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Ramalingam

Ramalingam Kalirajan  |7097 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 11, 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
Asked by Anonymous - Apr 24, 2024Hindi
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I will retire in 3 years ,in june 2027 & will have a corpus of around 3.5 Cr invested in PPF, EPF ,Supper Annuation Fund & MF . I live in my own flat ,currently market value of Rs 1.8 Cr . I also have an inherited flat from my parent valued at Rs80 lakhs . I need a monthly income of Rs 2.0 lacs after retirement . Please suggest way to invest

Ans: Congratulations on your impending retirement and the substantial corpus you've accumulated across various investment avenues. Planning for a comfortable post-retirement income is essential, and I'm here to offer guidance on how to achieve your financial goals.

With a corpus of around 3.5 crores invested in PPF, EPF, Superannuation Fund, and mutual funds, you have a solid foundation for retirement. Additionally, owning your own flat with a market value of Rs. 1.8 crores and an inherited flat valued at Rs. 80 lakhs provides further financial security.

To generate a monthly income of Rs. 2.0 lakhs after retirement, you'll need to ensure your investments are structured to provide a consistent stream of income while preserving capital for the long term.

Given your investment horizon of 3 years until retirement, it's crucial to adopt a balanced approach that combines both growth and income-generating assets. Here are some suggestions:

Dividend-Paying Mutual Funds: Allocate a portion of your corpus towards dividend-paying mutual funds, focusing on both equity and debt funds. These funds provide regular income through dividend payouts while also offering the potential for capital appreciation.

Systematic Withdrawal Plans (SWP): Consider setting up SWPs from your mutual fund investments to meet your monthly income requirement post-retirement. SWPs allow you to withdraw a fixed amount periodically, ensuring a steady stream of income while keeping your investments intact.

Rental Income: Utilize the rental income from your inherited flat to supplement your monthly income post-retirement. If feasible, you may also explore renting out a portion of your own flat to generate additional income.

Fixed Deposits and Bonds: Allocate a portion of your corpus towards fixed deposits and bonds to provide stability and ensure liquidity. Opt for instruments with varying maturities to create a ladder that aligns with your income needs.

Real Estate Investment Trusts (REITs): Consider investing in REITs, which offer exposure to income-generating commercial real estate properties. REITs provide regular dividends and the potential for capital appreciation, enhancing your overall income stream.

Regular Review and Adjustment: Regularly review your investment portfolio and make necessary adjustments to ensure it remains aligned with your financial goals and risk tolerance. Consider consulting with a Certified Financial Planner to optimize your investment strategy and navigate the complexities of retirement planning.

By diversifying your investment portfolio across multiple asset classes and implementing income-generating strategies, you can work towards achieving your goal of a monthly income of Rs. 2.0 lakhs post-retirement.

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  |7097 Answers  |Ask -

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

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I will retire this year at the age of 63. Will have a corpus of around 3 crores out of which I want to have a yearly return of at least 18 lakhs to take care of monthly expenses. How do you suggest to invest ??
Ans: Congratulations on reaching this significant milestone of retirement! With a corpus of 3 crores and a goal of generating an annual income of 18 lakhs, thoughtful investment planning is key. Here's a tailored approach to help you achieve your financial objectives:

Diversify your investments across various asset classes, including equities and fixed income securities, to mitigate risk and enhance returns.

Allocate a portion of your corpus to actively managed equity funds. These funds have the potential to outperform the market, especially during periods of market inefficiencies, offering you the opportunity for higher returns.

Avoid direct funds investing. They may require active management, expertise, and time, which could be challenging, especially during your retirement phase. Instead, consider investing through a Certified Financial Planner (CFP) who can guide you in selecting the right mutual fund distributors (MFDs).

Fixed income investments such as bonds and debt mutual funds can provide stability and regular income. Allocate a significant portion of your corpus to these instruments to meet your income requirements.

Regular review and rebalancing of your portfolio are essential to ensure it remains aligned with your financial goals and risk tolerance. Consider periodic consultations with your CFP to make any necessary adjustments.

Stay informed about market trends and economic developments. Keeping yourself updated will empower you to make informed decisions regarding your investments.

