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Should I invest my PF in SWP after 3 years?

Milind

Milind Vadjikar  | Answer  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Dec 07, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Asked by Anonymous - Dec 07, 2024Hindi
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I’m 50 year old professional considering early retirement.. My current investments stand like this 50L in PF, 52L in NPS and another 50 lakhs in FD.. I hv a rent income of 20k and staying in own house.. my plan is investing 40 Lakhs from FD in to SWP withdrawing 40K per month. Balance 10L kept as Emergency fund Keep the NPS invested till I’m 60 later I can buy Annuity from that Is it good option to keep 52L that is in PF for next 3 years (till it earns interest) then I will consider to invest either in SWP or any other mutual funds Pls suggest any corrections needed to this? My monthly expenses will be around 50-60 k that can be met with above arrangement now and later considering inflation

Ans: Hello;

To generate 40 K monthly income from 40 L fund you will have to do SWP at the rate of 12% which is unsustainable and not prudent.

Because an year of negative and/or flat returns in the market will erode the value of your corpus significantly.

Golden rule for SWP in retirement is that the source fund should be a hybrid fund with low allocation to equity and the SWP rate should not be more than 3-3.5%.

If you are keen to retire now you will have to withdraw the EPF so total corpus will be around 1 Cr.

A 3.5% SWP will yield you a monthly income of around 29.2 K.

Add your rental income of 20 K to this and your total monthly income comes to around 49.2 K.

If you do not wish to utilise your EPF now then you may have to continue working for atleast 5 years more.

Alternatively you may buy an immediate annuity for your corpus of 1 Cr and considering 6% annuity rate it may fetch you a monthly income of around 50 K but the flip side it is not indexed to inflation.

If you are confident of being able to top-up annuity income at 5, 10,15 year interval to match up with inflation then this can be a good option.

Best wishes;
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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Sir, U am retiring on 31 May 24 after the age of 57 years. Three months back I have invested Rs. 5,000/- each in MF like Kotak equity opportunities fund, ICICI prudential blue chip fund and Quant elss tax saver fund. Please guide me whether it is right or should I invest in some other mutual fund. I am investing 30 lakhs in Post office SCSS in joint account, 02 lakh in Mahila samman scheme and 09 lakhs in MIS. After getting my balance retirement amount U will invest in gold. My both the sons are in job. I am keeping 10 lakhs as emergency fund in Saving account. An I correct ? Is my investment planning is going to right path ? Please guide me sir. Thanks n regards.
Ans: Assessing Your Investment Portfolio: A Comprehensive Review

Reviewing Mutual Fund Investments:

Your investment in Kotak Equity Opportunities Fund, ICICI Prudential Blue Chip Fund, and Quant ELSS Tax Saver Fund demonstrates a diversified approach to equity investing. These funds offer exposure to different market segments, enhancing portfolio resilience.

Analyzing Fund Selection:

Kotak Equity Opportunities Fund focuses on capital appreciation by investing in high-growth potential stocks, while ICICI Prudential Blue Chip Fund emphasizes stable, large-cap companies. Quant ELSS Tax Saver Fund offers tax benefits along with equity exposure.

Considering Investment Horizon:

Given your impending retirement in May 2024, it's essential to reassess your investment horizon and risk tolerance. Equity investments are typically suited for long-term goals, and as you approach retirement, a more conservative approach may be prudent.

Evaluating Fixed Income Investments:

Allocating 30 lakhs to the Post Office Senior Citizen Savings Scheme (SCSS), 2 lakhs to the Mahila Samriddhi Scheme, and 9 lakhs to Monthly Income Schemes (MIS) reflects a focus on stability and regular income post-retirement.

Ensuring Liquidity with Emergency Fund:

Maintaining 10 lakhs as an emergency fund in a savings account provides liquidity and financial security, ensuring you're prepared for unexpected expenses or emergencies.

Exploring Gold Investments:

Your intention to invest in gold post-retirement diversifies your portfolio and acts as a hedge against inflation. Gold's intrinsic value and historical stability make it a viable asset class for wealth preservation.

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Consultation with a Certified Financial Planner:

Engaging with a Certified Financial Planner (CFP) will provide personalized advice tailored to your specific needs and goals. A CFP will help optimize your investment strategy, ensuring financial security and peace of mind in retirement.

Conclusion:

Overall, your investment planning showcases a balanced approach, with a mix of equity, fixed income, and emergency liquidity. By staying informed and periodically reviewing your portfolio, you're well-positioned to achieve your retirement objectives.

