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Retired with a 1 Lakh Pension - Should I Ask my Son to Quit His 80k Job to Look After Us?

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 31, 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
Nibedita Question by Nibedita on Jul 30, 2024Hindi
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Sir, I am a retired person having a pension of 1 lakh. I have 33 lakhs in PPF, 50 lakhs in bank FD, 60 lakhs in share under PMS, 28 lakhs in MF, two houses with one house in rent of 30k pm, home loan of 10 lakhs. My only son is working with 80k salary. Can I ask him to take retirement to look after us

Ans: You have a stable pension of Rs 1 lakh per month. Your PPF account holds Rs 33 lakhs. You also have Rs 50 lakhs in a bank FD. Your shares under PMS are valued at Rs 60 lakhs. Your mutual funds are worth Rs 28 lakhs. You own two houses, one of which generates a rental income of Rs 30,000 per month. You have a home loan of Rs 10 lakhs.

Dependence on Son
Your son earns Rs 80,000 per month. You are considering asking him to take early retirement to look after you. Let's evaluate the financial and emotional aspects of this decision.

Financial Considerations
Your Pension and Income: Your pension and rental income provide a stable monthly inflow. This can cover your regular expenses.

Assets: Your PPF, FD, shares, and mutual funds offer substantial financial security. They can be used for future needs or emergencies.

Home Loan: You have a home loan of Rs 10 lakhs. Ensure it is manageable within your current income and assets.

Asking Your Son to Retire
His Financial Independence: Your son’s financial independence is crucial for his future. Early retirement could affect his long-term financial stability.

Supporting You: While he might want to support you, his income is also important for his family and future plans.

Alternative Solutions
Professional Care: Consider hiring professional care services. This ensures you receive proper care without affecting your son's career.

Family Discussions: Have an open discussion with your son about your needs. Explore solutions together that balance his career and your care.

Evaluating Your Portfolio
PPF and FD: These provide safety and stable returns. Continue maintaining them for risk-free growth.

Shares under PMS: Ensure your portfolio is well-managed. Regular reviews can enhance returns and manage risks.

Mutual Funds: Diversify your mutual fund investments. Opt for a mix of equity and debt funds to balance growth and safety.

Managing Home Loan
Repayment: Evaluate options to repay the home loan early. This reduces financial stress and interest burden.

Rental Income: Use your rental income to support loan repayments or reinvest in safer assets.

Final Insights
Your financial position is stable with diverse assets. Asking your son to retire might not be the best solution. Consider professional care and open family discussions. Ensure your investments are well-managed and balanced for future needs.

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  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

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I am 61 years and retired from central government. Getting 48000 and 30000 as pension and rent. All my retirement benefits are exhausted on building of house and education loan. I need 5000000 fifty lakhs in seven years. What i should do. This amoint to be given to my son and what way i accummulate.
Ans: I appreciate your commitment to helping your son. Let's explore ways to accumulate Rs 50 lakhs in seven years.

Evaluate Current Income and Expenses

Track your monthly income of Rs 78,000. Prioritise your essential expenses and find areas to save.

Create an Investment Plan

Consider investing in mutual funds. Actively managed funds often outperform index funds, especially in volatile markets.

Benefits of Actively Managed Funds

Actively managed funds are handled by expert fund managers. They can adapt strategies based on market conditions.

Systematic Investment Plan (SIP)

Start a SIP to invest regularly. This helps in averaging costs and reduces market risk.

Consider Balanced Funds

Balanced funds invest in both equity and debt. This provides growth and stability.

Emergency Fund

Set aside a small amount each month for emergencies. This ensures financial security without touching investments.

Avoid Real Estate and Annuities

Real estate can be illiquid and risky. Annuities often have high fees and low returns.

Seek Professional Advice

Consult a Certified Financial Planner. They can tailor a plan to help you achieve your goal.