Remember, investing is a journey, and it's essential to remain patient and disciplined. With careful planning and prudent investment decisions, you can enjoy a financially secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7097 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2024

Asked by Anonymous - May 10, 2024Hindi
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Hello sir, I am 33 years old working as a software professional. I have a mothly SIPs that I started earlier this year of 30000 rupees which was divided into 10000 rs for ICICI Prudential bluechip fund direct growth large cap, 10000 rs for motilal oswal midcap and 5000 rs each in Quant small cap and Aditya birla sunlife PSU fund. Along with this I have couple of life insurance policies with LIC on my name and one each for my wife and kid altogether I'm paying premium of 3 lakhs per annum. I also invested in real estate and bought a land worth 40 lakhs. I'm planning for my retirement at the age of 45 and want to know best ways for investment to build my corpus and earn 2 lakhs per month from it post retirement which suffices my needs adjusting to inflation.
Ans: Your commitment to securing your financial future is commendable, and your portfolio reflects a mix of investments. Let's analyze your current strategy and chart a path towards your retirement goal.

Starting with your SIPs, allocating funds across different categories like large-cap, mid-cap, and small-cap indicates a balanced approach to risk and growth. However, it's essential to review your portfolio periodically to ensure it aligns with your changing goals and market conditions.

There are some advantages to consider direct funds, and the cost savings can be significant in the long run. However, there are some potential benefits to using a regular MFD:

Advantages of Investing Through a Mutual Fund Distributor (MFD):

• Personalized Advice: MFDs can be helpful for beginners or those who lack investment knowledge. They can assess your risk tolerance, financial goals, and investment horizon to recommend suitable mutual funds. This personalized guidance can be valuable, especially if you're new to investing.
• Convenience: MFDs handle all the paperwork and transactions on your behalf, saving you time and effort. They can help with account setup, SIP registrations, and managing your portfolio across different funds.
• Investor Support: MFDs can be a point of contact for any questions or concerns you may have about your investments. They can provide ongoing support and guidance throughout your investment journey.


Your life insurance policies provide financial protection for your family, which is crucial. However, it's advisable to evaluate if the coverage meets your evolving needs and if there are more cost-effective options available.

Investing in real estate can be lucrative, but it comes with its own set of challenges like liquidity issues and market volatility. Considering your retirement goal, diversifying your investments beyond real estate might be prudent.

To achieve your retirement target of ?2 lakhs per month adjusted for inflation, you'll need a substantial corpus. Considering your age and retirement timeline, investing in a mix of equity, debt, and other asset classes is essential.

Since you're aiming for early retirement, focusing on growth-oriented investments with higher returns potential could be beneficial. Regular reviews with a Certified Financial Planner can help fine-tune your strategy and maximize returns while managing risks.

Additionally, exploring tax-efficient investment avenues like Equity Linked Savings Schemes (ELSS) and PPF can optimize your tax outgo and enhance your corpus over time.

Remember, building a retirement corpus requires discipline, patience, and a well-thought-out strategy. Stay committed to your savings plan and adapt to changes in your financial landscape.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7097 Answers  |Ask -

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

Asked by Anonymous - Jul 13, 2024Hindi
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Greetings I am retiring in April 2027. I may get a retirement corpus of around 2Cr. I have FDs of around 60 L Mutual Funds 40L. I have two flats and the home loan of one flat will be repaid before my retirement. For the other flat there is no loan. Myself and my wife have ancestors property (land)valued at around 6 Cr. I may need a monthly income of 75 K.Kindly suggest investment options for me
Ans: First, congratulations on your upcoming retirement. You've done a great job building a solid financial foundation. You have a diverse portfolio with fixed deposits, mutual funds, real estate, and ancestral property. This diversification provides stability and potential growth.

Your expected retirement corpus of Rs. 2 crore is substantial. With this, along with your current assets and minimal loan commitments, you are well-positioned for a comfortable retirement. Let's evaluate your options to generate a monthly income of Rs. 75,000 while ensuring your capital grows and remains secure.

Creating a Retirement Income Plan
Fixed Deposits (FDs)
You have Rs. 60 lakhs in fixed deposits. FDs offer security and guaranteed returns. However, their interest rates may not keep pace with inflation. It's wise to keep a portion of your retirement corpus in FDs for liquidity and safety. Allocate around 20-25% of your corpus here.

