Ask Mint Money | Do not keep too many mutual fund schemes in your portfolio

Ask Mint Money | Do not keep too many mutual fund schemes in your portfolio

I am 48 years old. I live in my parental home (worth at least 3.5 crore in which I have an inheritance right) along with my wife, father and two daughters. I fall in the highest tax bracket and don’t have any other property. I have invested around 40 lakh in mutual funds (MFs) and 15 lakh in the equity market. I have a life cover of 90 lakh of which 65% is term insurance. I redeemed my Employees Provident Fund (EPF) when I left my job to become an entrepreneur and have 21 lakh (sum of my contribution, company contribution and interest) to invest. How should I reinvest this amount? I want to build a corpus to secure my old age which can also generate monthly income. Should I consider National Pension System or invest in debt monthly income plan (MIP) fund and invest the monthly earnings in Public Provident Fund?

—Jairaj B. Jatar

You can also add PPF to your kitty where you can contribute 70,000 per year. This will give you a tax-free return.

The life insurance cover you have mentioned is adequate. However, make sure your cover is actually a term cover and you are not paying a huge premium for the same. Also, equally important is health insurance. As you have turned into an entrepreneur, your employer’s insurance would have gone away. You should have a medical cover for the entire family.

Surya Bhatia is a certified financial planner and principal consultant, Asset Managers.

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