Hi Sreeekanth,
I am 47 yrs old finance professional and looking for your advise for retirement and medical planing. Just to share some vital facts , which needs to be considered at your end are here-under :
- My wife is also working.
- our present income is in the range of Rs 80 lacs pa ( 50% each)and we are staying with my parents in their house..
- My spouse is suffering with some non curable neuro disease , which is progressive in nature. Her medical condition may impact her job continuity down the line, which is unpredictable. I presume a tleast she will be able to work for another 5 yrs.
- Both of us are covered under employer medical group policy.In addition to the same I have taken Rs 20 lac medical policy for my wife and Rs 10 lace for self -individual basis.
- My elder son is in 4th year of engineering and younger one is in 9th. Already completed the payment for elder one last year of education. Maintaing a separate corpus for younger one for Rs 33 lacs
- Have one house which is given on rent by us - Rs 0.35 lacs per month.
- Invested in another house for which possession is due in early 2017 and I can not expect a rent for the same. Last amount payable for possession has been parked separately by me in bank FD.
- Maintaining a separate bank FD of Rs 1.75 lacs for emergency fund.
- Already possessing sufficient gold for marriage of both my son.
- As on date I am having corpus of Rs 1.15 lacs for my retirement in the form of PPF,PF, bonds, corporate FD etc.
- Annual expenditure of Rs 40 lacs pa
- In future I will be getting the share of Rs 1.5 crores ( property 3 to 3.5 cr) from parental property . As mentioned earlier presently staying with them. We are two brothers.
- Whether medical policy level Rs 20 and Rs 10 lac is sufficient from old age perspective?
- I intend to have one more house from which I can get some rental income after retirement? I expect a income of Rs 15000/- per month from FY 2018 end from the house which we are supposed to take possession in 2017 .
- Present rental income of Rs 0.35 will not be applicable in future as I am going to self occupy the said house in future. I will be requiring Rs 25-30 lacs for the renovation of the said house, whereas I am going to get my share of Rs 1.5 cr from ancestral property in future. Presently I am staying with my parents.
- Advise : How much fund i will be requiring after retirement considering that we have a higher component of medical expenses at present ?
- Where I should invest now ? I am considering the option of investment in MF like Birla etc as suggested in one of your article.
- Can you suggest some name in long/short and balanced MF for long term investment .
- Please note in my young age I have gone with pessimistic approach and not invested in equity etc , much against the well know financial advises . I rather opted for secured investment opportunity to cater to our basic responsibility like house, son education etc.
- Much against the normal financial advise , I presume that its a time for me now to take some aggressive investment with higher return.
4 Answers
Dear Mukesh,
1 - Do both of you have Life insurance cover? & Personal Accident insurance coverage?
2 - I believe that you can enhance health insurance sum assured (for self & spouse), may be by Rs 10 Lakh more. You may consider buying a Super Top up plan instead of a Regular one.
Kindly read:
http://www.relakhs.com/top-up-health-insurance-plans-super-top-up-india/
3 - I believe that may have to increase your Emergency Fund corpus (can be atleast 6 times of your monthly expenses). You may have a look at combination of Cash + FD + Liquid Fund + Arbitrage Fund.
Read:
http://www.relakhs.com/best-debt-mutual-funds-india-top-debt-funds/
http://www.relakhs.com/best-arbitrage-funds-returns/
4 - You may use the calculator available in the below article to calculate the required amount of savings for your younger Son's higher education.
http://www.relakhs.com/calculate-kids-education-goal-amount/
5 - Did you plan for your Retirement goal?
Read :
http://www.relakhs.com/retirement-planning-calculator-3-easy-steps/
6 - May I know, when would you be receiving your share in ancestral property?
Dear Srikanth,
Thanks for your advise. In response to your mail,pl note the following :
- Maintaining sufficient life and accident insurance cover.
- Am already in process of increase the medical cover by another 8 lacs as top up option with lower premium.
- Maintaining enough liquid assets to meet out any eventuality.
- As mentioned earlier staying with parents. It will ultimately flow to both the brothers down the line-ancestral property.
- My moot question to you is Whether from long term perspective I should invest in Equity MF- large cap or balances one ELSS ( as EEE).
- Already gone through most of the articles on your site and other blogs. The article " Best Debt Mutual " fund shared by you was released in Jan 16 based on calendar year 15 data. Two third of current calendar year is already gone by and lot of change in economic dynamics.
- Appreciate if you suggest the some specific 5 to 7 MF name ( as on date) , where I can invest for horizon of more than 10 years. Obviously I will be reviewing the investment periodically and what percentage I should invest in large cap,balanced. ELSS or Tax saving ?.I will be investing Rs 2 lacs per month in next three to four years.
- I am of the view to opt for 50 to 60% of investment in large cap equity fund for 2 to 3 years and than may shift to balanced growth in future to beat inflation. Indian economy is promising for next 3 to 4 years until and unless there is some political dispute with pak.
Hi,
For long-term goals you can defiently consider below set of mutual funds;
1 - ELSS , this falls under Exempt-Exempt-Exempt tax category, suitable for wealth accumulation & tax saving purposes.
My picks are : Franklin Tax shield or Axis Long Term Equity fund.
Kindly read :
http://www.relakhs.com/top-6-best-elss-tax-saving-mutual-funds-invest-2016/
2 - You can add one Balanced fund to your Portfolio. Personally I prefer investing in balanced funds to achieve my medium and long-term goals. I am a strong advocate of Balanced Funds.
My Picks : HDFC Balanced fund & TATA balanced fund.
Read:
http://www.relakhs.com/top-best-balanced-mutual-funds-returns/
3 -Large Cap funds like ICICI Prudential Focused or Birla Frontline Equity can be considered.
ELSS funds like Axis LTE though it is a tax saving fund, we can consider it as a typical Multi-cap or Diversified Equity fund too.
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Hello Srikanth, Awaiting for your response….