I am single and will retire later this year and I live in a joint family. I will have Rs 2 crore as my retirement corpus of which I may need Rs 50,000 every month as expenses. What can I do with the Rs 2 crore?
Sumit Upadhyaya, Gurugram
It is encouraging to note that you have built a sizeable retirement corpus and are confident that your extended family will take care of you in your old age. You should still be careful in managing this corpus. Once you retire you will be solely dependent on the income generated from your investments for your routine expenses, which you anticipate to be Rs 50,000 a month. Corpus of Rs 2 crore is a good foundation, but the future is uncertain, so consider deploying the funds into investments for growth and counter inflation. Such an approach will help you secure your future financial needs and could be used by other family members if needed.
There are mutual funds available that you could consider based on your comfort with risk and liquidity. A large part of your savings, say Rs 1 crore could be also invested in balanced funds in a systematic manner so that it has the potential to grow to counter inflation and your longevity. It is common for people to live well into their 80s and even 90s, which means you could be living off the corpus that you have for another 20 years or more. To manage the investment risk, you should invest in debt funds that are less volatile and oriented towards capital protection, though they do not guarantee it. Alternately, you could also consider keeping some money in a liquid fund and a bank to address any emergencies.
As you are single, it will be prudent that you do your estate planning, which is nothing but putting in place a clear succession plan and how your assets will be managed after your demise. This process can be initiated by preparing a Will and ensuring adequate nominations for all investments. Most importantly, do take adequate health insurance, as rising healthcare costs can be very damaging to your finances if you need medical attention in retirement.