Mutual Funds
You already have Rs. 40 lakhs in mutual funds. Mutual funds are excellent for growth and can be tailored to match your risk tolerance. Consider the following types of funds:

Balanced Funds

Balanced funds provide a mix of equity and debt. They offer growth potential while minimizing risk. Given your age and risk tolerance, a balanced fund can help maintain stability.

Equity Funds

Equity funds are suitable for long-term growth. They can be volatile, but with a horizon of 10-15 years, they can significantly enhance your returns. Diversify across large-cap, mid-cap, and multi-cap funds to spread risk.

Debt Funds

Debt funds are less risky and provide regular income. They are good for short-term needs. Invest in high-quality debt funds to ensure safety and reasonable returns.

Systematic Withdrawal Plan (SWP)
Use an SWP from your mutual fund investments to generate a regular income. It allows you to withdraw a fixed amount monthly, providing you with Rs. 75,000. This method ensures that your capital continues to grow while providing you with the needed income.

Additional Investment Options
Senior Citizens' Saving Scheme (SCSS)
SCSS is a government-backed scheme offering attractive interest rates and regular income. It's safe and suitable for retirees. You can invest up to Rs. 15 lakhs individually or Rs. 30 lakhs jointly. The interest is paid quarterly, providing a steady income.

Post Office Monthly Income Scheme (POMIS)
POMIS is another secure option. It offers a fixed monthly income and is backed by the government. You can invest up to Rs. 4.5 lakhs individually or Rs. 9 lakhs jointly. The interest rate is competitive, and the monthly payout can supplement your income.

Corporate Bonds and Non-Convertible Debentures (NCDs)
Investing in high-rated corporate bonds and NCDs can provide higher returns than traditional FDs. They come with a fixed tenure and interest rate, offering a predictable income stream. Ensure to choose high-rated instruments to minimize risk.

Dividend-Paying Stocks
Investing in blue-chip companies that pay regular dividends can provide a steady income. Dividends are usually paid quarterly and can supplement your monthly income. Choose companies with a strong track record of consistent dividends.

Monthly Income Plans (MIPs)
MIPs offered by mutual funds invest predominantly in debt instruments with a small portion in equity. They aim to provide regular income and capital appreciation. MIPs can be a good option for generating monthly income with moderate risk.

Assessing Risks and Diversification
Risk Assessment
Retirement planning requires balancing risk and returns. While you need growth to beat inflation, capital preservation is equally crucial. Assess your risk tolerance and align your investments accordingly. A mix of safe and growth-oriented investments will ensure stability and growth.

Diversification
Diversification reduces risk and enhances returns. Spread your investments across different asset classes like FDs, mutual funds

, government schemes, and stocks. This strategy ensures that poor performance in one area does not significantly impact your overall portfolio.

Tax Efficiency and Planning
Tax-Saving Instruments
Maximize your tax benefits by investing in tax-saving instruments under Section 80C, such as Equity-Linked Savings Schemes (ELSS) and SCSS. These instruments help reduce your taxable income while offering growth and regular income.

Tax on Returns
Understand the tax implications of your investments. For instance, interest from FDs and SCSS is taxable, while long-term capital gains from equity mutual funds enjoy favorable tax treatment. Plan your withdrawals and investments to minimize tax liabilities.

Health Insurance
Ensure you and your wife have adequate health insurance coverage. Medical expenses can erode your retirement corpus quickly. A comprehensive health insurance plan will provide peace of mind and financial security.

Estate Planning
Wills and Trusts
Estate planning is essential to ensure your assets are distributed according to your wishes. Draft a will to specify how your properties and investments should be allocated. Consider setting up a trust for efficient estate management and to minimize disputes among heirs.

Nomination and Succession
Ensure all your financial instruments have updated nominations. This simplifies the process for your heirs and ensures that your assets are transferred smoothly. Discuss your plans with your family to avoid confusion and misunderstandings later.

Emergency Fund
Liquidity
Maintain an emergency fund equivalent to 6-12 months of your monthly expenses. This fund should be easily accessible and kept in a liquid instrument like a savings account or a liquid mutual fund. It provides a financial cushion for unexpected expenses.

