financial plan that suits your needs.

In conclusion, while SWP in equity can provide a steady income stream, it's essential to diversify your portfolio and consider taxation implications. Additionally, exploring investment avenues beyond Bank FDs can help optimize returns over the long term.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 04, 2024

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Sir,I am Sreejith..I am looking to do an SWP for my father, who is 70 years old now, targeting a monthly withdrawal of Rs.10,000/-. The lumpsum amount intending to invest is Rs.8-9 lakhs. Is this possible with this amount to withdraw an amount of of Rs.10,000/-.per month? Which type of mutual funds are good for doing SWP ? Is it wise to do SWP in equity oriented funds like large cap, Mid cap,Flexi cap etc. Also is it good to do SWP in two mutual funds with the above Rs.8-9 lakhs. ?Sir, Iam expecting your valuable reply.
Ans: Systematic Withdrawal Plan (SWP) is an excellent way to ensure regular income during retirement. Given that your father is 70 years old, it's important to balance growth and safety. Let’s assess your situation to provide a 360-degree solution.

Assessing the Lumpsum Amount
Investment Corpus: You intend to invest Rs. 8-9 lakhs. This amount is crucial in determining the monthly withdrawal amount of Rs. 10,000.

Sustainability of SWP: With Rs. 8-9 lakhs, withdrawing Rs. 10,000 monthly could be challenging over a long period. Let's explore how this can be managed.

Understanding SWP in Different Mutual Funds
Equity-Oriented Funds: These funds, such as large-cap, mid-cap, and flexi-cap, generally provide higher returns. However, they are also volatile. While equity can provide inflation-beating returns, it might not be the best sole option for a 70-year-old.

Hybrid Funds: A balanced or hybrid fund combines equity and debt. This mix can provide growth with lower volatility. It’s safer for an SWP at your father’s age.

Debt Funds: These funds are safer and less volatile. They might not offer high returns but can provide stable income. They are often used for SWP by retirees to preserve capital.

Which Type of Mutual Funds Are Good for SWP?
Balanced Approach: Combining equity and debt funds can create a balanced portfolio. This approach offers both growth and safety.

Two-Fund Strategy: Splitting the Rs. 8-9 lakhs into two different funds can diversify risk. One fund could be a hybrid fund, and the other a debt fund. This combination can provide stability and growth.

Safety First: Considering your father's age, prioritise safety. The bulk of the investment should be in debt or hybrid funds. A smaller portion can be in equity to capture growth potential.

Is SWP in Equity-Oriented Funds Wise?
Risk Consideration: Pure equity funds can be risky for someone in retirement. Market fluctuations can affect the fund value, impacting the sustainability of the SWP.

Diversification: If opting for equity-oriented funds, ensure they are part of a diversified portfolio. Avoid putting the entire amount in high-risk funds.

Long-Term Growth: While equity can provide good returns, it’s crucial to balance it with safer options, especially when relying on the funds for regular income.

Practical Insights on SWP Execution
Withdrawal Sustainability: If you withdraw Rs. 10,000 monthly from Rs. 8-9 lakhs, the sustainability depends on the fund’s performance. In a conservative estimate, this might last for 8-10 years in a balanced portfolio.

Reinvestment of Gains: If the funds perform well, you can reinvest the gains to extend the SWP period. This requires regular monitoring.

Consulting a CFP: To ensure the strategy aligns with your father’s needs, consult a Certified Financial Planner. They can tailor the fund selection to match his risk profile and income requirements.

Final Insights
Balanced Portfolio: Prioritise a mix of equity and debt, leaning more towards safety due to your father's age.

Two-Fund Strategy: Split the investment into two different funds to diversify risk and ensure stable withdrawals.

Monitoring: Regularly review the performance of the funds. Adjust the SWP if required to maintain sustainability.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Anu

Anu Krishna  |1394 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Dec 12, 2024

