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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Jun 08, 2021

Mutual Fund Expert... more
Kalyan Question by Kalyan on Jun 08, 2021Hindi
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I have the following question.

I am just retired from Private Sector (no pension), with PF amount with me (around Rs 80 Lac). Please suggest how to invest the same so that I get some monthly amount to run my family. Also, let me know if any MF is there where I get regular return.

Ans: Invest Rs. 20 lakhs each in below 4 funds and do a SWP of not more than 7.5% of the corpus i.e. upto Rs. 50000 per month i.e Rs. 12500 from each of the 4 funds

  1. HDFC banking and PSU Fund – Growth
  2. ICICI Pru Corporate bond Fund – Growth
  3. Edelweiss Balanced Advantage Fund – Growth
  4. Union Balanced Advantage Fund – Growth
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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Sanjeev

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Financial Planner - Answered on Sep 23, 2023

Asked by Anonymous - Sep 14, 2023Hindi
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Sir, I just retired from my service @60yrs. I will get my PF+other fund ₹50L. Please advice how to invest the amount so that my principal not disputed and I can get ₹30,000 pm for my monthly expenses. My family of 2 persons are covered ₹50L health insurance. Regards
Ans: Considering your age and your requirement, you will need to invest in a mix of debt and equity instruments. Here are some investment options available to you:-

• Senior Citizens’ Savings Scheme (SCSS) – This is a pure debt instruments and provides guaranteed returns of 8.2% per annum. The interest is paid quarterly. The maximum amount that you can invest is Rs. 30 Lakhs.

• Corporate FDs – It provides you return more than the regular bank FDs. It contains two options i.e. cumulative and non-cumulative.

• Post Office Monthly Income Scheme (POMIS): This is another government-backed scheme that offers guaranteed monthly income. The current interest rate is 7.1%.

• Debt Mutual Funds: As your main concern is to protect the principal amount you may consider debt funds and monthly income can be achieved through the route of SWP (systematic withdrawal plan).

• Equity mutual funds: Equity mutual funds offer the highest potential returns, but they are also the riskiest. A small portion of the amount can be invested in the equity mutual funds for growth of the money in the long-term horizon.

It is good to know that you are adequately insured for any healthcare emergency.

Your requirement of Rs. 30,000 will be changing in the future due to inflation, hence you should consult with your financial advisor for a proper increasing income or SWP (systematic withdrawal plan) which can help you to ensure sufficient amount available for your monthly expenses.

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Ramalingam

Ramalingam Kalirajan  |3951 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2024

Asked by Anonymous - Apr 10, 2024Hindi
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I am 45 years old and I have NPS of INR 19000 pr month, PF of INR 34000 per month, PPF of INr 10000 p er month and SSY of 10000 each per month for both of my daughters. I can invest another 20000 per month. Please advise how I can invest to generate the good return?
Ans: At 45, you're taking proactive steps to secure your financial future through various investment avenues. Let's explore how you can further optimize your portfolio to generate good returns and achieve your financial goals.

Assessing Your Current Investments

Before making additional investments, assess your existing portfolio to understand its composition, risk profile, and alignment with your financial objectives. Evaluate the performance of your NPS, PF, PPF, and SSY investments to identify areas for potential enhancement.

Identifying Investment Goals

Define your investment goals and time horizon to guide your asset allocation and investment strategy. Whether it's retirement planning, children's education, wealth accumulation, or other financial objectives, clarity on your goals will inform your investment decisions.

Optimizing Asset Allocation

Diversify your investment portfolio across different asset classes to mitigate risk and optimize returns. Consider allocating your additional 20,000 per month across equity, debt, and other investment avenues based on your risk tolerance and investment horizon.

Equity Investments for Growth

Given your relatively young age and long-term investment horizon, consider allocating a portion of your additional funds to equity investments for potential capital appreciation. Equity mutual funds or exchange-traded funds (ETFs) offer diversified exposure to the stock market and can generate higher returns over the long term.

Debt Instruments for Stability

Balance your portfolio with investments in debt instruments such as fixed deposits, bonds, or debt mutual funds to provide stability and income generation. Debt investments offer lower volatility and serve as a hedge against market downturns, ensuring a more balanced and resilient portfolio.

