Please ask your questions HERE and rediffGURU Purshotam Lal, a chartered financial analyst and founder of Finphoenix Services LLP, will answer them.
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Sandeep: I am 60 with saving in mutual funds around 80 lakh. i want to withdraw 1 lakh per month as my pension. will there be any capital gain?
If you withdraw Rs 1 lakh per month from MF scheme even delivering linear return of 8% annually (which is not possible at all as returns on MFs are market linked and fluctuate), your savings in mutual funds may exhaust in around 10 years. In equity oriented MFs (65% or more equity), investments withdrawn on FIFO basis are taxable as short term capital gain (Taxed at 20%) for < 1 Year and Long term capital gain (Taxed at 12.5% flat, if LTCG exceed Rs 125000 in a year) for > 1 year investments.
Short Term Capital Gains on Debt funds < 24 months are taxed at applicable slab rates and > 24 months LTCG at 12.50%.
Anonymous: I have superannuated & now expecting an amount of 1.5 Cr from PF account. What should be the percentage of investment in guaranteed income and in market based instruments. Let me know how to invest in secured manner taking moderate risk. I have no liabilities. My children are well settled.
As a thumb rule for persons with age of 60 years, market based equity investments should not be more than 35-40% of the portfolio. It is suggested to firstly keep one contingency fund in banks or liquid mutual fund equivalent to six months of your average house hold expenses. Some funds for medical emergencies as well.
In moderate risk and equity hybrid MFs you may start investing through SIPs. You may consult a good certified investment advisor for your risk profiling and suggested portfolio construction in terms of your further life goals.
Anonymous: Is PPF better than MFs for steady, inflation-proof income for a retired person?
PPF or Public Provident Fund is a Govt Backed scheme and offers tax benefits on investment made up to a limit, interest earned is tax free and also the maturity is tax free. Currently it is offering 7.1% annually. PPF offers assured rate of interest and steady income, whereas returns from MF investments are market linked based on asset allocation chosen by investors.
Long term investments with periods of 5-10 years in good equity and / or equity hybrid funds may offer inflation proof income and suits more to investors with much higher risk profile.
Rajdip: Hello Sir. I have applied for Term Insurance to HDFC Life (Click to protect Supreme) and medical checkup for that has been completed. Now after evaluating my occupation which is construction of thermal power plants and where I need to work on heights, the company is not willing to grant me the option of Waiver of Premium on Critical Illness.
Without this option they will give me the Term Policy which I have made for 30 years. I requested them to charge me any additional premium but grant the WOP on CI rider. But they will not.
Should I check any other company or take the policy from them without the rider. Other rider of WOP on Disability has been approved. I'm 35 years old salaried with no smoking or medical history.
It is up to the insurance company to approve any rider or not because all proposals are subject to underwriting/evaluated by their underwriters. Premiums may differ (but not much) from one company to the other with whom you can check for this rider also or else you take this term insurance.
Anuradha: I am 60 years old. I want to invest my 20 lakh in equity shares or mutual fund for good return. I have invested 15 lakh in SCSS and 10 lakh in FD. Please suggest where to invest my 20 lakh to get good returns.
As a thumb rule at age 60, one should not invest more than 35-40% of their portfolio in equity/equity MFs and that also for a long term investment horizon of 8-10 years. You may contact any certified investment advisor for the same. Multi asset allocation fund, balance advantage fund or conservative hybrid MF may be explored for investment.
Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.
