I have Rs 90 lakh, which I have ear-marked towards my retirement in 2019 March. How can I use this sum to create a monthly income stream?
Gurunath Achary, Chennai
You could use several ways to create a monthly income stream from this sum. You still have over 20 months to work towards that objective. However, you need to answer a few more questions before the choice of instrument for the purpose of monthly income could be worked out. For instance, will this be your only income stream in retirement? Are you looking at capital protection for this savings? Are you looking for a fixed and guaranteed payout each month? Based on these answers and a combination of them, the choice of products could vary from a monthly income plan (MIP) from a mutual fund, an annuity or post office monthly income scheme. MIPs neither guarantee capital protection nor a fixed payout each month. Annuity guarantees a fixed payout and there are variants of fixed tenure payout or perpetual payout, capital protection or reduction and more. In case of MIS from post office, the payout is fixed unless rates are revised and the capital is guaranteed. You may also consider keeping the money in a bouquet of mutual funds for growth and at the same time create a systematic withdrawal plan (SWP) to receive monthly payments.