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Hello Sir, I am 53 years, planned for retirement after 3 years. Have MF investment about 50 lacs, FDs about 50 Lacs, will accumulate 50 lacs in the coming three years through investment in MF. My monthly expenditure is Rs 65,000. How can I plan with the above corpus for my retirement so as get monthly payout? Whether to go for SWP - Balanced advantage funds or SWP- Debt funds for my monthly income? Is this correct plan? I will be needing 75,000 per month after my retirement. How much tax will I have to pay on 75,000 per month? Will there be any exit load while changing to SWP? What should be my investment strategy?
Ans: It's great to see that you've already started planning for your retirement and have a diversified investment portfolio. You're taking the right steps towards securing your financial future.

Given your situation, it's essential to ensure that your investments align with your retirement income needs. SWP (Systematic Withdrawal Plan) can indeed be a useful tool to generate a regular income from your mutual fund investments.

Balanced advantage funds and debt funds both have their merits. Balanced advantage funds dynamically manage their equity exposure based on market conditions, offering potential for growth while managing risk. Debt funds, on the other hand, provide stability and regular income with lower risk.

Your plan to accumulate an additional 50 lakhs in MF over the next three years is commendable. It adds to your retirement corpus and potentially increases your income-generating capacity.

To meet your monthly expenditure of Rs. 65,000 during retirement, you'll need to generate a monthly payout of Rs. 75,000, considering inflation and unforeseen expenses.

Regarding taxation, withdrawals from debt funds attract taxation based on the holding period and are subject to indexation benefits. As for balanced advantage funds, equity taxation rules apply if the holding period exceeds one year. It's advisable to consult with a tax advisor for personalized guidance.

Exit loads might apply when switching to SWP, depending on the mutual fund's terms and conditions. Ensure you're aware of any applicable charges before making the switch.

Your investment strategy should focus on a balanced approach, considering your risk tolerance, time horizon, and financial goals. Diversification across asset classes and regular reviews of your portfolio are crucial for long-term success.

Overall, your plan seems well thought out, but it's essential to review and adjust it periodically to adapt to changing market conditions and personal circumstances.

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Ramalingam Kalirajan  |10872 Answers  |Ask -

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

Asked by Anonymous - May 20, 2024Hindi
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Hey it is Sumit aged 35 I am planning a retirement at age range of 45 - 50 My investment plannings are mentioned below 1) LIC which will mature in 2034 with amount of 29 lakh 2) one long term plan in sbi with 1 lakh premium ( High risk) every year which will give lum- Sum 1cr plus at age of 58 to my wife 3) one more long term plan of 10000 per month ( High Risk ) which will also give 1 CR plus at age of 60 to me My Net port folio of stock is currently 5 lakh and planning to invest 25 lakh from my side in next two year ( Note profit is not included ) I have one Land at home town and planning to buy one flat at working place Liability - around 18 lakh Kindly guide is it sufficient to take early retirement with monthly income after retirement near around one lakh
Ans: Sumit, it's commendable that you're planning ahead for your retirement at such a relatively young age. Let's evaluate your investment strategies and assess the feasibility of achieving your retirement goals.

Current Investment Portfolio
Your investment portfolio comprises a mix of insurance, long-term plans, stock investments, and property ownership. While each component has its merits, we'll explore if they align with your retirement objectives.

Evaluating Insurance Policies
Surrendering LIC Policies
Consider surrendering your LIC policies, which mature in 2034, and reinvesting the proceeds into more growth-oriented avenues like mutual funds (MFs). This move can potentially enhance your returns.

Risk Assessment of Long-term Plans
Evaluate the risk associated with the long-term plans for you and your wife. While aiming for a lump sum of Rs 1 crore+ sounds appealing, ensure the risk matches your risk appetite and financial goals.

Realigning Investments for Retirement
Reviewing Stock Portfolio
Assess your stock portfolio's growth potential and consider reallocating funds to diversified MFs for better risk management and potentially higher returns over the long term.

Addressing Liabilities
Mitigate your liability of around Rs 18 lakhs strategically. Consider leveraging your assets like land or the proposed flat purchase to optimize your financial position.

Feasibility of Early Retirement
Retirement Corpus Calculation
Calculate the total retirement corpus required to sustain your lifestyle post-retirement. Include factors like inflation, healthcare expenses, and any unforeseen contingencies.

