Hello Sir I am Naveen and i am 31 years old, I am planning to retire at the age of 50 with 5 Cr and monthly income 1 L My Investment is PPF 400000 ULIP 250000 FD 100000 EPF 300000 NPS 200000(every year 50000 ) Stock 800000 MF 700000 Child plan Own house, taken Health insurance 20 L and Term insurance 1 Cr . Please advise me how much i need to increase my investment for my better retirement

Ans: You are 46 years old. Your combined monthly income with your husband is Rs. 1,25,000. You have the following assets:

EPF: Rs. 11,00,000
Shares: Rs. 35,00,000
Mutual Funds: Rs. 27,00,000
Own House
Bajaj Policies worth Rs. 55,00,000 (maturing to Rs. 90,00,000 in 5 years)
Other Life Insurances: Rs. 5,00,000
Gold: 700 grams, valued at Rs. 45,00,000
Diamond Jewelry: Rs. 12,00,000
Assessing Your Financial Goals
To create an effective investment plan, we need to identify your financial goals. These may include:

Retirement planning
Children's education and future needs
Healthcare and insurance needs
Current Financial Assets
Let's summarise your current financial assets:

EPF: Rs. 11,00,000
Shares: Rs. 35,00,000
Mutual Funds: Rs. 27,00,000
Bajaj Policies (current value): Rs. 55,00,000
Life Insurances: Rs. 5,00,000
Gold: Rs. 45,00,000
Diamond Jewelry: Rs. 12,00,000
Monthly Savings and Investments
After accounting for your monthly expenses, let's assume you can save a significant portion of your income.

Investment Strategy
1. Emergency Fund:

Maintain an emergency fund covering 6-12 months of expenses. This should be in a liquid fund or savings account.

2. Surrender Investment-cum-Insurance Policies:

Surrender your Bajaj policies and other investment-cum-insurance policies. Reinvest the proceeds into mutual funds. This can potentially offer higher returns.

3. EPF and Mutual Funds:

Continue contributions to EPF and mutual funds. These offer good returns over the long term.

4. Shares:

Diversify your stock portfolio. Consider investing in companies with strong growth potential.

5. Gold and Jewelry:

Gold and diamond jewelry are good long-term assets. Consider them as part of your wealth.

Monthly Investment Allocation
Retirement Planning:

Invest Rs. 50,000 per month in mutual funds.
Choose a mix of equity and debt funds.
Actively managed funds can outperform index funds.
Children's Education and Future:

Allocate Rs. 25,000 per month for their future.
Invest in child-specific mutual funds or education plans.
Healthcare and Insurance Needs:

Ensure adequate health insurance coverage.
Review and adjust your insurance policies.
Risk Management
1. Diversification:

Spread investments across different assets. This reduces risk and ensures stability.

2. Insurance:

Ensure comprehensive insurance coverage. Health and term insurance are essential.

Tax Planning
1. Tax-efficient Investments:

Invest in tax-saving instruments like ELSS. These offer tax benefits and potential growth.

2. Tax-saving Strategies:

Utilise strategies to reduce tax liability. Plan investments to maximise tax benefits.

Monitoring and Review
1. Regular Monitoring:

Monitor your investments regularly. Track performance and make necessary adjustments.

2. Annual Review:

Review your financial plan annually. Assess progress and adjust investments based on performance.

Estimating Retirement Corpus
Assuming a balanced portfolio, you can expect an annual return of 10-12%. To determine the exact corpus needed for retirement, consider your desired lifestyle and expenses. Consulting with a Certified Financial Planner (CFP) will provide a detailed analysis and accurate estimate.

Final Insights
Achieving a comfortable retirement requires disciplined planning. Surrender investment-cum-insurance policies and reinvest in mutual funds. Invest systematically, diversify your portfolio, and utilise tax-saving strategies. With careful planning and professional guidance, you can build a secure financial future and achieve your retirement goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Current Financial Status

Naveen, at 31, you have a good start towards retirement. Your current investments are as follows:

PPF: Rs 4,00,000
LIC: Rs 2,50,000
FD: Rs 2,00,000
EPF: Rs 3,00,000
Stocks: Rs 8,00,000 + Rs 7,00,000
Child Plan: Rs 50,000/year
NPS: Rs 50,000/year
Own house
These investments show a diversified portfolio. Your early start is commendable.

Investment Evaluation

Your investments in various instruments are sound. However, more balance is needed between growth and safety.

PPF and EPF: Safe and tax-efficient but limited growth.
LIC: Offers insurance but limited returns.
FD: Safe but low returns.
Stocks: High growth potential but volatile.
Child Plan and NPS: Good for specific goals but may need additional diversification.
Retirement Goals

To retire comfortably at 50, you need a substantial corpus. Consider the following:

Current Age: 31 years
Retirement Age: 50 years
Years to Retirement: 19 years
Calculating Retirement Corpus

You need to estimate your monthly expenses at retirement. Include all costs like living expenses, healthcare, travel, etc. Account for inflation as well. Assuming an average inflation rate of 6%, your expenses will significantly increase by the time you retire.

Investment Strategy

To achieve your retirement goals, consider the following adjustments:

Increase Contributions: Increase your investments in high-growth instruments.
Mutual Funds: Actively managed mutual funds can offer better returns than direct funds. Consider SIPs in equity mutual funds for long-term growth.
Diversify Stocks: Ensure your stock investments are well-diversified. Avoid putting too much in one sector or company.
Review LIC Policies: If you have traditional LIC policies, evaluate their returns. Consider surrendering and reinvesting in mutual funds if the returns are low.
Increase NPS Contribution: NPS is tax-efficient and offers good returns. Consider increasing your contribution.
Emergency Fund

Ensure you have an emergency fund. This should cover at least 6 months of expenses. Keep it in a liquid fund for easy access.

Regular Review

Monitor Investments: Regularly review your portfolio. Adjust based on performance and market conditions.
Consult a Certified Financial Planner: Get personalized advice to stay on track.
Tax Planning

Tax Efficiency: Invest in tax-efficient instruments. This maximizes your post-tax returns.
Regular Review: Review your tax planning strategies annually.
Lifestyle Considerations

Retirement Lifestyle: Plan for your retirement lifestyle. Include travel, hobbies, and other activities.
Healthcare Costs: Healthcare can be a significant expense. Ensure you have adequate health insurance.
Final Insights

Naveen, your current investments are a good start. To achieve a comfortable retirement at 50, you need to increase your investments in growth-oriented instruments. Regularly review and adjust your portfolio. Consult a Certified Financial Planner for personalized advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in