Asked by Anonymous - Dec 10, 2024Hindi
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Relationship
Hi I am 50 yrs male married for last 20 yrs, facing domestic abuse mentally, physically from my wife, she is extremely aggressive and use foul language in front of our 13 yrs daughter, family members, friends, maid, driver... she is keep blaming me if anything went wrong be it is financial, Social and economical . She always blame my parents with very abusive language.. she always say negative things in front of my family members for all the things which went wrong due to her extraordinary aggressive and abusive behavior, she always make issues out of normal conversation.. she is also working. She doesn't talk and whenever i try to ignore her, she physically abusive and use foul language with me.. i am trying to adjust with her for the sake of my daughter future. She is very negative, if i try to help her, she will start shouting and use abusive language and start physically abusive towards me I don't know how deal with strange behavior... I am confused and worried, but due family, daughter and society i am tolerating her. Pls help and suggest best possible solutions
Ans: Dear Anonymous,
Has this started more recently or has it been going on for a while now? This is a good indicator to know if things were most;y like this or if any recent event has triggered this.
If it is a recent thing, I guess you could try and find out what exactly could have caused this. But if it is something that has been happening for a long time, the reasons could be any and many. Since there is also some physical abuse as you mentioned, kindly make an appointment with a professional who will be able to guide your wife through this challenging time. It possibly involves some unresolved things from the past which is making life currently difficult for all of you.
Work as a family unit together for her and not against her. It's going to make matters worse. She may refuse to go to a professional, then the only option left is for you to develop a lot of patience and deal with this adult to adult with her. No fights, quarrels with her but a lot of quiet conversations which she will initially resist but someday she will give in...So if you want the family to get back together in a healthy way, a lot also depends on how you are going to deal with the situation.

All the best!
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Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Ramalingam Kalirajan  |7255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 12, 2024

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Sir, I am a female private company employee would like to invest Rs 10,00,000 other than in FD's. Considering liquidity and risk pls advise me how to proceed with.
Ans: Your decision to explore alternatives to fixed deposits is commendable. It reflects a balanced approach to achieving better returns while maintaining liquidity and managing risk. Below is a detailed analysis and suggestions on how to proceed with your investment:

Diversified Mutual Fund Portfolio
Mutual funds are ideal for liquidity, risk management, and diversification.

Allocate funds to different mutual fund categories based on your risk appetite and investment goals.

Equity mutual funds: Invest 40% for high returns in the long term. They suit moderate to high-risk tolerance.

Hybrid funds: Allocate 30% to balance equity and debt exposure for stability. These are less volatile.

Debt mutual funds: Invest 30% to preserve capital and ensure liquidity. These offer lower risk.

Actively managed funds are better for growth as they outperform passive options.

Regular plans through an MFD with a CFP offer expert guidance and better fund selection.

Systematic Withdrawal Plan (SWP)
Use SWP for a steady cash flow if needed later.

Withdraw systematically without disturbing the principal.

This strategy maintains liquidity and provides tax efficiency.

Corporate Fixed Deposits and Bonds
Invest 20% in AAA-rated corporate FDs or bonds for better returns than bank FDs.

Ensure the issuer has a strong credit rating for safety.

These options provide fixed income and moderate liquidity.

Gold Investment for Diversification
Allocate 10% to gold through Sovereign Gold Bonds or Gold ETFs.

Sovereign Gold Bonds offer an additional annual interest of 2.5%.

Gold acts as a hedge during economic uncertainties.

Liquid Funds for Emergency Needs
Keep 10% in liquid mutual funds for emergencies or short-term goals.

These provide easy access to funds within 24 hours.

Returns are higher than savings accounts, ensuring better cash management.

Tax Efficiency
Equity mutual funds offer long-term tax benefits if held for over one year.

Debt mutual funds are taxed as per your income slab, but indexation reduces long-term taxes.

Plan withdrawals to optimise tax liability and maximise post-tax returns.

Insurance and Contingency Fund
Before investing, ensure adequate health and life insurance coverage.

Maintain a contingency fund covering at least 6 months of expenses.

This step ensures financial stability during emergencies.

Regular Monitoring
Review your investments quarterly with the help of a Certified Financial Planner.

Rebalance the portfolio based on market conditions and financial goals.

Regular tracking helps mitigate risks and ensures alignment with your objectives.

Avoid Common Investment Mistakes
Avoid direct funds due to the absence of expert advice and monitoring.

Stay away from speculative investments promising quick returns.

Avoid underestimating the importance of professional guidance in fund selection.

Align Investments with Goals
Define short-term, medium-term, and long-term financial goals.

Match investments with respective timelines for effective planning.

Ensure liquidity aligns with your specific needs, avoiding over-commitment to illiquid options.

