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Vivek Lala  |251 Answers  |Ask -

Tax, MF Expert - Answered on Mar 12, 2024

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Asked by Anonymous - Aug 06, 2023Hindi

Am a pensioner. I want to know about SYSTEMATIC WITHDRAWAL PLAN. What amount and which particular Mutual Fund Scheme should I invest to draw monthly 20000.

Ans: Hello, we are assuming that your corpus is 40L to have an SWP of 20K per month
You can select the following funds to have an SWP of 20K
Mid cap - 20%
Multicap - 25%
Large and mid cap - 25%
Equity hybrid - 20%
Multi asset fund - 10%
The time horizon for such investment should be 7 years plus

Please note that these suggestions are based on your stated goals and the information you provided. It is always a good idea to consult with a financial advisor in person to better understand your risk tolerance, time horizon, and specific financial goals.
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 Kalirajan  |4605 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Asked by Anonymous - May 13, 2024Hindi
I have only 3 years left for my job and planning to quit in Dec24.I have no pension and my PF and Gratuity will amount to Rs.30lacs.Let me know how the investment plan where I can get atleast 20000 per month
Ans: Crafting Your Retirement Income Strategy: A Comprehensive Approach
Your proactive planning for retirement with a lump sum of Rs. 30 lakhs from PF and Gratuity demonstrates foresight and commitment. Let's design an investment plan focused on generating a monthly income of at least Rs. 20,000, ensuring financial stability during your post-employment phase.

Understanding Your Financial Situation
Congratulations on your impending retirement! It's commendable that you're taking steps to secure your financial future despite not having a pension. Your PF and Gratuity form a solid foundation for building your retirement corpus.

Assessing Income Needs and Investment Horizon
Generating a monthly income of Rs. 20,000 requires a well-thought-out investment strategy tailored to your financial goals and risk tolerance. With a three-year investment horizon until retirement, prioritizing stability and consistent income generation is key.

Leveraging Systematic Withdrawal Plans (SWP)
Integrating SWP into your investment plan can provide a reliable income stream post-retirement. SWP allows you to systematically withdraw a predetermined amount from your mutual fund investments at regular intervals, ensuring a steady cash flow.

Allocating Your Retirement Corpus
Fixed Income Instruments: Allocate a significant portion of your corpus to fixed income instruments such as Senior Citizen Savings Scheme (SCSS), Post Office Monthly Income Scheme (POMIS), or fixed deposits (FDs) to provide stability and regular income.

Debt Mutual Funds: Consider investing a portion of your corpus in debt mutual funds with SWP facilities. These funds offer potential for higher returns compared to traditional fixed income instruments while maintaining a conservative risk profile.

Balanced Funds: Explore balanced funds that offer a mix of equity and debt investments. These funds provide growth potential along with regular income distributions, suitable for retirees seeking a balanced approach.

Regular Monitoring and Adjustments
Regularly review the performance of your investment portfolio and make necessary adjustments based on market conditions and your evolving financial needs. Rebalancing the portfolio periodically ensures it remains aligned with your retirement income goals.

By leveraging SWP alongside a diversified portfolio of fixed income instruments, debt mutual funds, and balanced funds, you can achieve your goal of generating a monthly income of Rs. 20,000 post-retirement. Prioritize stability, consistency, and regular monitoring to ensure a comfortable and financially secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,

..Read more


Ramalingam Kalirajan  |4605 Answers  |Ask -

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

Hi, I am 46yr old have current fund value of 12lacs and monthly SIP of 20K. I am in need of funds which I could manage by gradual withdrawal. Should I go for mutual fund withdrawal or meet the fund requirements by borrowing loan? Please guide
Ans: I understand you're in a tough spot and need some guidance. You're 46 years old with a current fund value of Rs 12 lakhs. You also have a monthly SIP of Rs 20,000. It's good to know you're already investing regularly. Now, you need to decide whether to withdraw from your mutual funds or take a loan. Let's dive into both options to help you make an informed decision.

