Hi Experts,
My parents are senior citizens. They didnt have income and dependent on me. I want to make them independent by creating some regular income around 10k to 15k every month. I can invest a lumpsum of 15L to genrate the returns for them. Please suggest a good return option for my parents. I went througn SIP, SWP and other funds. But im not clear.i can take moderate to low risk. My aim is to provide them some regular income every month.
Thanks.
Ans: ! It's admirable that you're seeking ways to ensure financial security for your parents. Here's a tailored suggestion to meet your goal:
• Given your moderate to low risk appetite and the objective of generating regular income for your parents, investing the lump sum of 15 lakhs in a combination of debt mutual funds and Senior Citizen Savings Scheme (SCSS) can be a prudent choice.
• Debt mutual funds offer relatively stable returns compared to equity funds and can be ideal for generating regular income. Opt for debt funds with a focus on short to medium-term instruments to minimize interest rate risk.
• Consider allocating a portion of the lump sum to a well-diversified debt mutual fund portfolio comprising short-duration funds, corporate bond funds, and banking and PSU funds. These funds have the potential to provide regular income through periodic interest payouts.
• Additionally, investing a portion of the lump sum in the Senior Citizen Savings Scheme (SCSS) can offer guaranteed returns along with tax benefits. SCSS is specifically designed for senior citizens and provides a fixed interest rate payable quarterly.
• It's crucial to assess the risk associated with each investment option and ensure adequate diversification to mitigate risks. Regularly review the portfolio's performance and make adjustments as needed to meet your parents' income requirements.
• Lastly, consult with a Certified Financial Planner to tailor an investment strategy that aligns with your parents' financial goals, risk tolerance, and investment horizon. They can provide personalized guidance and help you navigate the complexities of investment options to achieve your desired outcome.
By following these steps, you can create a reliable source of income for your parents and help them achieve financial independence. Best of luck!