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Moneywize |181 Answers |Ask -Follow

Financial Planner - Answered on Apr 10, 2024

MoneyWize helps you make smart investment choices.... more

Asked by Anonymous - Apr 07, 2024Hindi

Money

My retired father has a corpus of around 10 lakh which he wants to invest in some monthly income scheme to get monthly returns. Please suggest some good options where the risks will be not too high and returns should beat inflation?

Ans: Given your father's priorities of low risk and beating inflation, here are a couple of good options for him to consider investing his Rs 10 lakh corpus for monthly income:

1. Senior Citizen Savings Scheme (SCSS):

• This is a government-backed scheme specifically designed for senior citizens (above 60 years).
• It offers a relatively high and stable interest rate (currently 8.2% per annum).
• Interest is paid quarterly, but can be used to generate a monthly income by dividing it into three parts.
• There is a maximum investment limit of Rs 15 lakh.
• The scheme has tenure of 5 years, with an option to extend for 3 more years.

2. Pradhan Mantri Vaya Vandana Yojana (PMVVY):

• This is another government-backed scheme specifically for senior citizens. Do note that the scheme's availability may be limited based on the date of your inquiry (April 10, 2024).
• It offers a fixed interest rate (currently 7.4% per annum) for a 10-year policy term.
• The interest can be paid monthly, quarterly, half-yearly, or yearly.
• There is a maximum investment limit of Rs 15 lakh.

Additional factors to consider:

• Tax implications: Interest earned from both schemes is taxable as per your father's income tax slab.
• Liquidity: SCSS offers more flexibility as the principal amount can be withdrawn prematurely with a penalty. PMVVY has limited liquidity options.

Recommendation:

Both SCSS and PMVVY are good options for your father depending on his preference for interest rate (higher with SCSS but not fixed) vs. guaranteed income (PMVVY with a fixed rate for 10 years).

It's advisable to consult a financial advisor for personalised advice considering your father's overall financial situation and risk tolerance.

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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My father has retired recently. He has a saving corpus of Rs 2 crore. He wants to generate monthly regular income of Rs 75000/- through SWP, which should increase annually by 3%. Also, after drawing this monthly income of Rs 75000/- the lumpsum corpus of Rs 2 crores should also not reduce for at-least next 40 years. If possible the corpus of Rs 2 crore should also increase with time. Please suggest suitable Mutual Funds for investment. Thank you

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Sir . I m Retired person ,I wanted to Invest 60 L in monthly income plan Rs 70000/ Apporx Pl suggest for Returns

Ans: Investing for monthly income post-retirement is akin to setting up a steady stream from a river that continues to flow without depletion. With your corpus of 60 lakhs and the goal of receiving approximately 70,000 per month, the challenge is to strike a balance between generating sufficient income and preserving the principal amount.

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My father aged 73, has a lumpsum of 25 lakhs. He needs a regular monthly income. Kindly suggest a better way to invest without affecting the corpus

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Ans: You have a structured approach to investing. You are planning for retirement and your daughters' higher education.

A well-diversified portfolio helps in risk management and long-term growth. Let’s evaluate your current investments.

Retirement Portfolio Review
You are 44 years old and plan to retire at 52.

Your monthly SIP is Rs 14,000.

Your portfolio has large-cap, mid-cap, small-cap, hybrid, and thematic funds.

Positives
You have exposure to all market segments.

You are investing in equity for long-term growth.

You have a mix of aggressive and stable funds.

Areas of Improvement
Too many funds increase complexity.

Small-cap exposure is high, increasing risk.

Thematic funds may not align with retirement goals.

Recommendations
Reduce small-cap fund exposure for stability.

Consider increasing large-cap and hybrid allocation.

Thematic funds are unpredictable; review their role in your portfolio.

Higher Education Portfolio Review
Your elder daughter is 10 years old.

Your younger daughter is 5 years old.

You are investing Rs 5,000 per month for each child.

Positives
You are saving early, giving your investments time to grow.

You have diversified across equity, gold, and international markets.

Areas of Improvement
Gold funds do not generate high returns over time.

Index funds have limitations and do not adjust to market conditions.

Too many funds reduce portfolio efficiency.

Recommendations
Reduce gold fund exposure and increase equity allocation.

Replace index funds with actively managed funds.

Keep a balance between large-cap and mid-cap funds.

Final Insights
Your investment approach is disciplined and future-focused.

Reducing unnecessary funds will simplify your portfolio.

A balanced mix of large-cap, mid-cap, and hybrid funds will provide stability.

Regular reviews with a Certified Financial Planner will ensure alignment with your goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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

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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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