Stay Committed and Review Regularly

Monitor your investments and make adjustments if needed. Stay focused on your goal.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 23, 2024

Asked by Anonymous - Jul 10, 2024Hindi
Money
Sir i am 50 yrs old has rental income from two houses in mumbai is 70,000.00 (Worth 2.5cr).Son has completed engineering. Stocks worth 2.5cr, daughter in 9th std, fd worth 50lac. No debt and no loan in the house in which i live(worth 1.2cr).can i retire, need olan for monthly total 2.0lac expense.n
Ans: You are 50 years old with a solid financial base. You have two rental properties in Mumbai generating Rs. 70,000 per month. Your son has completed engineering, and your daughter is in 9th standard. You own stocks worth Rs. 2.5 crores, fixed deposits (FDs) worth Rs. 50 lakhs, and a house worth Rs. 1.2 crores with no debt. You want to retire and cover monthly expenses of Rs. 2 lakhs. Let’s evaluate your financial situation and structure a plan for a comfortable retirement.

Current Income and Assets
Rental Income: Rs. 70,000 per month
Stock Portfolio: Rs. 2.5 crores
Fixed Deposits: Rs. 50 lakhs
Primary Residence: Rs. 1.2 crores (No loan or debt)
Total Worth of Rental Properties: Rs. 2.5 crores
You have a substantial financial foundation that can support your retirement plan with careful management.

Monthly Expense Planning
Current Monthly Expenses: Rs. 2 lakhs
Income from Rentals: Rs. 70,000 per month
There is a gap of Rs. 1.3 lakhs per month between your income and expenses. This gap needs to be covered by drawing from your investments.

Income Generation Strategy
To meet your monthly expenses, you’ll need to create a stable and reliable income stream from your assets. Here’s how you can do it:

1. Systematic Withdrawal Plan (SWP) from Mutual Funds
Generate Regular Income:

Convert a portion of your stock portfolio into a diversified mutual fund portfolio.
Set up a Systematic Withdrawal Plan (SWP) from these funds to generate a consistent monthly income.
SWPs can provide you with a steady flow of income while keeping your capital invested for growth.
Withdrawal Amount:

Start by withdrawing Rs. 1.3 lakhs per month, adjusted for inflation over time.
Equity-Debt Balance:

Maintain a balance between equity and debt in your mutual fund portfolio.
Equity can provide growth, while debt can offer stability and reduce risk.
2. Interest from Fixed Deposits
Interest Income:

Your Rs. 50 lakhs in FDs can generate interest income.
Depending on the interest rate, this could add a supplementary income stream.
Laddering Strategy:

Consider using an FD laddering strategy, where you split your FDs into multiple maturities.
This can provide liquidity at regular intervals, ensuring you have access to funds when needed.
3. Dividend Income from Stocks
Dividend Yield:

Some of the stocks in your portfolio might provide dividends.
Reinvest dividends or use them as additional income to reduce the amount needed from your SWP.
Review and Rebalance:

Periodically review your stock portfolio to ensure it aligns with your risk tolerance.
Shift some funds to dividend-paying stocks if necessary.
Planning for Inflation
Inflation Adjustment:
Your monthly expenses will likely increase due to inflation.
Ensure your income sources, especially SWP and dividend income, grow at a rate that matches or exceeds inflation.
Periodically adjust the withdrawal amount in your SWP to match inflationary pressures.
Managing Healthcare Expenses
Health Insurance:

Ensure your health insurance coverage is adequate for your needs.
You should have a comprehensive health insurance plan covering both you and your spouse.
Medical Corpus:

Set aside a portion of your fixed deposits as a dedicated medical corpus.
This will provide a safety net in case of unexpected medical expenses.
Education Fund for Your Daughter
Setting Aside Funds:

Allocate a portion of your assets towards your daughter’s higher education expenses.
This can be done through a dedicated mutual fund portfolio or a combination of FDs and mutual funds.
Goal-Based Investments:

