I am 53 and plan to retire at 55. My retirement benefits will amount to Rs 18 lakh.
My monthly expense is Rs 20,000. I own the house I live in. I own two more houses, which I have let out for Rs 20,000.
I have invested in 16 mutual fund schemes worth Rs 17 lakh. My monthly SIP commitments are to the tune of Rs 31,000.
I have invested Rs 18.5 lakh in two portfolio managed service (PMS) houses. I have fixed deposits worth Rs 7.5 lakh.
I own two plots worth Rs 80 lakh.
I need Rs 16 lakh for my daughter’s marriage in a few years. Based on my current expenses, is it possible for me to sustain till 75 years?
— S Nagaraj
Your portfolio appears very aggressive and is not suited for someone planning to retire in a couple of years. Since you have rental income to take care of your monthly needs in the initial years of retirement, reduce your equity exposure during any market rallies.
At 55 your monthly needs will be Rs 24,500. If inflation continues to be at 7 per cent levels, at 75 your requirement would be Rs 95,000.
If your investment in PMS delivers 15 per cent and MF lump sum and SIP gives 12 per cent, at 55 your corpus will be Rs 53.9 lakh.
The maturity proceeds of FD, RD and insurance along with retirement benefits will be Rs 41.7 lakh. If you withdraw Rs 16 lakh for your daughter’s marriage, you will be left with Rs 79.8 lakh. Keep Rs 4 lakh in deposits for emergency and invest the rest in a combination of debt and equity.
Deploy Rs 45 lakh in debt instruments that yield post tax return of 7 per cent, to support your monthly needs from 56.
The balance Rs 30 lakh can be invested in MFs till you turn 64. If you are able to achieve 10 per cent returns, the corpus will be Rs 77.8 lakh.
You have adequate medical cover.
Investments
Hold a few large-cap schemes such as Franklin India Bluechip and ICICI Focused Bluechip and in the multi-cap space retain Reliance Equity Opportunities. Continue SIPs in IDFC Premier Equity. Sell all the other schemes during any market rally.
Discontinue SIPs in sector funds.
I am 59 and my net salary is Rs 85,000. I plan to work till 70. My wife is 51.
I have taken an endowment policy for Rs 1 lakh which matures in 2017. I have taken a family medical floater policy for Rs 3 lakh.
My investment in portfolio managed service (PMS) is Rs 10 lakh which is currently down by Rs 500.
I own real estate worth Rs 10 crore.
Do I need to take term insurance till I turn 70?
Are my savings sufficient till I turn 80? My monthly expenses are Rs 35,000.
— Jagadish Kumar
Cut losses and exit PMS investment.
With your current surplus start an RD for 10 years. This will take care of your needs for the rest of your life.
Term insurance is not required at this age .
Take a health cover for Rs 5 lakh.