I want to invest a lump sum of Rs 2 lakh. The money should generate a monthly income for me when I retire in 5 years with other benefits. I don’t want to invest in Ulips. Should I opt for mutual funds?
Jayant R. Pai CFP and Head of Marketing, PPFAS Mutual FUND
replies: Since you have a five year horizon, you could invest in an equity mutual fund now, redeem after five years and then transfer the accumulated corpus into a bank fixed deposit, Senior Citizens’ Savings Scheme or small savings schemes like Post Office Monthly Income Scheme or National Savings Certificate.

While no mutual fund guarantees safety of capital nor assures fixed return, the horizon you have in mind gives you a fair chance of earning a reasonable return. Invest in a index fund / ETF if you wish to keep it simple. Alternatively, you could opt for a multi-cap equity scheme as it contains a mix of both large and small sized companies.

I will take VRS in Sept 2021. I will receive Rs 10 lakh as compensation. I have Rs 8 lakh in my savings account and Rs 2 lakh as loans to relatives. I have MF investments worth Rs 30 lakh, Rs 2 lakh in bonds, Rs 13 lakh in deposits, Rs 4 lakh in stocks and Rs 2 lakh in NPS. My retiral benefits would add up to Rs 45 lakh. I earn Rs 15,000 in rent every month. How should I invest the money I will get?
Raj Khosla Founder and Managing Director, Mymoneymantra.com
replies: In your retirement, you can generate a monthly income by investing Rs 15 lakh in in the SCSS, Rs 4.5 lakh in Post Office Monthly Income Scheme and Rs 10 lakh in tax-free bonds.

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Your fund portfolio should be aligned towards safer debt options and facilitate a Systematic Withdrawal Plan. A MF portfolio of Rs 60 lakh should ideally be a mix of Franklin India Short Term Income Plan, ABSL Liquid Fund and SBI Magnum Ultra Short Duration Fund. Create an emergency corpus by parking Rs 5 lakh in a bank account or in liquid funds and Rs 20 lakh in FDs for senior citizens. Buy a joint health insurance for yourself and your wife. The rent and MF yields should give a monthly income of Rs 60,000.



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