Hi Sanjeev, I am 43 years old. I have a monthly sip of 35k going on. I have started investing in mutual fund and sip from year 2013. Total mutual fund plus sip current market value is 1 core 9 lakhs . I plan to invest 35 k per month more for 7 to 8 years , when i want to leave job and do something else. Can you tell me what will be my corpus in 7 to 8 years down the line taking both current valution plus what i am going to continue investing?Also, i have another 1 corore total in other investment like Voluntary provident fund, Epf, ppf and esops from my company and pension fund . Here i do a monthly investment of around 80 k via mostly through company for tax savings. So what will be my total corpus after 7 to 8 yrs. Also, is it good for retirement considering my current monthly expense us 1 lakh.

Ans: Hello;

You may check the stock overlap in the two funds, if it is more then 20% then you may shift the corpus in a staggered way to avoid CG tax.

If the stock overlap is less than 20% then you may retain it because it gives you a relatively distinct and diversified stock holding.

You may be required to do this exercise each year but it will hardly take much time so it's okay.

Happy Investing;

Ans: Hello;

You may invest the investible surplus of your salary into PPF, NPS (100% G option), NSCs, KVPs as safe and secure investments.

Although they don't have a default risk being GOI schemes, they have interest rate risk, low return risk.

Seek advice from an investment advisor or a certified financial planner if you need help.

Happy Investing;
X: @mars_invest

Ans: Hello;

What is the time horizon for which you want to invest?

For 3-5 year duration she may begin her sip in a good balanced advantage fund. You may select any fund from the top quartile in this category for your time horizon.

Happy Investing;
X: @mars_invest

Ans: Your portfolio showcases disciplined investments:

Rs. 1 crore in mutual funds.

Rs. 1 crore in PMS.

Rs. 20 lakh in PPF.

Rs. 60 lakh in fixed deposits.

A real estate asset worth Rs. 2 crore to be sold in 6 years.

A home loan liability of Rs. 65 lakh.

You aim for Rs. 2 lakh monthly expenses post-retirement at 50.

This diversified portfolio indicates a strong foundation. Let us optimise it for sustained income and financial stability.

Key Priorities
Generating a stable income post-retirement.

Protecting against inflation and rising costs.

Ensuring liquidity and tax efficiency.

Preparing for contingencies, such as medical expenses.

Strategy for Future Expenses
Step 1: Use Real Estate Sale Proceeds Strategically
Selling the property in six years will generate Rs. 2 crore.

Pay off the home loan of Rs. 65 lakh to become debt-free.

Invest the remaining Rs. 1.35 crore in instruments providing monthly cash flow.

Consider options like SWPs from mutual funds and balanced allocation.

Step 2: Strengthen Mutual Fund Investments
Diversify across large-cap, mid-cap, and balanced advantage categories.

Continue holding actively managed funds for long-term growth.

Use a Certified Financial Planner (CFP) for advice on optimising fund selection.

Prioritise regular funds through an MFD with CFP credentials over direct plans.

Step 3: Redeploy PMS Investments
Evaluate the performance of your PMS portfolio.

PMS often has high fees and limited flexibility.

Move funds to mutual funds for better cost efficiency and liquidity.

Allocate to equity mutual funds for higher long-term growth potential.

Step 4: Optimise PPF and Fixed Deposit Holdings
Continue PPF contributions for tax-free, stable returns.

PPF is a low-risk asset and complements equity investments.

Fixed deposits should be reduced to avoid overexposure to low-yield instruments.

Reinvest part of the FD corpus into debt mutual funds for better returns and tax efficiency.

Step 5: Create an Emergency Fund
Set aside Rs. 10-12 lakh as an emergency fund.

Use a mix of liquid funds and high-interest savings accounts for this purpose.

This fund should cover unexpected expenses like medical emergencies or sudden repairs.

Step 6: Plan for Retirement Income
Invest in a systematic withdrawal plan (SWP) for steady income.

Use Rs. 2 crore from mutual funds and PMS, allocating for growth and stability.

Ensure a mix of equity and debt for inflation-adjusted returns.

Focus on capital preservation while generating income.

Addressing Inflation
Inflation will erode Rs. 2 lakh’s purchasing power over time.

Invest in equity and balanced funds for long-term growth.

Review investments every year to rebalance based on inflation trends.

Tax Efficiency
Mutual fund capital gains attract taxes as per the new rules.

Equity mutual funds: LTCG above Rs. 1.25 lakh taxed at 12.5%.

Debt mutual funds taxed as per your income tax slab.

PPF is tax-free and should remain untouched till maturity.

Strategise withdrawals to minimise tax liability.

Healthcare and Insurance Planning
Assess your existing health insurance.

Upgrade your coverage if needed, keeping future medical inflation in mind.

Build a dedicated healthcare corpus.

Consider critical illness coverage for additional protection.

Retirement Lifestyle Adjustments
Maintain a lifestyle matching your retirement income.

Control discretionary spending to extend the portfolio's longevity.

Track expenses and ensure spending stays within the planned budget.

Final Insights
Your existing portfolio reflects strong savings discipline.

Focus on reallocating low-return assets to higher-yield investments.

Plan withdrawals and investments for tax efficiency and inflation protection.

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

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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