Monthly Income Requirement
Estimate your monthly income requirement post-retirement, aiming for around Rs 1 lakh. Ensure your retirement corpus generates sufficient passive income to meet this target.

Surrendering LIC Policies for MF Investment
Advantages of MFs over Insurance
Mutual funds offer higher growth potential and flexibility compared to traditional insurance policies. They provide diversified exposure to various asset classes, catering to different risk profiles.

Consultation with a Certified Financial Planner
Seek advice from a Certified Financial Planner (CFP) to assess the optimal strategy for surrendering LIC policies and reinvesting in MFs. A CFP can provide personalized guidance tailored to your financial situation and goals.

Conclusion
Sumit, achieving early retirement with a comfortable monthly income is feasible with careful planning and strategic realignment of your investment portfolio. Surrendering LIC policies and reinvesting in MFs, along with prudent management of liabilities, can pave the way for a financially secure retirement.

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Reetika Sharma  |417 Answers  |Ask -

Financial Planner, MF and Insurance Expert - Answered on Dec 04, 2025

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Hello Sir, I am 40-year-old, my monthly in hand income is Rs. 67000/-. My monthly expense is Rs. 40 K-45 K. I have parental home, currently don’t have any loan, all expenses covered in monthly expense. Monthly investment as per below details: 1) Rs. 5K in PPF (currently 2.5 Lacs in PPF) 2) Rs. 2K in SBI Ulip policy for 30 years- started in 2013. 3) Started SIP 8 months back- Rs. 1.5 K each in -SBI gold direct, parag parikh flexi cap, quant small cap, nippon india small cap, Motilal oswal midcap. My question is: 1) Current returns on mutual funds are not so good can you suggest continuing above. 2) Also are this above investment sufficient for my children studies (Son-4 yrs, daughter-8 yrs) after 10-12 years. 3) Can you please suggest other investment option for future retirement purpose.
Ans: Hi Piyush,

Let us cover the details one by one:
1. You are left with approx 25k per month to invest in order to achieve your goals.
2. Make sure to have proper emergency fund of 1.5 lakhs in FD.
3. You should have proper term and health insurance for yourself and family.
4. Monthly investment in PPF - 5k. It is a good debt instrument and gives tax free return of 7.1%. Can continue with it.
5. 2k in SBI Ulip - not recommended. ULIPs are very high charging policies and usually gives an average return of 7-8% which is at par with that of FD. It comes with high hidden charges. Hence avoid taking such policies in future.
6. 12k monthly in mutual funds. OVerall a good amount but not sufficient to cover your goals. You should increase this amount to your maximum capacity.
7. Also start investing some amount for your retired life.

And funds that you mentioned are overlapped and not recommended. Ideally just have large, mid, small and multi cap fund in your portfolio. This mix will give a return of 12-14% on an yearly basis.
Try not to follow random online advice to invest your hard earned money. Take the help of a professional advisor to guide you through.

Hence, stop your current mutual funds and redirect them onto the mentioned mix. Also consider consulting a professional Certified Financial Planner - a CFP who can guide you with exact funds to invest in keeping in mind your age, requirements, financial goals and risk profile. A CFP periodically reviews your portfolio and suggest any amendments to be made, if required.

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https://www.instagram.com/cfpreetika/

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Nayagam P

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Hello, I’m a student who recently joined the Integrated M.Sc Physics program at Amrita University. I’m aiming for a strong academic foundation and a clear career path. Could you please guide me on the following: How good is this course for research careers or higher studies (IISc, IITs, abroad)? What are the placement prospects after Integrated M.Sc Physics at Amrita? Does the program help in preparing for alternate options like UPSC, CDS/AFCAT, or technical roles? What skills (coding, research projects, certifications) should I start early to make the most of this degree?
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Ramalingam Kalirajan  |10872 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 06, 2025

Asked by Anonymous - Dec 06, 2025Hindi
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Dear Sir/Ma'am, I need some guidance and advice for continuing my mutual fund investments. I am a 36 year old male, married, no kids yet and no debts/liabilities as such. I have couple of savings in PPF, NPS, Emergency funds and long term investing in direct stocks. I recently started below mentioned SIPs for long term to grow wealth. Request you to review the same and let me know if I should continue with the SIPs or need to rationalize. Kindly also advice on how to invest a lumpsum amount of around 6lacs. invesco small cap 2000 motilal oswal midcap 2700 parag parikh flexicap 3000 HDFC flexicap 3100 ICICI prudential largecap 3100 HDFC large and midcap 3100 HDFC gold etf FOF 2000 ICICI Pru equity and debt fund 3000 HDFC balanced advantage fund 3000 nippon india silver etf FOF 2000
Ans: You already built a solid foundation. Many investors delay planning. But you started early at 36. That gives you a strong advantage. You have no liabilities. You have long term thinking. You also have diversified savings like PPF, NPS, Emergency funds and direct stocks. That shows clarity and discipline. This approach builds wealth with less stress over time.