Final Insights
Your investment should be a mix of growth and safety. Keep funds accessible when required while optimising returns. Diversify wisely and seek professional guidance for fund selection and periodic review. Stay focused on aligning investments with your goals and risk profile.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Anu

Anu Krishna  |1394 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Dec 12, 2024

Asked by Anonymous - Dec 10, 2024
Relationship
Hi doctor, I am 40 yrs old and my wife is 38 married for 14 yrs and have 1 kid who is 11 yrs old. We both are working and we only get to spend time on weekend and during weekdays we hardly get time to talk and see each other due to our shift timings. During weekend I do get urge to be intimate with her but she has lost interest and she doesn't have that urge to be intimate, we spoke about this multiple times and she agrees about this fact as we hardly get intimate once in 6 months or may be more than that. I do have that strong urge and don't want to cheat on my wife or go somewhere else to fullfill my sexual needs, but not sure if there can be any medication which will arouse her so that she can participate willingly in having sex. Even if we happen to get in to action she will just lie on the bed like dead with no emotions and she is constantly thinking of something else in her mind like what I need to cook for tomorrow, or did she do that work in office she will ask me to remind about something tomorrow as she has to do certain task, her mind is all over the place except in the act in the present moment, which really turns me off. Please need your help to save our relationship.
Ans: Dear Anonymous,
Intimacy for a man and women are very different and varied as well.
You cannot NOT connect during the week at an emotional level and then expect your wife to be excited to jump in bed. That's not how it works!
Both of you work which means weekends do get busy with household chores, children and more...there's very little time and energy left for intimate moments.
On your wife's part, she has not learned as yet to leave office work at the office but certainly what to cook for the next day is a huge task if this depends only on her. Why don't the two of you pitch in to distribute the household work between you? That way she does not feel burdened (if she does feel that way)...this also goes a long way in letting her know that you care and you want to help her...
You could also talk about how you can steal some moments after office and before you reach home by meeting at a cafe and sharing time over a cup of coffee. This definitely will make your wife feel more connected and emotionally secure which is a start point to easing of your sexual relationship.
Basically, get back to the dating scene and make your relationship a priority. A great sexual life is a product of the connection that a couple share outside the bedroom and the willingness on the part of the couple to make that happen.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Ramalingam

Ramalingam Kalirajan  |7255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 11, 2024

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I have 20 lakhs in my account and a house in my name. At present I am not earning. I have taken SBI Life smart wealth builder with installment of 1Lakh, for 12 years and premium payment term of 7 years. Applicable tax rate is 18%. I also invested in MF and taken a health insurance. I am thinking if it would be wise to continue with the SBI life. If I close SBI life and invest that in MF will it be beneficial for me? I have taken a break from my career due to health issues, and planning to continue with my job soon with an expected income of 40-50k. I am 50 years old. I need to take care of my son's (18 years) higher studies and plan for my retirement.
Ans: You are in a transitional phase with important financial goals. Let’s assess your options to make informed decisions.

Assessing SBI Life Smart Wealth Builder Policy
High Cost of Policy: The policy includes administration charges, fund management fees, and taxes of 18%.

Limited Returns: ULIPs often provide lower returns compared to actively managed mutual funds.

Lock-in Period: Your policy locks funds, restricting liquidity for immediate goals.

Surrender Value: Check the surrender value. Early surrender might lead to penalties and reduced returns.

Potential Benefits of Investing in Mutual Funds
Higher Returns: Mutual funds, especially actively managed ones, often outperform ULIPs over time.

Flexibility: You can withdraw funds based on your needs, offering better liquidity.

Diversification: Mutual funds provide exposure to different asset classes, reducing risk.

Cost Efficiency: Investing through a Certified Financial Planner minimises hidden charges and optimises returns.

Managing Your Rs. 20 Lakh Corpus
Emergency Fund: Set aside Rs. 5-6 lakhs in liquid funds or fixed deposits for emergencies.

Education Planning: Allocate funds in short-term debt mutual funds or recurring deposits for your son’s higher studies.

Retirement Corpus: Invest the remaining amount in a mix of equity and debt mutual funds for long-term growth.

Health Insurance Adequacy: Review your existing health insurance to ensure sufficient coverage.

Planning Your Income Resumption
Once you resume work, save at least 20-30% of your income.

Prioritise retirement contributions alongside education planning.

Use surplus income to reduce financial dependency on investments.

Tax Efficiency
Mutual Funds: Equity mutual funds provide tax benefits but watch for LTCG above Rs. 1.25 lakh (taxed at 12.5%).

Surrendering ULIP: Check tax implications on surrender proceeds. ULIPs offer tax exemption if premiums don't exceed 10% of the sum assured.

Health Insurance: Claim Section 80D deductions for premiums paid.

Strategic Steps Forward
Review the policy surrender value. If penalties are high, consider continuing till break-even.

Consult with a Certified Financial Planner for a detailed portfolio review.

Set realistic timelines for education and retirement goals.

Maintain separate funds for short-term needs and long-term growth.

Finally
Your proactive approach will create a strong financial foundation. By reallocating your resources wisely, you can secure your son’s education and your retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

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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