Evaluating Mutual Fund Withdrawal

Withdrawing from your mutual fund is one option. This gives you immediate access to your funds without incurring debt. Here’s what you need to consider:

Liquidity Needs: If you need funds urgently and in smaller amounts, mutual fund withdrawal can be a flexible option. You can withdraw what you need gradually.

Impact on Investment Goals: Frequent withdrawals might disrupt your long-term financial goals. It's essential to assess how much you can withdraw without harming your future plans.

Tax Implications: Mutual fund withdrawals come with tax implications. Depending on the type of fund and holding period, you might have to pay capital gains tax. Short-term capital gains tax can be higher compared to long-term capital gains.

Market Timing Risk: Withdrawing funds during a market downturn can lead to losses. Timing the market is challenging, and you might end up withdrawing at a low point, impacting your overall returns.

Future Growth Potential: By withdrawing funds, you reduce the amount available for future growth. This can affect the compounding benefit that mutual funds offer over the long term.

Considering Borrowing a Loan

Taking a loan is another option. Loans provide immediate funds without disturbing your current investments. Here are some points to consider:

Debt Burden: Loans come with the responsibility of repayment. You’ll need to manage monthly EMI payments along with your existing expenses. This can strain your finances if not planned well.

Interest Costs: Loans involve interest payments, which add to the cost of borrowing. Compare the interest rates of different loan options to find the most affordable one.

Credit Score Impact: Taking a loan and repaying it on time can improve your credit score. However, missing EMIs can negatively impact your credit score, affecting your ability to borrow in the future.

Loan Types: There are various loan types – personal loans, loans against mutual funds, and more. Each has different terms, interest rates, and eligibility criteria. Choose the one that suits your needs and financial situation best.

Mutual Funds vs Loans: An Analytical Comparison

Now, let’s compare both options in detail:

Immediate Accessibility: Mutual fund withdrawal provides immediate access to your funds. Loans might take some time for approval and disbursement.

Cost Analysis: Withdrawing from mutual funds might incur capital gains tax, whereas loans come with interest costs. Compare the effective cost of both options over your required period.

Financial Discipline: Loans require disciplined repayment, which can instill financial discipline. Mutual fund withdrawal doesn’t have this repayment obligation but can reduce your investment corpus.

Impact on Future Goals: Withdrawals can impact your long-term financial goals. Loans, if managed well, can provide the necessary funds without disrupting your investments.

Benefits of Mutual Funds and Loans

Let’s look at the benefits of both options to help you decide better:

Mutual Funds:

Flexibility in withdrawal amount and timing.
No debt obligation or EMI pressure.
Potential for future growth if investments are maintained.

Immediate funds without disturbing current investments.
Potential for improving credit score with timely repayments.
Fixed EMI structure helps in budgeting and financial planning.
Understanding the Disadvantages

Every option comes with its disadvantages. It’s crucial to be aware of them:

Mutual Funds:

Capital gains tax liability on withdrawals.
Potential reduction in future investment growth.
Market risk during withdrawal periods.

Interest costs can add up, increasing overall borrowing cost.
Repayment burden on monthly cash flow.
Risk of impacting credit score if EMIs are missed.
Assessing Your Financial Health

Before making a decision, assess your overall financial health:

Emergency Fund: Ensure you have an emergency fund in place before withdrawing from mutual funds or taking a loan. This provides a financial cushion for unexpected expenses.

Debt-to-Income Ratio: If you’re considering a loan, check your debt-to-income ratio. Ensure you can comfortably manage the EMI payments along with your current expenses.

Investment Goals: Revisit your financial goals and investment horizon. Understand how withdrawals or loans will impact your long-term plans.

Seeking Professional Guidance

Making financial decisions can be complex. Consulting a Certified Financial Planner (CFP) can provide personalized advice based on your financial situation. A CFP can help you evaluate the pros and cons of both options and guide you towards the best choice.