You also started systematic investments in equity funds. That is a positive step. Your selection covers multiple categories like large cap, mid cap, small cap, flexi cap, hybrid and precious metals. So the intent is right. You are trying to create a broad portfolio. That gives balance.

» Your Portfolio Composition Understanding
Your current SIP list includes:

Small cap

Mid cap

Flexi cap

Large cap

Large and mid cap

Hybrid category

Gold and Silver FoF

Equity and Debt allocation fund

Dynamic hybrid fund

This shows you are trying to cover many segments. But too many categories can create overlap. When there is overlap, you get confusion during review. It also makes portfolio discipline difficult. You may think you are diversified. But the holdings inside may repeat. That reduces efficiency.

Your portfolio now looks like:

Equity dominant

Hybrid for stability

Metals for hedge

So the broad direction is fine. But simplifying helps in long-term habit building.

» Fund Category Duplication
You hold:

Two flexi cap funds

One large and mid cap fund

One pure large cap fund

One mid cap fund

One small cap fund

Flexi cap funds already invest across large, mid, small. Then large and mid also overlaps. So the large cap exposure gets repeated. That may not add extra benefit. But it increases monitoring complexity.

So I suggest rationalising. Keep one fund per category in core. Keep satellite space for only high conviction.

» Core and Satellite Strategy
A structured portfolio follows core and satellite method.

Core portfolio should be:

Simple

Long term

Stable

Satellite portfolio can be:

High growth

Concentrated

Based on your thinking level, you can structure like this:

Core funds:

One large cap

One flexi cap

One hybrid equity and debt fund

One balanced advantage type fund

Satellite funds:

One mid cap

One small cap

One metal allocation if needed

This division gives clarity. You can continue SIPs with review every year. No need to stop and restart often. That reduces behavioural mistakes.

» Your Current SIP List Review with Suggested Streamlining

You can consider continuing:

One flexi cap

One large cap

One mid cap

One small cap

One balanced advantage

One equity and debt hybrid

You may reconsider keeping both flexi caps and both gold silver funds. One of each category is enough. Because too many funds do not increase returns. It complicates tracking.

Precious metal funds should not be more than 5 to 7 percent in your portfolio. This is because metals are hedge assets. They do not create compounding like equity. They act as protection during cycles. So keep them small.

» How to Use the Rs 6 Lakh Lump Sum
You asked about lump sum investing. This is important. Lump sum should not go fully into equity at one time. Markets move in cycles. So use a staggered method. You can invest the lump sum through STP (Systematic Transfer Plan). You can keep the amount in a liquid fund and set STP toward your chosen growth funds over 6 to 12 months.

This reduces timing risk. It also creates discipline. So your Rs 6 lakh can be deployed gradually. You may use 50% towards core equity funds and 30% toward satellite growth category. The remaining 20% can go into hybrid category. This gives balance and comfort.

» Regular Funds Over Direct Funds
One important point many investors miss. Direct funds look cheaper. But they demand deep knowledge, discipline, and behaviour control. Most investors lose more through emotional selling and wrong timing than they save on expense ratio.

With regular funds through a Mutual Fund Distributor with Certified Financial Planner qualification, you get guidance, structure and correction. The advisory discipline protects you during market extremes. That is more valuable than a small saving in expense ratio.

A personalised planner also tracks portfolio drift, rebalancing need and category shifts. So regular fund investing gives long-term benefit and behaviour coaching.

» Actively Managed Funds over Index or ETF
Some investors choose index funds or ETF thinking they are simple and cheap. But they ignore drawbacks.

Index funds or ETF will not avoid weak companies in the index. They will invest whether the company grows or struggles. There is no fund manager decision making. So when markets are at peak, index funds continue aggressive exposure. In downturns also they fall fully. There is no cushion.

Actively managed funds work with research teams. They can avoid bad sectors. They can shift allocation based on market and economy. Over long term, this gives better alpha and stability. So continuing with actively managed funds creates better wealth compounding.

