I am due to attain superannuation before this year end. I will receive ₹40 lakh from various sources. Kindly suggest as to how I should invest this across various savings avenues. My employment will continue and I will be receiving remuneration even after superannuation. I hold investments in equity (direct as well as through the MF route), and various debt instruments such as bank/company FDs, post office, MF debt funds. I was late to start investments in PPF (I started only five years ago) and contributed the maximum allowed amount for five years. Since last year, I have been contributing only the minimum amount needed to keep the account alive, keeping in mind the illiquidity for the next 10 years. My children are well-employed and almost ready for marriage. I am willing to take risks in investing up to the advisable limit for my age. My wife also falls in the highest tax bracket.

Chandra Shekhar

How you invest your superannuation proceeds among different options will depend on what you are looking for from the lump sum, and your risk appetite.

If you seek regular income to supplement your earnings, you can invest ₹15 lakh in the post office Senior Citizens Savings Scheme (SCSS). The 8.6 per cent return on SCSS (taxable) is one of the best interest rates you can look to earn on an absolutely safe investment today.

Beyond this, if you are risk-averse, you can invest ₹15 lakh across three debt mutual funds that invest in high-quality bonds. Axis Banking & PSU Debt, ICICI Prudential Short Term Income and HDFC Corporate Bond are good options. Investing in the growth options of these funds can fetch you tax-efficient returns, as capital gains after a three-year holding period are subject to indexation benefits.

The remaining sum of ₹10 lakh can be invested in equity funds so that your post-retirement corpus continues to grow with inflation. HDFC Equity and Mirae Asset Emerging Bluechip are two funds you can consider. PPF is a good fixed-income option but is not a good post-retirement instrument if liquidity is a priority.

If you do not seek regular income and are mainly looking to grow this lump sum of ₹40 lakh, you can consider investing about 60 per cent of it in the debt mutual funds recommended above and the remaining 40 per cent in the equity mutual funds mentioned above.

In order to make sure that a wrong entry point into equity funds does not impact your returns too much, it would be good to park your lump sum in a liquid fund and start systematic transfer plans into your chosen equity funds, with equal instalments spread out over the next six months.

We recommend a 60-40 debt-equity mix given your age profile.

Send your queries to mf@thehindu.co.in

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