Reviewing and Adjusting Your Plan
Regular Reviews
Regularly review your investment portfolio to ensure it aligns with your goals and risk tolerance. Financial markets and personal circumstances change, so adjust your plan accordingly. Seek advice from a Certified Financial Planner to stay on track.

Rebalancing
Rebalancing your portfolio periodically is crucial to maintain your desired asset allocation. If your equity investments perform well, they might constitute a larger portion of your portfolio, increasing risk. Rebalance by selling a portion of equity and investing in debt to restore balance.

Stay Informed
Keep yourself informed about financial markets and new investment opportunities. Continuous learning helps make informed decisions and adapt to changing market conditions. Subscribing to financial newsletters and attending seminars can enhance your knowledge.

Long-Term Growth Strategies
Equity Investments
For long-term growth, maintain a portion of your portfolio in equity investments. Equities have historically outperformed other asset classes over the long term. However, they come with higher risk, so balance your equity exposure based on your risk tolerance.

Real Assets
While you've asked not to consider real estate, it's worth mentioning that your ancestral property is a significant asset. Ensure it is well-maintained and consider potential income streams from it, such as renting or leasing, to supplement your retirement income.

Genuine Compliments and Appreciation
You have done an admirable job of planning and saving for your retirement. Your diverse portfolio, debt-free lifestyle, and significant assets reflect careful planning and financial discipline. It’s evident that you have a clear vision for a comfortable and secure retirement.

Your meticulous approach towards ensuring a regular income and safeguarding your assets for the future is commendable. You’ve laid a strong foundation for your golden years, and with a few strategic adjustments, you can enjoy a financially worry-free retirement.

Final Insights
Retirement planning is a continuous process that requires regular monitoring and adjustments. Your primary goal should be to ensure a stable and sufficient income while preserving your capital. Diversify your investments, assess risks carefully, and make informed decisions.

Utilize safe investment options like SCSS, POMIS, and high-rated corporate bonds for regular income. Consider mutual funds for growth, and always keep an emergency fund. Regular reviews and rebalancing will keep your portfolio aligned with your goals.

Stay informed, and don’t hesitate to seek advice from a Certified Financial Planner to optimize your strategy. Your proactive approach and diversified portfolio set you up for a successful and enjoyable retirement. Keep up the good work and continue to make prudent financial decisions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Radheshyam

Radheshyam Zanwar  |1054 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Nov 21, 2024

Asked by Anonymous - Nov 21, 2024Hindi
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Hello, I am 3 yr neet dropper.in 2025 it will be my third attempt... I'm trying my best to crack neet ...i don't know what will happen will i score good marks or not ... please help me in suggesting good career options if not crack neet .....there are many options through neet marks also like bhms , veterinary...etc. i will also give entrance exam also like cuet ,gbpuat ,....but i want that what to choose which course will be best for me ...i want to make my life good and happy... having a good degree, good job ,...
Ans: Hello.
Have you analyzed your failure in 2 successive attempts in the NEET examination? If yes, then the question is what you have done for improvement and not then again the question arises why not? Here, I would like to suggest you focus now only on the NEET examination which is your 3rd attempt. Don't think about any other options right now till May 2025. After the NEET exam is over, you have ample time to explore the options available. Depending on your score in NEET 2025, we will guide you at that time. But yet, if you are confused, then looking towards your question and anxiety, you need personal counseling where you can express yourself face-to-face. Only after the NEET exam is over, you contact a counsellor for one-to-one counseling. Till then, keep mum and focus only on NEET. Take this exam as your mission and project. Work on this project, apply forces from all sides, success is there which is waiting for you eagerly.
Best of luck for your bright future.

Some tips: (1) Analyse separately Phy, Che, Bio (2) Prepare a list of hard topics (3) First focus more on the topics which are easy for you and then try to excel in hard topics (4) Appear more and more online/offline examinations (4) Prepare your short-cut file for all subjects (5) Prepare a file for each subject having only synopsis of all chapters (6) Try to solve the problems at the lightening speed and observe the period on regular basis (7) Create your time table to revise the topics on regular basis (8) Do not hesitate to ask your difficulties to your teachers, if you have joined to offline classes (9) Keep the habit of marking the answers which you know 100%. Don't guess the answers and mark them, as there is -ve marking scheme. (10) Be calm, quite, and smiling all the time to release the tension and always have a healthy chat with your friends.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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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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