EARLY RETIREMENT PLANNING

Q & A Forum › Category: Retirement Planning › EARLY RETIREMENT PLANNING

shineshibu asked 10 years ago

Hi Srikanth, Am an 38 yrs Nri, with wife and kids aged 6 and 4,planning to return for good. My investments at present to look in after 15 years are equities 60 lakhs, mf of 10 lakhs each in Franklin India Smaller Companies Fund - Growth,Axis Fixed Income Opportunities Fund - Growth, DSP Blackrock Equity Savings Fund - Growth,Franklin India High Growth companies fund, Icici Prudential Value discovery fund, invested this year. what will be the value of these after 15 years on an average. For my kids i have invested 25 lakhs each in Axis Childrens Gift Fund - Growth lock in for their higher education. all these investment are only looked upon after am 55 years of age. from present year to age 55 - fds of 2 cr, which i need to see how and where i can invest to get a monthly income of 50000 to 60000 inr per month. getting rental income of 32000 per month. these 2 income should cover my monthly household income of 1 lakhs per month. Kids education need advice how i can invest an amount of 60 lakhs, so that every year i get an amount for their school fees, considering 3.6 lakhs present year and increase of 15% every year for the next 12 years. i have a house of my own, no other liability. i have no plans to take a life insurance, will go for a medical insurance for my family. Cash deposit of 20 lakhs Pls advise me if my present investments are on the right track.

3 Answers

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Sreekanth Staff answered 10 years ago

Hi, It's not possible to predict the future. Realistically, one can expect returns of around 12% from Equity oriented products if the time-frame is >10 years. Of-course, need to keep an eye on the Portfolio & its performance. 1 - Suggest you to consider taking Term insurance plan. Kindly read below articles; http://www.relakhs.com/insurance-importance-life-health-accident-covers/ http://www.relakhs.com/best-online-term-insurance-plans-india/ 2 - Yes, advisable to take health insurance and Personal Accident cover (with disability cover) too. Read: http://www.relakhs.com/best-personal-accident-insurance-policies-in-india-details-comparison/ http://www.relakhs.com/best-health-insurance-comparison-websites-portals/ 3 - Kindly use the calculators available in the below articles to arrive at approx required savings to meet your long-term goals ie kids' education goal & retirement & you may revert to me with your queries; http://www.relakhs.com/calculate-kids-education-goal-amount/ http://www.relakhs.com/retirement-planning-calculator-3-easy-steps/

shineshibu replied 10 years ago

Hi Sreekanth,
Thanks for the reply, but few questions still not answered.
1. How and where should i invest 2cr, so that i can get a monthly return of 50000 to 60000 inr for my monthly expenses, should i go for 10 years of bank fds? SAFE INVESTMENT LOW RISK
2. Kids education from std 1 to 10th, how can i invest 60 lacs, so that i can get or take an amount of 3.6lacs which increase annually by 15% for their school fees.Should i go in for bank fds, as to a certain amount maturing every year that i can use for the schools fees. SAFE INVESTMENT NO RISK
3. is my selection of mfs right for a long term ??

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Sreekanth Staff answered 10 years ago

Hi, 1 - Do you want to invest Rs 2 crore and get monthly income of Rs 50,000 per month for next coming years (or) do you want to invest Rs 2 crore for 10 years and then expect Rs 50k monthly return for rest of your life? Kindly let me know.. 2 - 15% is it the return you are expecting from the investment of Rs 50 Lakh or the expected increase in School fees? 3 - May I know the reason/objective for investing in Axis Fixed income fund? Also, DSP Equity savings fund is a newly launched fund and there are better funds in 'Hyrbid-Equity oriented' category. Read: http://www.relakhs.com/top-best-balanced-mutual-funds-returns/ http://www.relakhs.com/top-15-best-mutual-funds-schemes-2016-sip-lumpsum/

shineshibu replied 10 years ago

Hi,
1.Considering that i need Rs 50000 per month for the rest of my life, how do i go about investing an amount of 2cr. I thought of investing it in bank fds as a safer bet.
2. 15% is the increase in school feels am expecting every year. how do i invest Rs 50lakhs so that every year i get a certain amount that is good enough to pay my kids schools fees. present year fee for kinder gardern and grade 1 for both my kids is around 3.6 lakhs
3. as i had opened my account in axis bank, my fund manager had asked me to invest in this. i was very new to all these kinds of investments.

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Sreekanth Staff answered 10 years ago

Hi, Assuming life expectancy to be 80 years, the remaining period is 22 years (60-38). To get Rs 6 Lakh per year for next 22 years, assuming rate of return to be 9% & inflation as 8%, you need to invest a corpus of Rs 1.2 crore now. With Rs 2 crore, you can get more monthly income or you can invest Rs 80 Lakh for some other goals. To get 9% return & period income of Rs 50,000 pm - you can consider options like Post office MIS, NCDs (secured & monthly payment plans), Mutual Fund MIP - Growth plan with Systematic Withdrawal option, Dynamic Debt funds etc., Kindly read: http://www.relakhs.com/list-of-best-investment-options-schemes-in-india/ http://www.relakhs.com/best-monthly-income-plans-india-mutual-funds/ http://www.relakhs.com/best-debt-mutual-funds-india-top-debt-funds/ 2 - School Fees : If you invest Rs 50 Lakh, assuming education expenses inflation @ 15%, rate of return as 9%, period is next 15 years, you can get around Rs 2.1 Lakh per annum. So to get Rs 3.6 Lakh per annum, you can contribute more instead of Rs 50 Lakh (you may consider to invest Rs 30 Lakh more and can consider this from the above Rs 80 Lakh (part of Rs 2 cr) for this). Investment options - you may consider same as above.

shineshibu replied 10 years ago

Thanks a lot for you advise.