Mutual Funds

Your Financial Plan

Suresh Parthasarathy | Updated on January 17, 2018 Published on August 21, 2016


I work in a nationalised bank. I retire in a month. After retirement, as a former employee, I will get an extra 1 per cent interest and as a senior citizen an additional 0.25 per cent. I plan to travel once in six months. I have a health policy for ₹10 lakh. Please suggest investment plans that will fetch 9 per cent return.

BLN Swamy

Running an EMI, post retirement, is not desirable. Also, you have no life cover to protect the liability. With a narrow income-expense gap, meeting unexpected expenses is a challenge. Also, when interest rates are heading lower, it will be difficult to meet your needs entirely with bank deposits.

So, allocate 60:40 in debt and equity mutual fund. If you invest the entire equity portion in a balanced fund, your overall exposure to debt investments will be 74 per cent which can earn 10 per cent return.

If you invest ₹24 lakh in your bank and earn 8.25 per cent return, your interest income will be ₹1.98 lakh. Invest the balance ₹16 lakh in a balanced fund and withdraw 0.67 per cent monthly and it will account for ₹10,600. In some years, if the market delivers abnormal returns, move profits to a liquid fund and through systematic transfer plan move the money back to a balanced fund.

Including your pension, your total monthly income will be ₹53,000 against total expenses of ₹51,800. Once your loan is closed you will be left with surplus. Since you have home loan repayment and health insurance premium your taxable income will be lower than the marginal income slab. So, you will not have any tax liability on your income. Since you have not disclosed the home loan interest it is not clear whether commuting your pension is advantageous. If you commute pension and if the commutation benefits come close to the outstanding loan amount, close the loan. For the shortfall, utilise the retirement benefits.

The writer is a SEBI-registered investment advisor and founder,

Send your queries to

Published on August 21, 2016

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.