Is putting 1cr in Jeevan Shanti worth it for monthly income and safety?

Ans: Investing your entire Rs. 1 crore to ensure steady income needs thorough evaluation. Below is a detailed assessment to help you make an informed decision.

Key Considerations for Regular Income
Regular income is essential for meeting ongoing expenses, especially in retirement.

Your goal of steady income must balance safety, liquidity, and inflation protection.

Diversification across assets ensures reduced risk and enhanced returns.

Risks of Putting All Money in One Product
Lack of Diversification: Investing all in one option concentrates risk.

Inflation Risk: Fixed payouts lose purchasing power over time.

Liquidity Concerns: Locking in money reduces access for emergencies.

Tax Implications: Income from such investments may be fully taxable.

Inflation-Protected Alternatives
Consider investments offering growth and periodic income.

Balanced mutual funds provide equity exposure and regular dividends.

Diversify between equity and debt for both stability and growth.

Safety vs. Returns
Guaranteed-income plans offer safety but limit returns.

Active mutual funds give inflation-beating returns over the long term.

Bank or corporate fixed deposits can complement other investments.

Evaluation of Traditional Options
Traditional fixed-income plans may fail to keep pace with inflation.

The lack of flexibility in withdrawals can be a drawback.

Benefits of Actively Managed Mutual Funds
Professional Management: Fund managers actively track markets.

Inflation Protection: Equity exposure ensures better long-term growth.

Tax Efficiency: Capital gains on equities are taxed favorably.

Flexibility: Options to withdraw through systematic withdrawal plans (SWP).

Why Avoid Annuities or Similar Products
Fixed annuities fail to adjust payouts to inflation.

Lack of liquidity limits funds during emergencies.

Returns may not match other growth-oriented products.

Practical Steps to Build Regular Income
Invest part in mutual funds for systematic withdrawals.

Allocate a portion to fixed deposits for emergencies.

Use balanced products to minimize market volatility risks.

Tax Efficiency in Investments
Mutual funds offer tax benefits compared to fixed-income plans.

Long-term equity gains up to Rs 1.25 lakh are tax-free annually.

Monitoring and Adjustment
Regularly review portfolio performance.

Rebalance between equity and debt as per market conditions.

Consider rising expenses due to inflation and healthcare.

Seeking Expert Guidance
A Certified Financial Planner (CFP) can help tailor your investments.

Customization ensures your portfolio aligns with financial goals.

Final Insights
Putting all Rs. 1 crore into one product for steady income has limitations. Diversifying investments ensures safety, liquidity, and growth. Opt for a balanced portfolio combining mutual funds and fixed-income assets. Regular monitoring and adjustments will keep your plan on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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