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OLM Desk - 28 February 2021

Zyed Khan, Mumbai, zyedkhan11@gmail.com

I am 40, and the sole earning member of my family with a monthly income of Rs 2 lakh. Please recommend a few investment options with a mix of equity, debt, and fixed income. My estimated withdrawals are for the following:  2028 - Rs 30 lakh for my elder daughter’s graduation   2031 - Rs 60 lakh for elder daughter’s post-graduation  2030 - Rs 1 crore for buying a home  2035- Rs 60 lakh for my younger daughter’s graduation  2038 - Rs 1 crore for my younger daughter’s post-graduation  2036 - Rs 50 lakh for my elder daughter’s wedding  2044 - Rs 70 lakh for my younger daughter’s wedding   Retirement- Rs 1.5 crore for non-provident fund, and Rs 2 crore for provident fund

For your first requirement, you will have to invest Rs 25,000 in a Systematic Investment Plan (SIP) every month. Expect a return of 8-9 per cent for an investment of 8 years, with a 7 per cent inflation. Here the amount - Rs 30 lakh required - is assumed to be in future value.

For the second requirement, you will have to invest Rs 22,750 in SIP every month for 11 years, with an expected return of 12 per cent, at an inflation of 7 per cent.

For the fourth requirement, invest Rs 13,000 in SIP every month for 11 years, with an expected return of 12 per cent and inflation of 7 per cent.

The remaining goals can be calculated similarly. One needs to consider many aspects while investing - like having an asset allocation, based on the number of years required to achieve the goals. A yearly review is vital, as depending on the annual review, some funds might require changes.

Here we have considered 7 per cent education inflation.

Debt funds and a mix of equity, hybrid funds could be chosen for a 5-8 year, with an expected return of 8-9 per cent. And for over 10 years, diversified and aggressive allocation funds could be chosen.

For better clarification and customised planning, please contact a financial planner.

HINA SHAH, Certified Financial PlannerCM, LUHEM Financial Planner, and Coach


Sweta Gautam, Bangalore swetagautam@gmail.com

I have a five-year-old LIC policy that will give me around Rs 30-35 lakh when I retire after 12 years. A portion of this will be invested in annuity by LIC, giving me a steady income. I pay a premium of Rs 18,000 per month. Do I continue paying or withdraw it and invest in an SIP that promises higher returns?

The above information is not enough to guide for retirement planning. The following information is required:

  • Current age
  • Current monthly expenses
  • Number of dependents  
  • Risk tolerance/appetite

A few things must be kept in mind before surrendering a policy.

Firstly, an annuity plan is taxable. Secondly, is the annuity enough to take care of the future expenses? Thirdly, how long have you been paying the premium? And, lastly, check whether you can withdraw the full amount.

It is always wise to divide all the eggs into different baskets, so it is advisable to start with an SIP. Investing in a mutual fund for the long term (more than 10 years) has given good returns. First, you need to calculate your expenses after 12 years and corpus for the same. An SIP with an investment of Rs 18,000 per month could yield a return of Rs 60 lakh approximately with a 12 to 13 per cent return, considering investing in a balanced large-cap fund. It is advisable to get in touch with a certified financial planner for proper guidance.

HINA SHAH, Certified Financial PlannerCM, LUHEM Financial Planner, and Coach

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