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I am 53 and my wife is 45. We have two sons who are still studying. At retirement, I may need ₹50,000 per month to meet expenses. I am eligible for employer-sponsored pension from an insurance company, but it will not be sufficient. My outstanding home loan is ₹60-lakh. For my son’s wedding, I will need about ₹20-lakh in five years. I am thinking of withdrawing a part of my EPF (Employee Provident Fund) to either repay the housing loan or to invest in mutual funds and bonds. Our family health cover is ₹8-lakh. Please suggest ways to plan my investments.
Soundar
You have a good EPF balance and are still contributing 20 per cent toward the same. At your age, it is one of the best debt investments since EPF declares an average interest rate of 8.5 per cent each year and is also tax-free. Withdrawing to invest in MF or bonds or to repay home loans is not recommended.
For a five-year period, not many bonds or other fixed-income instruments offer a post-tax return of 8.5 per cent with sovereign guarantee, such as the EPF. With your plot and existing house, you are already overweight on real estate. Buying an apartment at the end of your career is not normally recommended.
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