Where should a 62 year old invest for monthly expenses?


ET Online|

Updated: Dec 07, 2018, 01.29 PM IST

NRI4
My mother, 62, sold a flat on her name and is now staying with me. She has about 40 lakh rupees to invest such that she should get about Rs 25,000 to 30,000 every month for her additional expenses. I am thinking of going for an SWP. What funds would you recommend given her needs and age? Also, other than SWP where else can she invest?
–Swapnil Bhandarkar

Jitendra Solanki, founder, JS Financial Advisors, responds:

You would require a post tax return of more than 8 per cent pa if you wish to generate this income, which is difficult from debt investments. And if I consider inflation then this corpus may be short of meeting your mother’s monthly requirement.

For SWP, ultra short term funds are the most viable option. Franklin Iindia Ultra Short Term and Aditya Birla Savings Funds are some of the funds you can look for. Other than this you can consider Senior Citizen’s Savings Scheme where current rate of Interest is 8.3%. This will earn you a fixed income for next 5 years post which you will have to reinvest in the scheme. In both these cases the earnings on the investments is taxable. Ideally a combination of SCSS and SWP would be good for generating a monthly income for your mother.

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