» SIP Continuation Strategy
Once the rationalisation is done, continue SIPs every month without interruption. Pause and restart behaviour damages compounding power. SIP works best when you go through all market cycles. You benefit more during corrections because cost averaging works.

So continue SIP amount. You can also review SIP increase every year based on income. Increasing SIP by 10 to 15 percent every year helps you reach large corpus faster.

» Asset Allocation Based Approach
One key point in wealth creation is having the right asset mix. Equity gives growth. Hybrid gives balance. Metals give hedge. Debt gives safety. Your asset allocation should stay aligned to your risk profile and time horizon.

Since you are young and have long term horizon, higher equity allocation is fine. But as time moves, rebalancing is important. Rebalancing protects gains and restores allocation.

So review your asset allocation every year or during major life events like child birth, home buying or retirement planning.

» Behaviour Management
Many portfolios fail not due to bad funds. They fail due to bad decisions. Selling during correction. Stopping SIP when market falls. Chasing past return performance. These mistakes reduce wealth.

Your discipline so far is good. Continue to stay patient during volatility. Equity rewards patience and time.

» Financial Goals Clarity
Since you have no children now, you can decide your long-term goals. Typical goals may include:

Retirement

Future child education

Dream lifestyle purchase

Health care reserves

When goals are clear, investment purpose becomes stronger. So you can map each fund category to goal horizon. Short-term goals should not use equity. Long-term goals should use equity with hybrid support.

» Role of Review and Monitoring
Review once in a year is enough. Frequent review can create anxiety. Annual review helps check:

Fund performance

Expense drift

Category relevance

Allocation balance

Then adjust only if needed. This progress helps you stay confident and aligned.

» Taxation Awareness
Equity mutual funds taxation rules are:

Short term (below one year holding) taxable at 20 percent

Long term (above one year holding) gains above Rs 1.25 lakh taxable at 12.5 percent

Debt mutual funds are taxed as per your income slab.

So always hold equity funds for long term. That reduces tax impact and gives better growth.

» SIP Increase Plan
You can create a simple plan to increase SIP over time. For example:

Increase SIP at every salary increment

Increase SIP during bonus time

Use rewards or extra income for investing

This habit accelerates wealth. So by the time you reach 45 to 50 years, your investments could reach a strong level.

» Insurance and Protection
Before investing large, ensure you have term insurance and health insurance. If not already done, it is important. Insurance protects wealth. Without insurance, even a small medical event can impact investment plan. So review this part also. Since you are married, cover both.

» Wealth Behaviour Mindset
You are already disciplined. Just keep these simple principles:

Invest without stopping

Review once a year

Avoid funds overlap

Follow asset allocation

Avoid reacting to media noise

This helps you reach long term milestones.

» Finally
You are on the right track. Only fine tuning and simplification is needed. Your discipline is visible. Your portfolio will grow well with structure, patience and periodic review. Use the Rs 6 lakh with STP approach. And continue SIP with rationalised categories.

With time and consistency, wealth creation becomes effortless and peaceful. You just need to stay committed and avoid overthinking during market movements.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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Tech Careers and Skill Development Expert - Answered on Dec 05, 2025

Career
Dear Sir, I did my BTech from a normal engineering college not very famous. The teaching was not great and hence i did not study well. I tried my best to learn coding including all the technologies like html,css,javascript,react js,dba,php because i wanted to be a web developer But nothing seem to enter my head except html and css. I don't understand a language which has more complexities. Is it because of my lack of experience or not devoting enough time. I am not sure. I did many courses online and tried to do diplomas also abroad which i passed somehow. I recently joined android development course because i like apps but the teaching was so fast that i could not memorize anything. There was no time to even take notes down. During the course i did assignments and understood the code because i have to pass but after the course is over i tend to forget everything. I attempted a lot of interviews. Some of them i even got but could not perform well so they let me go. Now due to the AI booming and job markets in a bad shape i am re-thinking whether to keep studying or whether its just time waste. Since 3 years i am doing labour type of jobs which does not yield anything to me for survival and to pay my expenses. I have the quest to learn everything but as soon as i sit in front of the computer i listen to music or read something else. What should i do to stay more focused? What should i do to make myself believe confident. Is there still scope of IT in todays world? Kindly advise.
Ans: Your story does not show failure.
It shows persistence, effort, and desire to improve.

Most people give up.
You didn’t.
That means you will succeed — but with the right method, not the old one.

...Read more

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