It's commendable that you’ve been consistent with your SIPs and built a fund of Rs 12 lakhs. This shows your dedication to financial planning. We understand that needing funds can be stressful, and we're here to help you make the best decision.

Final Insights

Deciding between mutual fund withdrawal and taking a loan depends on your immediate needs, financial goals, and comfort with debt. Mutual fund withdrawal offers flexibility but can impact future growth. Loans provide immediate funds but come with repayment obligations. Assess your financial health, consider the cost implications, and seek professional advice to make an informed decision. Remember, every financial decision should align with your long-term goals and provide peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |4605 Answers  |Ask -

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

Asked by Anonymous - Jun 29, 2024Hindi
I wanted to invest about 25 Lakh in Mutual Funds and wanted to have around 20k as Systematic Withdrawal Plans for the years. Please suggest how and where to invest.
Ans: You’ve made an excellent decision to invest Rs 25 lakh in mutual funds and use a Systematic Withdrawal Plan (SWP) for Rs 20,000 per month. This strategy can provide regular income while allowing your investment to grow. Let's explore how you can achieve this.

Understanding Your Investment Goals
Investing Rs 25 lakh in mutual funds with an SWP of Rs 20,000 per month is a sound strategy. It provides regular income while allowing your investments to grow over time. Here’s how you can do it effectively.

The Power of Mutual Funds
Mutual funds offer several advantages, including diversification, professional management, and liquidity. They cater to different risk appetites and financial goals. Here’s a deeper look:

Mutual funds invest in a diversified portfolio of securities. This reduces risk because poor performance of one security is offset by better performance of others.

Professional Management
Mutual funds are managed by experienced fund managers. They make informed decisions based on extensive research and market analysis.

Mutual funds are highly liquid. You can redeem your investments anytime, making them a flexible option for regular withdrawals.

Types of Mutual Funds
Equity Funds
Equity funds invest in stocks. They offer high growth potential but come with higher risk. Suitable for long-term goals.

Debt Funds
Debt funds invest in fixed-income securities. They provide stable returns with lower risk. Suitable for conservative investors.

Balanced Funds
Balanced funds invest in both equities and debt. They offer a balance of risk and return, ideal for moderate risk-takers.

Your Investment Strategy
Asset Allocation
A balanced asset allocation is crucial. Considering your need for regular income and growth, a mix of equity and debt funds is ideal.

Equity Funds: 60% of your portfolio
Debt Funds: 40% of your portfolio
Selecting the Right Funds
Equity Funds
Choose equity funds with a proven track record and consistent performance. Large-cap and multi-cap funds are good options for stability and growth.

Debt Funds
Select debt funds with low credit risk and good returns. Consider short-term and medium-term debt funds for stability and regular income.

Systematic Withdrawal Plan (SWP)
An SWP allows you to withdraw a fixed amount regularly from your mutual fund investments. This provides a steady income while your investments continue to grow.

Implementing the SWP Strategy
Step-by-Step Guide
Invest Rs 25 lakh: Allocate 60% to equity funds and 40% to debt funds.

Set up an SWP: Start withdrawing Rs 20,000 per month from your debt funds. Debt funds are less volatile, ensuring stable withdrawals.

Monitor and Adjust: Regularly review your investments. Adjust your withdrawals based on market performance and personal needs.

Advantages of Your Strategy
Regular Income
The SWP ensures a steady income of Rs 20,000 per month. This is useful for meeting monthly expenses without liquidating your investments.

Capital Growth
While you withdraw monthly, your remaining investment continues to grow. This helps in preserving and increasing your capital over time.

Tax Efficiency
SWP is more tax-efficient compared to withdrawing lump sums. You only pay tax on the gains withdrawn, which can be lower if held for over three years.

