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How senior citizens can invest to beat inflation


I’ve a corpus of 1 crore.

Invested 15 lakh in SBI BALANCED FUNDS

10 lakh in MOD

1 lakh in Company bond

1.5 lakh per 12 months in SBIL pension bonds.

10 lakh in FD Plan

– Senior residents saving deposit 15 lacs

How do I make investments the remainder for development to beat inflation?

I’m drawing internet pension of 1 lakh, and lined by CGHS for 10 yrs.

– Identify withheld

Your plan to create a stable portfolio that may beat inflation all through the years is vital throughout the post-retirement stage. Your pension of 1 Lakh actually offers you a cushion at current, however over the interval its buying energy will get diminished because of inflation. Contemplating a 6% inflation, Rs1 Lakh to right now can be equal to 75,000 after 5 years and 55000 after 10 years. On the similar time, the post-retirement stage often is for 20 – 25 years, therefore your total portfolio should generate a better return than inflation. Primarily based on the knowledge shared in your question most of your funding is in debt devices and the one fairness allocation you will have at current is thru SBI Balanced Funds which has near 70% in fairness. Successfully at current, your funding has near 10-11% in equities and the remainder in debt.

Usually even within the post-retirement stage, it’s best to have an affordable fairness allocation as it’s the solely asset class that has the potential to persistently beat inflation in the long term. To your investments, it’s possible you’ll think about a mix of debt, conservative balanced and fairness the place fairness allocation will be within the vary of 25-30% relying in your wants. For those who plan to make use of part of your gathered corpus on your month-to-month wants alongside together with your pension in future which can be a risk contemplating inflation then it’s best to spend money on fairness from the prevailing corpus of 1 Crore.

For debt investments, you will have already invested in Senior Citizen Saving Scheme and you’ll think about investing in Company Bond Funds and Banking & PSU Debt funds. In hybrid or balanced funds, you’ll be able to spend money on Balanced Benefit or Dynamic Asset Allocation Funds as an alternative of Fairness oriented hybrid funds as these carry much less threat. For fairness allocation, you’ll be able to spend money on Index Fund, Massive Cap and Flexi Cap Funds.

– Reply by Harshad Chetanwala, founder MyWealthGrowth.com

(Have private finance queries? E mail mintmoney@livemint.com)

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