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Retirement planning: Lower retirement goal, use equity funds

Irishu
Retirement planning: Lower retirement goal, use equity funds

Many investors do not know whether they are investing in the right funds and whether their fund portfolios are on the right track. The Portfolio Doctor assesses the health of the fund portfolio, reviews programs and compliance with objectives, and recommends corrective measures if necessary. The recommendations given are based on the performance of the funds, the investor’s risk profile and financial goals.

Ravinder Nath will retire in three years. Here’s what the doctor recommended to him.


PORTFOLIO CONTROL

  • He has been investing in equity funds for 10-12 years.
  • It pursues aggressive allocation. Almost 75% of the portfolio consists of stocks and equity funds.
  • We need to start investing in fixed income options. Invest in PPF to create a tax-free structure.
  • The portfolio is skewed towards small and mid-cap funds.
  • It also owns many international funds and ETFs.
  • The marriage goal is very close, so use some of the equity funds.
  • The transition to short-term debt funding continues to preserve capital.
  • It is not possible to achieve the retirement target of Rs.4 crore. It has been reduced to Rs.1.5 crore (Rs.60,000 per month).

Note from the doctor

  • Direct stock investments can be risky. Consider switching to mutual funds.
  • Use an arbitrage fund to create a tax-free structure for a vacation destination.
  • In NPS, opt for a conservative allocation of not more than 20% in equity funds.
  • Retirement is around the corner, so we need to reduce risk.
  • Start moving from equity funds to debt options in about 12 months.
  • Use systematic withdrawal plans to generate regular income when you retire.

WRITE TO US FOR HELP
If you would like your portfolio to be reviewed, write to [email protected] with the subject ¡¥Portfolio Doctor¡¦. Specify the following information:

  • Names of funds you own.
  • Current value of the investment.
  • If you have SIPs running on any of them.
  • Financial goals for which you are investing.
  • How much do you need for each financial goal?
  • How far is each target?