Risks and How to Manage Them
Market Volatility
Equity funds are subject to market volatility. To manage this, diversify across different sectors and market caps. Invest in funds with a good track record.

Interest Rate Risk
Debt funds are affected by interest rate changes. Choose funds with low duration to minimize this risk. Diversify across short-term and medium-term debt funds.

Inflation can erode the value of your withdrawals. Ensure your equity allocation is high enough to outpace inflation over the long term.

Monitoring Your Investments
Regular Reviews
Review your investments every six months. Check fund performance, reallocate if needed, and adjust your SWP amount if required.

Rebalance your portfolio annually. If your equity portion grows significantly, consider moving some gains to debt funds to maintain your desired asset allocation.

Staying Informed
Keep updated with market trends and economic conditions. This helps in making informed decisions about your investments and withdrawals.

Final Insights
Your decision to invest Rs 25 lakh in mutual funds with an SWP of Rs 20,000 per month is commendable. This strategy ensures regular income while allowing your investments to grow. By diversifying across equity and debt funds, you balance growth and stability.

Regular monitoring and rebalancing will keep your investments aligned with your goals. Stay informed about market conditions to make the best decisions for your financial future.

Investing through a Certified Financial Planner ensures you get personalized advice tailored to your needs. Their expertise can help you navigate market fluctuations and achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more

Latest Questions

Maxim Emmanuel  |288 Answers  |Ask -

Soft Skills Trainer - Answered on Jul 12, 2024

Asked by Anonymous - Apr 23, 2024Hindi
Hello sir my name is Santu Chakraborty.I am 34 year old now unmarried. My qualification is Bsc botany honours with 2nd class +diploma in mechanical engineering with distinction +btech in mechanical engineering from government engineering college west Bengal with 7.5 dgpa.I have 6 years of teaching experience in private diploma engineering college and now I working as a vocational teacher in automobile engineering department in gov high school.In my early phase of life I am going through lots of Misguide,seveare Anxiety issue. Nobody can help me on that phase.I recover mostly by my own after various dillema.I want to work in mechanical r and d company, Mechanical design basis company and also upgrade my teaching carrier. How can I start my journey at this age ?what is the risk factor also? Please tell me. I am very enthusiastic dedicated person. I have no guide in my home. My father is vegetable seller.
Ans: Hi Santu Chakraborty,

This is a really exhaustive query.

The journey thru' your acquisition of qualifications has been vast!

In the course of your life you are now suffering from SNIOP (SUSCEPTIBLE NEGATIVE INFLUENCE OTHER PEOPLE) this happens when you let others control your life.

I have this poem.. Especially for one's like you!

The Guy in the Glass

When you get what you want in your struggle for pelf,
And the world makes you King for a day,
Then go to the mirror and look at yourself,
And see what that guy has to say.
For it isn't your Father, or Mother, or Wife,
Who judgement upon you must pass.
The feller whose verdict counts most in your life
Is the guy staring back from the glass.
He's the feller to please, never mind all the rest,
For he's with you clear up to the end,
And you've passed your most dangerous, difficult test
If the guy in the glass is your friend.
You may be like Jack Horner and "chisel" a plum,
And think you're a wonderful guy,
But the man in the glass says you're only a bum
If you can't look him straight in the eye.
You can fool the whole world down the pathway of years,
And get pats on the back as you pass,
But your final reward will be heartaches and tears
If you've cheated the guy in the glass.

Dale Wimbrow (c) 1934

Get the enthusiasm going, don't get embroiled in what life has been before!

Take a stranglehold of your life and make it BIG!

The opportunities are.. Miracles waiting to happen, what are you waiting for.. You are the catalyst!?
Maxim Emmanuel.

Pick up yourself don't be a victim of self pity.

If you do need further professional advice happy to assist

...Read more

Nayagam P

Nayagam P P  |1830 Answers  |Ask -

Career Counsellor - Answered on Jul 12, 2024

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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