RETIREMENT BENEFITS INVESTMENT

Q & A Forum › Category: Investments › RETIREMENT BENEFITS INVESTMENT

VENOO asked 9 years ago

Dear Shree, In the present interest rate scenario, is it advisable to invest in debt funds for my friend who is retiring tomorrow, whose only daughter has still 4-5 years of education and at the end, her marriage. He has no other goals except her education, marriage and his retirement corpus. He is getting retirement benefits of Rs.55 lakhs. He will be getting Rs.32000 pension per month and HDFC annuity of Rs.20000 per annum (already invested lumpsum). I wanted to advise him to invest in debt fund. But further interest rate cuts may impact the returns there. Of course he has investment in PPF to the extent of Rs.10 lakhs (maturing in 2018) for corpus. I am a follower of your blog. Please advise. Liquid funds and balanced funds are the choice?

2 Answers

1 Vote Up Vote Down

Sreekanth Staff answered 9 years ago

Hi, Kindly note that actually rate cuts (if any) can lead to increase in Debt fund returns (so it is otherwise). As there were no rate cuts in the last monetary policy review by RBI (feb 2017), many of the debt funds lost decent gains this month, as many of the market participants were expecting rate cuts to happen. Also, do note that Debt funds too are associated with certain types of risks. They are not completely safe and the returns are not guaranteed. (trying to make you be aware :) ) Ex: Recent 5 to 10% loss in Taurus debt funds in just 2 to 3 days. Read : Taurus debt funds crash.. https://www.relakhs.com/debt-funds-types-benefits-risk-vs-return/ You may suggest him to go through below articles and analyze if the expected corpus for the said goals can be funded through retirement benefits amount. https://www.relakhs.com/calculate-kids-education-goal-amount/ https://www.relakhs.com/retirement-planning-calculator-3-easy-steps/

VENOO replied 9 years ago

Thank u Sree. The articles suggested by u are very good, particularly, Debt funds: type,risk vs return is the best article on debt funds I have ever read. It is simple and to the point. Thank u once again. I request you to post one article on ‘retirement benefits investing’ in these days of lower deposit interest rates which helps many retired people like me. Because after receiving lumpsum amount of retirement funds, retired people are confused and afraid of funds erosion if wrong investments are made. I am a great fan of you since beginning and I heartfully wish u and your family a happy, prosperous and fulfilled life with the blessings of the Almighty. KEEP UP THE GOOD WORK.
–well wisher–b.venugopal

0 Vote Up Vote Down

Sreekanth Staff answered 9 years ago

Dear Sir, Kindly note that not every Retire will have same investment objectives and requirements. So, not advisable to write a generic article on Retirement corpus investment avenues. But I have listed down all possible investment avenues in one article which can be referred by any investor; https://www.relakhs.com/list-of-best-investment-options-schemes-in-india/ Thank you so much for your kind words :)