I am 57 years old and will retire in a year’s time. I have 5 lakh per annum cover for my wife, daughter and self. I want to save some capital to be passed on to our daughter on our demise. I have shares worth 2.60 crore and have monthly income plans of Reliance and HDFC ( 90 lakh each), DSP Balanced Equity, Reliance Vision and HDFC Top 200 ( 7 lakh each). I have invested in HDFC Pension Balanced Equity for 30 lakh. I have investments worth 4 crore and 15 lakh in cash. After retirement, I expect to get around 2.50 crore after tax. A flat that I intend to sell on retirement may fetch 1 crore after tax. Total value of funds will be 7.5 crore. My major expenses in two years would be 25 lakh on my daughter. My current annual expenses are 14 lakh. Keeping in mind my expenses, inflation and unforeseen medical expenses, suggest if my portfolio is okay.

-Percy Karanjia

You have created a good corpus for your family. Now that you are close to your retirement, you need to change gears and conserve your capital, while reasonably accelerating growth.

Your existing equity exposure is 75%. Next year when you retire there will be an additional inflow of 3.50 crore and total equity will come down to 41%, wherein contribution from direct stocks stand at 34% (assuming the addition is not equity). Normally, we recommend equity exposure to come down with age. However, this may not hold true in your case since your needs are limited and your corpus can be considered for the long term.

However, you can consider reducing your exposure to direct stocks and increase the same in equity-based mutual funds. This also depends on how actively you are managing your stocks portfolio. The funds you have chosen are good so you can increase exposure in the same. Also, consider equity-oriented funds having some exposure in debt. Some good funds in this space are HDFC Prudence, Birla Sun Life 95 Fund and Reliance Regular Savings Balanced Fund. You can also look at dynamic funds, where the objective is to shift between equity and debt based on predefined parameters.

In the pure debt space, options such as fixed maturity plans, short-term debt and dynamic debt can be considered, in which returns are consistent with interest rate movement. These are safe assets to hold even over the long term and are as good as the liquid category after the initial period. You should stay away from investments with higher lock-in. The bank account you maintain can be converted into a fixed deposit (FD)-linked account, which means whenever there is a surplus above a particular base amount, the surplus gets transferred to an FD which can be accessed like a savings account.

It is recommended that you increase health insurance for yourself and your spouse. There are plans that give cover for entire life with high sums insured.

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