Need advice on Retirement and financial planning

Q & A Forum › Category: Financial Planning › Need advice on Retirement and financial planning

kdbulls asked 10 years ago

Hello Srikanth, I am 41 and single; my parents are senior citizens and partially dependent on me. I have no loans or mortgages and have provided funds for medical emergency of my parents. We have medical insurance policies for all of us. Please find below my current portfolio, monthly expenses and premiums towards policies and medical insurances. I would like invest/re-invest wisely towards my retirement and need your advice. In FDs - 30 Lakhs Infrastructure Bonds – 1 Lakh Medical emergency – 6 Lakhs Provident fund – 15 Lakhs PPF – 3.5 Lakhs Monthly take home – 1.25 Lakhs Monthly expenses – 40 K Yearly medical premiums – 40K Yearly policy premiums – 3 Lakhs Here are the existing policies: Institution Premium Frequency Date of Maturity Sum Assured LIC 4884 Half-yearly 9-Jan-18 200000 Kotak Safe Investment 12,644 Half-yearly 28-Mar-34 1000000 Kotak Capital Multiplier 50,041 Annual 10-Oct-25 900000 ING Vysya 10,100 Annual 9-Feb-24 2100000 HDFC Life 207,260 Annual 30-Mar-36 20000000 I can invest up to 40-50K each month in SIP. Can you please advice on options for investment? Also can you advise how I can redeploy the money in FDs for better return? Many thanks, Chandrasekaran

3 Answers

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Sreekanth Staff answered 10 years ago

Hi , 1 - May I know where have you invested/saved the emergency fund corpus? 2 - Any specific objective for saving Rs 30 Lakh in FDs? Read: http://www.relakhs.com/avoid-fixed-deposits-rds-for-long-term/ 3 - Are these life insurance policies in your name? (insured person) 4 - Kindly share the Commencement date & Insurance plan name details. 5 - Do you have Personal Accident insurance plan?

kdbulls replied 10 years ago

Srikanth,
Thanks for your swift reply. Find below my responses.
1. Emergency fund corpus is also a FD.
2. Since I was outside of India for the last 3 years, I decided park it in fixed deposits.
3. Yes, all the policies are in my name.
4.
– Kotak Safe Investment Plan II (UIN: 107L021V01) – April 2004
– Kotak Capital Multiplier Plan-(UIN-107N011V01) – Feb 2010
– Exide Life Creating Life Child- Feb 2004
– HDFC Life – March 2016

5. Yes, I have a personal accident and critical insurance plan.

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Sreekanth Staff answered 10 years ago

Hi, 1 - Contingency Fund of Rs 30 Lakh may not be required. 2 - HDFC Life Plan name?

Kotak Safe Investment Plan II can give you maturity returns of around 7 to 8%.
Kotak Capital Multiplier Plan is an endowment fund. You may get very low returns from traditional plans

Read: http://www.relakhs.com/traditional-life-insurance-plan/ May I know the reason for investing in above two plans and also about Exide Life Creating Life Child? Meanwhile, kindly go through below article and calculate approx amount of savings required for creating your Retirement Corpus. http://www.relakhs.com/retirement-planning-calculator-3-easy-steps/

kdbulls replied 10 years ago

Hi Sreekanth,
Please find my responses below.
1. Yes, I want to invest 30Laks in an instrument that gives better yield. Please suggest.
2. HDFC Life Super Income Plan
3. Should I pre-close close Kotak Safe Investment Plan and re-invest at a higher rate of return? I’ve allocated the following investment percentages, any changes needs?
Money Market – 10%
Gilt fund – 10%
Balanced fund -10%
Growth fund -10%
4. Kotak Capital Multiplier Plan – term of 15 years and 5 years premium paid. Do you want me to pre-close this and invest elsewhere?
5. ING Creating Life Child Protection plan was renamed as Exide Life Creating Life Child plan. It is an ordinary life insurance policy and premium term finishes in 2024 and yearly premium is 10,200 rs.

I was recommended all these policies by an insurance agent. Looking forward to your recommendations.

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Sreekanth Staff answered 10 years ago

Hi, 1 - Can consider investing in Equity oriented mutual funds. You may create STPs (systematic Transfer plans) instead of investing lump sum amount. STP for ex - You can invest say Rs 6 lakhs HDFC liquid fund (debt fund) and transfer Rs 50k per month to say HDFC balanced fund. Read: http://www.relakhs.com/top-15-best-mutual-funds-schemes-2016-sip-lumpsum/ http://www.relakhs.com/list-of-best-investment-options-schemes-in-india/ 2 - I believe you have unwanted & costly life insurance policies which may lead to erosion of your wealth. You may consider buying a term plan (if you do not have one) with adequate cover and discontinue these plans. Even investments in PPF a/c can give you better returns than some of these traditional life insurance plans. (Kindly do not miss reading the suggested articles). Read: http://www.relakhs.com/term-insurance-plan-a-waste-of-money/ http://www.relakhs.com/best-online-term-insurance-plans-india/