Financial Planning: Malhar Majumder

I retired about 20 months ago. I am married and have a daughter. My pension (approximately Rs 30,000) is sufficient to cover my family's monthly expenses. I received Rs 26 lakh from my employer as retirement benefit. Of this, I invested Rs 15 lakh in Senior Citizens Savings Scheme (SCSS) of the post office and Rs 9 lakh in five mutual funds - equity option. From my previous savings, I have invested Rs 8 lakh in fixed deposits (FDs), considering the high rate of return being offered. I have also put aside Rs 2 lakh in savings account as an emergency fund, which came handy recently when I underwent surgery. I have invested separately in equities for funding my daughter’s marriage. Is my investment strategy optimum? If not, how should I tweak it?
You have created a nice balance of 74 per cent debt and 26 per cent equity as the table shows. However, there are a couple of concerns in your allocation, which need to be highlighted.

1. The interest accrued from your debt investments (around Rs 2 lakh annually) plus your pension (Rs 3.6 lakh per annum) is taxable.

2. You stated that your monthly pension of Rs 30,000 takes care of your household expenses. Then, how do you utilise your SCSS interest, paid quarterly.

3. Since you have invested in fixed return debt instruments - the same won't be beneficial once the interest rates start correcting.

Hence, I would recommend you shift the FD amount of Rs 9 lakh to an MF, investing only in government securities.This will reduce your tax liability and give you decent returns. It may even appreciate when the interest rate corrects.

Regarding the investments made for your daughter - if you anticipate that the marriage is within the next couple of years, start liquidating the equity investments (earmarked for her marriage) slowly and move the funds to fixed income instruments and partly into gold-linked assets.

The writer is director, Gliese Consulting. Views expressed are his own. Send your queries to yourmoney@bsmail.in