I received Rs 70 lakh after retirement. Where should I invest this amount for good return? (2024)

I retired in May 2023. I own a house and have no loans. With my superannuation corpus, I have made Rs 4.9 crore worth of investments as follows: Rs 1 crore in the NPS, Rs 2 crore in fixed deposits, Rs 30 lakh each in SCSS (mine and wife’s name), Rs 80 lakh in mutual funds and stocks, and Rs 50 lakh in the PPF (mine and wife’s name). I also have two rental properties generating Rs 40,000 per month. In future, I will need Rs 60 lakh for my children’s weddings. With monthly expenses of Rs 50,000, is my corpus sufficient to sustain me in retirement? Please suggest investment options for FDs after these mature in December 2024.

Rushabh Desai, Founder, Rupee With Rushabh Investment Services:

Your investments are appropriately skewed towards fixed income for your age and well diversified across fixed income, real estate and equity, with decent monthly rental income. With 16% in pure equity, you could increase this by 5-15%, depending on your risk tolerance, to achieve inflation-beating returns. For your children’s weddings, withdraw `60 lakh from your FDs maturing in December 2024. Assuming a life expectancy of 85 years and monthly expenses of `50,000, increasing by 7% annually, your investments worth `4.3 crore (minus the wedding expense), plus rental income, should comfortably sustain your retirement. When your FDs mature, invest a portion of the surplus in balanced advantage/dynamic asset allocation hybrid mutual funds, and a portion in high-quality corporate bond mutual funds, based on your risk appetite. Hybrid funds offer equity exposure with lower volatility compared to pure equity. Avoid overinvesting in equity at this stage. Rental yields for residential properties in India are low compared to fixed income yields, and managing properties can be a hassle. If you can manage them well, continue holding them. However, if you don’t plan to use or pass on these properties, consolidating them could be a better option.

I received a sum of Rs 70 lakh after retirement. However, I do not know where to invest this amount. I have adequate health insurance. Please advise on how to utilise this amount so that my money remains safe and provides good returns.

Dev Ashish, Founder, StableInvestor, and Sebi-registered investment adviser:

In the post-retirement phase, you need to manage your portfolio’s asset allocation while focusing on capital preservation, income generation and inflation-beating growth. Here are a few specific strategies to help you keep your money safe while providing good returns. If you primarily need income, consider parking a portion of the corpus in Senior Citizens’ Savings Scheme (SCSS) and RBI floating rate saving bonds (FRSB). So if you invest Rs 30 lakh in the SCSS at 8.2%, it will generate Rs 2.46 lakh as annual interest income via quarterly payouts. If this isn’t sufficient, additional funds can be invested in the SCSS in your spouse’s account. If SCSS isn’t an option for your spouse, you can go for RBI FRSBs, though their current rate of 8.05% may reduce when the interest rate cycle turns down. Bank fixed deposits, offering around 7.5%, can also be considered for additional interest income. From your corpus of Rs 70 lakh, the portion that you allocate to interest-bearing instruments will depend on your monthly income requirement. For example, if Rs 30 lakh is invested in SCSS, and Rs 10 lakh each in RBI FRSBs and bank FDs, you can earn a monthly interest income of about Rs 33,000. The FD portfolio can also serve as an emergency/medical contingency fund and an ongoing liquidity reserve. While renewing it, divide the FDs into smaller amounts to avoid breaking a large FD for small needs. Invest the remaining Rs 30 lakh in equity to generate inflation-beating returns, if your risk appetite allows. Diversify into 2-3 schemes: 30% in largecap index funds, 30% in flexi-cap funds, and 40% in aggressive hybrid funds. Stagger the investment over the next year to average out your entry in equity. Investing in equity funds requires a commitment of at least 5-7 years to achieve decent returns. You should also ensure that you have health insurance of at least Rs 15 lakh. If your current coverage is less, enhance it with super top-up plans to protect against high-impact, lowprobability medical bills.

I am a 71-year-old senior citizen with no financial obligations. My assets include a bank fixed deposit of Rs 1 crore, shares valued at Rs 73 lakh, and mutual funds worth Rs 45 lakh. I also own a residential flat valued at approximately Rs 2 crore. My monthly expenses amount to around Rs 25,000, while my gross income from pension is Rs 70,000 a month. Please advise if adjustments to my investments are necessary to ensure both income generation and safety of my capital.

Prableen Bajpai, Founder, FinFix Research and Analytics:

An individual’s equity exposure, as per rule of thumb, should be ‘100 minus age’, which places your age-guided equity exposure at 30%. Over time, this percentage decreases to reduce portfolio volatility and risk. However, other factors like net worth, monthly pension, liabilities, sources of income, investment horizon, financial goals, and risk tolerance also influence this decision. Your monthly expenses are well within your pension, which means you don’t have to rely on your financial assets for monthly expenses, giving you more flexibility. Your assets are split between fixed income and equities in a 46:54 ratio. Assuming no other financial goals, maintaining your current equity proportion is reasonable. If your equity portfolio is spread out too much, streamline it for easier management. Ensure that nominee names and all other details are updated. Of the Rs 1 crore in fixed deposits, keep Rs 30-40 lakh readily available for medical emergencies or other needs. Invest the remaining in debt funds to reduce annual tax liability while ensuring capital safety. A combination of target maturity funds (investing in government securities and state development loans) and active debt funds can work well. If you are comfortable with higher risk and your existing mutual fund portfolio doesn’t include hybrid schemes, consider allocating up to 20% from the fixed income basket to hybrid funds.

I am 27 years old, earning Rs 4 lakh per month, before taxes. Currently, I have Rs 30 lakh in FDs, and my monthly expenses are Rs 1 lakh. With no liabilities, I’m considering reallocating some of my FD funds to other instruments to secure my long-term future. Could you suggest suitable investments for me?

Vidya Bala, Co-Founder, PrimeInvestor.in

: If your FDs are earning 7% or more, you don’t need to reallocate them. Instead, start fresh monthly SIP investments in simple equity funds. Allocate 30% of your portfolio to Nifty 50-based passive equity funds (equity index funds), 25% to Nifty 500-based index funds, and 15% to Midcap 150 index funds. The remaining 30% can go to short-duration and corporate bond debt funds. If you’re unhappy with your FDs, move half of these to debt funds. If not, investing in FDs is a good diversification strategy. Ensure your equity investments are made through SIPs. Don’t worry about market fluctuations and have a minimum seven-year time frame for these investments.

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