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Ans: You are 50 years old and plan to retire at 52 by 2026. You aim to build a retirement corpus of Rs 1 crore. Your current investment allocation in mutual funds is as follows:

HDFC Balance Advantage Fund: 30%
SBI Conservative Hybrid Fund: 30%
ICICI Prudential Equity and Debt Fund: 20%
Kotak Equity Savings Fund: 10%
Quant Multi Asset Fund: 10%
Starting from 2027, you plan to withdraw Rs 40,000 monthly, adjusted for 6% inflation annually.

Evaluating Your Portfolio
Asset Allocation
Your portfolio has a mix of balanced and hybrid funds, which is suitable for a conservative to moderate risk profile. Here's an evaluation of each fund type:

Balance Advantage Fund: Provides a balance between equity and debt, adjusting based on market conditions.
Conservative Hybrid Fund: Focuses more on debt, offering stability with limited equity exposure.
Equity and Debt Fund: Offers a balanced mix of equity and debt, suitable for moderate risk.
Equity Savings Fund: Provides equity exposure with a hedge through debt and arbitrage.
Multi Asset Fund: Invests in multiple asset classes, reducing risk through diversification.
Inflation-Adjusted Withdrawal
Planning to withdraw Rs 40,000 monthly, adjusted for 6% inflation, is a prudent approach to ensure your corpus lasts through your retirement years. However, it’s important to ensure the portfolio generates sufficient returns to meet these withdrawals.

Suggested Improvements
Diversification and Risk Management
While your current allocation is good, consider the following adjustments for better diversification and risk management:

Increase Equity Exposure: To ensure long-term growth, you might want to increase equity exposure slightly. Consider reallocating a portion from the Conservative Hybrid Fund to a pure equity fund for higher returns.
Include a Debt Fund: Adding a dedicated debt fund can provide stability and regular income, balancing the equity exposure.
Proposed Portfolio Allocation
New Allocation
HDFC Balance Advantage Fund: 25%
SBI Conservative Hybrid Fund: 20%
ICICI Prudential Equity and Debt Fund: 20%
Kotak Equity Savings Fund: 10%
Quant Multi Asset Fund: 10%
Large-Cap Equity Fund: 10%
Short-Term Debt Fund: 5%
Benefits of the New Allocation
Increased Growth Potential: Adding a Large-Cap Equity Fund enhances growth potential.
Enhanced Stability: Including a Short-Term Debt Fund provides additional stability and regular income.
Balanced Risk: The mix ensures a balance between growth and stability, reducing overall portfolio risk.
Implementation Strategy
Systematic Withdrawal Plan (SWP)
Post-retirement, use a Systematic Withdrawal Plan (SWP) to manage your withdrawals. This ensures a steady income stream while keeping your corpus invested.

Start SWP: From 2027, initiate SWP from your mutual funds.
Adjust for Inflation: Withdraw Rs 40,000 monthly, increasing annually by 6%.
Regular Monitoring and Review
Regularly review and adjust your portfolio to ensure it aligns with your withdrawal needs and market conditions.

Annual Reviews: Assess performance and adjust as needed.
Consult a Certified Financial Planner: For personalized advice and strategy adjustments.
Final Insights
Your current mutual fund allocation is good but can be improved for better growth and stability. Consider increasing equity exposure slightly and adding a dedicated debt fund. Use a Systematic Withdrawal Plan to manage your withdrawals post-retirement. Regularly review your portfolio to stay on track with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in