Consider investing in balanced or conservative mutual funds to grow this corpus with lower risk.
Plan the withdrawal to coincide with her higher education needs in the coming years.
Reviewing and Rebalancing the Portfolio
Regular Monitoring:

Regularly review your investment portfolio to ensure it is aligned with your goals.
Rebalance the portfolio annually or bi-annually to maintain the desired asset allocation between equity, debt, and other instruments.
Risk Management:

As you approach deeper into retirement, gradually reduce exposure to high-risk assets.
Focus on capital preservation while ensuring sufficient growth to cover inflation.
Legacy Planning
Estate Planning:

Consider creating a will to ensure your assets are distributed according to your wishes.
Include provisions for your children’s future needs, ensuring that their financial security is maintained.
Nomination and Trusts:

Ensure that all your investments, insurance policies, and assets have proper nominations.
Consider setting up a trust if you wish to provide long-term financial security for your family.
Final Insights
With your current assets and income, retiring at 50 is achievable. By carefully structuring your investments and setting up a reliable income stream, you can comfortably cover your monthly expenses while maintaining and growing your wealth. Regularly review and adjust your financial plan to stay on track and adapt to changing circumstances.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 31, 2024

Asked by Anonymous - Dec 31, 2024Hindi
Money
I am 41 year old and working wife of 37 and 5 year old son. Question: can we both take retirement now ? Salary: 1.5 lac/per month in hand of my 1.2 lac/ per month salary of my wife Investment: 1) 80lac in mutul fund 2) 60 lac in ppf 3) 20 lac in nps 4) 15 lac in gold 5) 2 crore in property 6)10 lac in shares Liability: home expenses like 50k per month and child fee 2 lac per year
Ans: Early retirement is a significant decision that requires careful analysis. Below is a detailed evaluation of your situation based on your financial details.

Income Sources Post-Retirement
Mutual Funds: Rs. 80 lakh in mutual funds offers good growth potential. With disciplined withdrawal, this can provide regular income.

PPF: Rs. 60 lakh in PPF is a stable corpus. It provides safe returns and tax benefits.

NPS: Rs. 20 lakh in NPS will support retirement income. However, withdrawals are partially restricted.

Gold: Rs. 15 lakh in gold is not an income-generating asset. It serves as a hedge against inflation.

Shares: Rs. 10 lakh in shares adds diversification but is volatile. Avoid heavy reliance on this for regular income.

Property: Rs. 2 crore in property is a significant asset. If it’s rental property, it can generate consistent income.

Monthly Expense Analysis
Household Expenses: Rs. 50,000 per month (Rs. 6 lakh annually).

Child’s Education: Rs. 2 lakh per year for the next 13 years. This totals Rs. 26 lakh.

Additional Expenses: Include medical, travel, and emergencies. Factor an additional Rs. 3–5 lakh annually.

Estimating Corpus Requirement
Monthly Expense in Retirement: Assuming Rs. 1 lakh to account for inflation and lifestyle.

Retirement Period: For 40 years post-retirement, a corpus of Rs. 4–5 crore is typically required.

Child’s Education Fund: Rs. 26 lakh should be allocated for this purpose.

Portfolio Analysis
Asset Allocation:

You have a balanced portfolio of equity (mutual funds and shares), fixed income (PPF), and gold.
Maintain 60:40 equity-to-debt ratio for growth and stability.
Diversification:

Your mutual fund investments are well-diversified. Continue monitoring fund performance.
Avoid over-concentration in any single sector or asset class.
Liquidity:

Your PPF and property are not easily liquid. Maintain an emergency fund of Rs. 10 lakh in a liquid form.
Recommendations
Retirement Decision:

Early retirement is feasible if you manage withdrawals carefully and account for inflation.
Consider semi-retirement. Work part-time for 5–10 more years to reduce withdrawal pressure.
Child’s Education:

Allocate Rs. 26 lakh for your child’s education. Use fixed-income instruments like PPF or debt funds.
Health Insurance:

