Sir, I am retired person of 66 years. I have 22 Lakhs in Mutual Fund in SWP plan, get monthly rent Rs. 12000. I am soon going to get Rs. 1.5 Cr. (After tax) after selling property. I am staying in my Flat. I want you to Suggest me where i invest so that i get regular income & appreciation. I have mediclaim of Rs. 5 Lakhs jointly for my wife & me
Ans: At 66 years old, you are retired and living in your own flat. You currently have Rs. 22 lakhs in a Mutual Fund Systematic Withdrawal Plan (SWP) and receive a monthly rent of Rs. 12,000. Soon, you will receive Rs. 1.5 crore after selling your property, and you have a mediclaim policy of Rs. 5 lakh covering both you and your wife.
Understanding Your Financial Goals
Your primary goal is to secure a regular income while also ensuring that your investments appreciate over time. This is crucial to maintaining your lifestyle, accounting for inflation, and providing for any unforeseen expenses.
Importance of Regular Income and Capital Preservation
At your age, preserving capital while generating a steady income is paramount. The focus should be on low-risk investments that provide consistent returns while also offering some growth potential.
Diversified Investment Strategy
To meet your objectives, it’s essential to diversify your investments. Diversification helps in balancing risk and ensuring that your portfolio remains stable even if certain investments underperform.
1. Debt Mutual Funds (40%)
Debt funds are ideal for conservative investors. They offer regular income with lower risk compared to equity.
Consider investing in debt funds that focus on high-quality bonds. This ensures stability and regular payouts.
SWP from these funds can provide you with a steady monthly income.
2. Senior Citizen Savings Scheme (SCSS) (20%)
SCSS is a government-backed scheme offering regular interest payments.
It’s a safe investment option with decent returns, ideal for your regular income needs.
The interest is payable quarterly, which can supplement your monthly income.
3. Monthly Income Plans (MIPs) (20%)
MIPs invest in a mix of debt and equity, providing a balance between income and growth.
They offer regular monthly income, though the returns may fluctuate slightly based on market conditions.
This can be a good addition to your portfolio for some equity exposure with lower risk.
4. Fixed Deposits (FDs) (10%)
FDs offer safety and guaranteed returns. Although the interest rates are low, they provide assured income.
Keep a portion of your funds in FDs for immediate liquidity and safety.
5. Equity Mutual Funds (10%)
While equity carries higher risk, a small allocation is essential for growth and beating inflation.
Focus on conservative equity funds that invest in large-cap companies with stable performance.
This portion should be for long-term growth rather than immediate income.
Managing the Rs. 1.5 Crore Corpus
With the Rs. 1.5 crore corpus, a balanced approach to allocation is important:
Rs. 60 lakh in Debt Mutual Funds to generate steady income.
Rs. 30 lakh in SCSS for regular quarterly interest.
Rs. 30 lakh in MIPs for a mix of income and growth.
Rs. 15 lakh in Fixed Deposits for safety and liquidity.
Rs. 15 lakh in Equity Mutual Funds for long-term growth.
Health Insurance Consideration
Your current mediclaim policy of Rs. 5 lakh might not be sufficient, considering rising healthcare costs. Consider enhancing your coverage or opting for a top-up plan that provides additional coverage at a lower premium.
Final Insights
Your financial plan should focus on generating regular income, preserving your capital, and allowing for some growth to counter inflation. By diversifying your investments across debt, equity, and fixed-income instruments, you can achieve a balanced portfolio that meets your income needs while also offering potential for appreciation.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in