Your Financial Plan

I am a retired banker. My husband is also retiring shortly. The rental and pension income is enough to meet our monthly expenses. We may require around ₹3 lakh every year for visiting our children, who are well-settled in life. How do we plan and meet this expense? We have ₹3lakh cash in hand. Is it a good time to invest in mutual funds? Should we have exposure to gold mutual fund? Given that interest rates are at the bottom now, please suggest an investment strategy.



Two regular stream of income to meet monthly expense till your life expectancy gives you much leeway to manage your assets. Even if the regular income falls short of the inflation by 3-4 per cent still you can live comfortably and meet your aspirations.

Your current allocation is skewed towards debt and equity accounts for 25 per cent of the assets. It is not bad since both of you are at 60. However, considering your current risk taking ability, you still increase your allocation towards the equity balanced fund by another 10 per cent.

So why should you increase the exposure in equity? Because, with your interest income from senior citizen scheme and partly from fixed deposits you can meet the vacation expenses and health insurance premium. But both are likely to increase over the years. When your deposits are due for renewal you may earn lower return. This may increase the short fall. So, I suggest you higher exposure to equity at least till you turn 70. From equity allocation through systematic withdrawal plan keep withdrawing 4 to 5 per cent of the investments every year to meet the short fall.

Regarding investments in mutual fund, if you feel market is at its high, invest in liquid fund and through systematic transfer invest weekly a sum of ₹12,500. With this strategy if market runs up fast you may miss the market rally however, if market corrects you earn better return.

(The writer is SEBI registered investment advisor and founder your queries to

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