Secure comprehensive health insurance for your family. Medical costs can erode your corpus.
Investment Adjustments:

Rebalance your portfolio annually to maintain the desired equity-debt ratio.
Shift a portion of volatile equity investments to stable hybrid funds or debt instruments closer to withdrawal.
Contingency Planning:

Maintain an emergency fund covering 12–18 months of expenses.
Create a will to ensure smooth estate planning.
Final Insights
Early retirement can be achieved with disciplined financial planning. Regular monitoring of investments is critical. Consider working for a few more years if uncertainties persist. Prioritise your family’s security, and ensure your corpus is sufficient for long-term needs.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 31, 2025

Asked by Anonymous - Jan 30, 2025Hindi
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I am 40 year old, have 38 lakhs in FD, 60 lakh in EPF, 40 lakh in PPF, 30 lakh in Mutual fund and 10 lakh in NPS. Have own house and another house earning rent of rs 15000 per month. Monthly expenses is 1 lakh. Son is in class 7. Can I retire ?
Ans: You have built a solid financial base. Let's assess if early retirement is feasible for you.

Assessing Your Current Financial Position
You have Rs 38 lakh in Fixed Deposits (FD).
Your Employee Provident Fund (EPF) balance is Rs 60 lakh.
You have Rs 40 lakh in Public Provident Fund (PPF).
Your mutual fund investments total Rs 30 lakh.
Your National Pension System (NPS) corpus is Rs 10 lakh.
You own a second house generating Rs 15,000 per month in rental income.
Monthly Expense Requirement
Your monthly expense is Rs 1 lakh.
Annually, this totals Rs 12 lakh.
After rent income, you need Rs 10.2 lakh per year.
Your corpus should generate this amount without running out.
Key Retirement Considerations
1. Longevity of Your Corpus
You may live for another 40–50 years.
Your investments should last for this period.
A balanced approach is necessary to sustain wealth.
2. Inflation Impact on Expenses
Your current Rs 1 lakh per month will increase over time.
Inflation reduces the value of money.
Your investments must grow faster than inflation.
3. Education & Future Responsibilities
Your son is in Class 7 and will need higher education funds.
Higher education costs rise significantly over time.
You must set aside a separate fund for this.
4. Healthcare & Emergency Fund
Medical costs rise with age.
Health insurance is essential.
A dedicated emergency fund prevents financial stress.
Evaluating Your Passive Income Sources
Rental income of Rs 15,000 per month covers only a small portion of expenses.
Your existing assets must generate regular income.
Safe withdrawals should sustain your retirement.
Investment Strategy for a Secure Retirement
1. Equity Mutual Funds for Growth (40–50%)
Your corpus should continue to grow.
Equities provide long-term wealth creation.
Actively managed funds can beat inflation.
A mix of large-cap, mid-cap, and hybrid funds balances growth and safety.
2. Debt Instruments for Stability (30–40%)
FDs, EPF, and PPF provide safety.
Keep some funds in liquid debt instruments.
Target maturity funds and short-duration debt funds can provide regular income.
3. Systematic Withdrawal Plan (SWP) for Monthly Cash Flow
Instead of withdrawing lump sums, use an SWP strategy.
This ensures regular income without depleting capital fast.
It also provides tax efficiency.
4. Gold as a Hedge (5–10%)
Gold protects against economic fluctuations.
Consider Sovereign Gold Bonds (SGBs) for better returns.
SGBs also provide annual interest.
Insurance & Risk Management
Ensure you have term insurance for family security.
Maintain a comprehensive health insurance plan.
Keep a separate emergency fund for unexpected expenses.
Final Insights
Early retirement is possible but needs careful planning.
Your corpus must be structured for growth and stability.
Inflation and future expenses must be factored in.
Investment allocation should balance risk and liquidity.
Regular reviews are essential to keep your plan on track.
Would you like a detailed withdrawal strategy based on your exact needs?

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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