Your Financial Plan



I work in a bank and am retiring in May 2017. My wife is a pensioner. My younger daughter will get married this year. My medical expense is ₹20,000 per month. Can I continue my SIP and is it possible to live comfortably till our life expectancy?

R N Acharya

Although you are liberal with your monthly expenses, you can still meet them during your lifetime. Hold on to your equity investments for the long term and withdraw through systematic withdrawal plan.

Assuming that your monthly expense increases at 7 per cent annually due to inflation, when you turn 70, it will be ₹2.2 lakh and at 80, it will be ₹4.37 lakh. It will be a challenge to meet your monthly needs with the rental income and the returns from the fixed deposits. Retain your equity assets and use them to meet the shortfall in the monthly expense. Withdraw 3 per cent per annum from it. If the portfolio earns 11 per cent return, at the age of 85, your equity portfolio will be worth ₹6.1 crore. If market delivers abnormal returns, book profits and rebalance the portfolio.

If your spouse is not good at managing the equity assets, after 10 years, move a chunk of the equity assets to debt. Since I am suggesting you withdraw from equity, you can stop your SIP after retirement. This will reduce your monthly needs. Write a Will for all the assets, for easy transmission.

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

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