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. How do we plan and meet this expense? We have ₹3 lakh 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 streams of income to meet monthly expenses over your lifetime give you much leeway to manage your assets. Even if this income falls short of inflation by 3-4 per cent, you can still meet your goals.

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 60. However, you could still increase your allocation towards equity balanced funds by another 10 per cent.

Given the interest income from senior citizen scheme and partly from fixed deposits, you can meet 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 shortfall. So, a higher exposure to equity is suggested at least till you turn 70. Withdraw 4-5 per cent through systematic withdrawal plan every year to meet the shortfall.

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

The writer is a SEBI-registered investment advisor and founder,

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