Exploring Tax-Efficient Options

Maximize tax benefits by investing in tax-efficient instruments such as Equity Linked Savings Schemes (ELSS) for equity exposure, and Public Provident Fund (PPF) for debt allocation. These instruments offer tax deductions under Section 80C of the Income Tax Act, enhancing your overall tax efficiency.

Regular Monitoring and Rebalancing

Regularly review your investment portfolio to assess performance, rebalance asset allocations, and make necessary adjustments based on changing market conditions or personal circumstances. Periodic portfolio reviews ensure your investments remain aligned with your financial goals and risk tolerance.

Seeking Professional Guidance

Consider consulting with a Certified Financial Planner to develop a comprehensive investment plan tailored to your specific needs and goals. A financial advisor can provide personalized guidance, investment recommendations, and ongoing support to optimize your investment portfolio for long-term growth and financial security.

With a strategic approach and diversified portfolio, you're well-positioned to generate good returns and achieve your financial aspirations over the long term.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Latest Questions
Moneywize

Moneywize   |122 Answers  |Ask -

Financial Planner - Answered on Jun 25, 2024

Asked by Anonymous - Jun 13, 2024Hindi
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Ours is a family of 3 people -- My wife, I and my daughter who is 15. I am 39, my wife is 37 and our monthly expenses are Rs 90K. I own my house and expect to have no fixed income after 65 years, and expect to live till 75. Considering the ever increasing price rise what should be my corpus at 65 for me to continue living the life style I am living today?
Ans: Calculating your retirement corpus:

Here's how to estimate the corpus you'll need to maintain your current lifestyle after retirement:

1. Retirement period:

You plan to retire at 65 and expect to live till 75. So, your retirement period is 75 - 65 = 10 years.

2. Inflation adjustment:

You've rightly considered inflation. To estimate future expenses, we need to factor in inflation. A safe assumption for India is 5-7% inflation. Let's take an average of 6%.

3. Current monthly expenses:

You spend Rs 90,000 per month currently.

4. Future monthly expenses:

To find the monthly expense at retirement (at 65), we need to consider inflation for 26 years (39 years till retirement + 10 years retirement).

You can use an inflation calculator online or a simple formula:

Future monthly expense = Current monthly expense * (1 + Inflation rate)^number of years

In your case, Future monthly expense = Rs 90,000 * (1 + 0.06)^26 ≈ Rs 3,28,550 (approximately Rs 3.29 lakh)

5. Total corpus calculation:

Now you can calculate the total corpus needed. Here's a common approach:

Total corpus = Monthly expense * Number of years in retirement * 12 (months)

However, this method doesn't consider the fact that you'll be withdrawing money every month, reducing the corpus. A more accurate method is using the Time Value of Money (TVM) concept. There are online TVM calculators or Excel functions you can use.

Here's an alternative approach that provides a reasonable estimate:

Multiply the future monthly expense (Rs 3.29 lakh) by a factor considering inflation over the period. This factor can vary depending on your risk tolerance and investment strategy. A factor of 200 is often used as a conservative estimate.
Total corpus = Rs 3.29 lakh/month * 200 (factor) = Rs 6.58 crore (approximately Rs 658 million)

Additional factors to consider:

• Daughter's future expenses: Your daughter will be an adult by the time you retire. While she won't be financially dependent, consider any potential future support you might want to provide for her education or marriage.
• Healthcare costs: Healthcare expenses tend to increase with age. Factor in potential medical needs during retirement.
• Debt: If you have any outstanding debt by the time you retire, you'll need to account for its repayment in your corpus calculation.
• Investment returns: The corpus amount assumes a certain rate of return on your investments. Research different investment options and their potential returns to refine your calculations.

Recommendation:

Consult a financial advisor for a personalised retirement plan considering your specific financial situation, risk tolerance, and investment goals. They can help you create a more comprehensive plan and suggest suitable investment strategies to achieve your corpus target.

Remember, this is an estimate. Regularly review your plan and adjust it based on changing circumstances.

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Mayank

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IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Jun 24, 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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