Home / Money / Q&a /  It is important to raise health insurance coverage during your retirement years

I want to save a total corpus of 40 lakh over the next 10 years. I can afford to invest 25,000 a month. Please suggest a few good schemes to invest in.

—Kshitij Pai

It’s good to plan for the future much in advance. Goal-based planning always helps in determining the right asset mix.

You need funds in 10 years for which you can invest 25,000 per month. The principal amount accumulated will be 30 lakh in 10 years and if you add the income earned (assuming 9%), you will be able to accumulate a corpus of 43.90 lakh. And at 10%, the corpus will become 51.60 lakh. This is assuming you don’t increase savings at all. Therefore, if you want to avoid additional risks to your investments, you need to start saving early.

I plan to retire shortly. After I retire, I will have a corpus of 3 crore to invest. I have my own home with no loans. I also have a floater medical insurance of 10 lakh outside my company medical cover. I don’t have any other obligations. I expect a monthly expense of 80,000 post-retirement. Please suggest how I should deploy my corpus to generate this income in a tax-efficient manner. Also let me know whether tax-saving bonds are a good option.


Let’s start with your insurance policies. Since you don’t have any obligations to provide for, there is no need for you to have any life insurance policy. However, what you need to have is your own health insurance policy. While you do have a health cover, it is important to increase the sum insured for protection against inflation in health costs.

With no liabilities, you need to concentrate on your accumulated corpus generating tax- and inflation-adjusted returns. Keep in mind that generating inflation-adjusted returns is not an easy task. In the initial years, it is doable, but over the years, it might be difficult to maintain. So you need to make sure that you add equity as an asset class to your portfolio to counter this. However, it does mean that you need to take a little higher risk. A moderate portfolio with 20-30% equity asset class can be considered.

You can consider a portfolio mix of debt and equity mutual funds. Equity can be added in the portfolio in a staggered manner through a systematic transfer plan (STP). Likewise, you can start getting a monthly income via a systematic withdrawal plan (SWP) from the debt schemes. This will not only ensure regular income but also better tax-efficiency.

Tax-saving bonds are a good option for investors who want to invest with a high degree of safety and are also in the higher tax bracket. While you do want a high degree of safety, after retirement, you will not fall into a high tax bracket and, hence, assets which generates lower returns while offering tax saving will not suit your profile. Alternatively, within the debt portfolio you can consider high-quality funds which not only provides safety but also better returns along with liquidity.

Surya Bhatia is managing partner of Asset Managers. Queries and views at

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