Queries
V RAVICHANDRAN , Chennai
Bhudeb Bhattacharya , Nagaon , Assam
I want to invest `5,000 in Systematic Investment Plan ( SIP ) for 20 years for my daughter ’ s marriage . Please suggest the best mutual funds to invest in the long run . You could distribute `5,000 across diversified multi-cap equity funds like Franklin India Prima Plus , Aditya Birla Sun Life Advantage Fund and SBI Magnum Multicap Fund to grow your funds .
Deepali Sen CFP and Founder Partner ,
Srujan Financial Advisers LLP
I wish to purchase an annuity scheme with immediate payout to ensure a regular source of income . Please suggest the best immediate payout annuity schemes available . Can you also confirm if the annuity received can be treated as salary income for income tax purposes . Almost all insurance companies have immediate annuity schemes in their product portfolios . You have the option of buying joint or single life annuity , with or without purchase price .
Different options have different annuity rates , so you have to choose as per your requirement . There is no such thing as ‘ best ’ annuity schemes . Whichever scheme suits your requirement is the best .
You may check LIC Jeevan Akshay-VI and HDFC Life Guaranteed Pension Plan . Alternatively , you may try the post office schemes and schemes like the LIC Vaya Vandana Yojana , etc to supplement your monthly / annual income .
Since interest rates are expected to go up in a few years ’ time , getting into a lock-in option may not be wise at this point . You may get better annuity rates a few years from now when you can lock in your investments . Till then , you may use other short to medium-term products . For taxation purposes , annuity is considered as salary . That means it is taxable .
Manikaran Singal CFP and Registered Investment Advisor ( SEBI )
Good Moneying Financial Solutions
John D ’ Costa , Hyderabad
I am a 38-year-old self-employed professional living with my family of four , including parents and wife . We are expecting our first baby in June . My house is worth `2.25 crore . I have `10 lakh as fixed deposits and another `10 lakh in cash has been reserved for the baby . We ’ re expecting `50 lakh in cash from property sale , net of taxes . We own gold jewellery valued at `10 lakh while our rental income is `2 lakh per annum . None of my family members have insurance cover ( medical or life ). We do not have investments in EPS or PPF , neither are we servicing any loan . Please help me make a financial plan for the future . It is important to have clearly defined goals to plan your investments meaningfully . We also need to have a better understanding of your cash flows ( both inflow and outflow ). However , with the limited data available , I would like to suggest the following :
■ Buy a term plan of at least `2 crore for the next 25 years .
■ Keep aside at least `3-4 lakh as emergency funds in liquid or ultra short mutual funds like Franklin India Ultra Short Bond Fund-Growth and SBI Ultra Short Debt Fund-Growth .
■ Have a medical cover of at least `10 lakh for yourself and all your dependants .
■ Invest at least 40-50 per cent of your inflows . This will help to achieve your future goals ( short-term , medium-term and long-term ).
■ Money needed for short-term ( those emerging in the next two years ) goals can be invested in growth options of ultra short-term and short-term mutual funds like Franklin India Low Duration Fund , UTI Treasury Advantage Fund or HDFC Regular Savings Fund .
■ Goals in the medium-term ( two to seven years ) too would require money . Surpluses meant for mediumterm goals can be invested in growth option of income funds like Aditya Birla Sun Life Treasury Optimiser
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Outlook Money April 2018 www . outlookmoney . com