How should you allocate your retirement fund for old age?

He plans to keep his fixed deposit and savings balance on 25 lakhs each. Is it okay if he opts for SWP (Systematic Withdrawal Plan) of 6% from MF to maintain living expenses without wasting capital?

—Palani Ray

Although most of your financial assets are well-planned for a retirement portfolio, we would recommend a few changes. We recommend you to exit liquid funds as the FD and savings balance should be able to adequately cover the emergency provisions. He can consider investing in medium term debt funds with good credit quality.

Removing allocation from conservative hybrid funds has also been suggested, and investing in a combination of a short-term fund and an index fund instead of that component should help reduce portfolio costs. It has also been suggested to allocate the foreign share in the index offerings.

I have resigned from the government job after serving for a decade. I want to know is it a good idea to continue with my NPS account? If so, how much should I add to it every year to keep it active? If not, what would be the best investment for that money?

—Name withheld on request

We advise you to continue with your NPS account. Minimum contribution to NPS is 1,000 per financial year. You should evaluate your asset allocation and fund managers annually to see if it meets your risk tolerance and performance standards.

Vishal Dhawan is a certified financial planner and founder of SEBI registered investment advisory firm Plan Ahead Wealth Advisors.

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