How to plan my finances even though I have enough for my living

Your financial situation looks very good as you have a decent pension earning, a retirement corpus and above all a post retirement occupation giving you a moderate income.

Your husband is still working therefore probably you do not have to contribute to monthly household expenses. In a situation like this, you have lot of investible surpluses and your idea should be to maximise returns on these by deploying funds in mutual funds. We are suggesting mutual funds as so far you have invested only in fixed income instruments or traditional saving products.

There are many kind of mutual funds suiting your different investment goals. For example - you can invest the surplus cash lying in your bank account in liquid funds and earn around 7-7.50% compared to 4% received from savings bank account.

If you can take moderate risk and invest for 3-4 years, balanced funds could be a good choice. You can expect around 12-14% annual return from balanced funds in the long run. If you can take even more risk in order to get even higher return then investing in equity funds will make more sense. However for investing in equity funds, 5 years investment horizon is must.

Tax saving - Since your total income is taxable (pension + current monthly earnings of Rs 25,000), you can invest upto Rs 150,000 in ELSS Mutual Funds and save taxes under section 80C of the Income Tax Act 1961.

In a nutshell, there is perfect solution for all your investment needs in mutual funds. But our suggestion is that you should first assess your risk tolerance, define the goals of your each investments and the time horizon. Once you are clear on this that you can plan your mutual fund investments.

Please write back to us with further details, if you need our assistance for investing in mutual funds.

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