Mathumathy, single, aged 49, wants to return to India from the UAE in 11 years from now. She wanted to check if she can afford her retirement and other goals in her mind with the assets she owns and also considering her future income.

She listed her goals and the options she is exploring currently. She wanted a clear road-map for the next 11 years.

1. Since she is single, she checked the senior-care facilities in Chennai and Bengaluru. She understands the senior-care facilities with health support may cost her around ₹1.2 lakh per month with all the comforts she is looking forward to. If she opts to stay in an apartment which is senior friendly and single-woman friendly, it may cost around ₹80,000 per month for the living expenses. She wanted to check whether she can buy an apartment in Chennai or Bengaluru as part of her return to India plan.

2. She is covered for full health facilities while in employment and wanted to explore how she would manage her medical expenses after returning to India.

3. She has been investing in financial assets for the past 15 years and accumulated funds across asset classes. She wanted to check if the investments are performing well and any actions need to be taken.

Her investments are as follows and her employment is more stable in the country of her stay. She will be able to invest ₹30 lakh per year for the next 11 years comfortably.

Her risk-profile analysis reveals she is a more balanced investor and understands market and its volatile nature. She wants to be extra careful about her financial decisions from now. As her wealth grows, she was keen to avoid mistakes while managing her portfolio. 

Review, recommendations

* She was advised to opt for comprehensive health insurance with adequate sum insured, based on her lifestyle and income group.

* As she is single and does not have any immediate family member to inherit her property, she avoided investing in any real estate. There were couple of relatives who often ask her to buy an apartment in the same locality where they live. They may be her immediate support system, but she was not inclined to do that and wanted money-related discussions to be more professional rather than friendly. She has a rented apartment in Bengaluru for the past seven years and is quite comfortable with the locality.

* It was advised to opt for an apartment purchase after coming back to India in the location where she will be at that point of time. She needs to allocate ₹75 lakh at current cost towards this property purchase. It was also discussed how and to whom to pass the property through an optimal estate plan. This amount will be invested in a balanced portfolio to generate 9 per cent post-tax annualised return. As and when she decides to buy a property, she may fund it with the investment.

* She needs ₹3.5 crore if she plans to stay in a senior-care facility right from her retirement age till her expected life expectancy of 90 years. Her lifestyle inflation is assumed at 7 per cent per annum and she wanted to settle down for 8.5 per cent post-tax return from her retirement corpus after returning to India as she wanted to reduce the uncertainty associated with higher equity allocation. This amount should be sufficient to run her expenses if she chooses to live in senior care or in an apartment.

* She was asked to explore the opportunities to pursue her passion for researching about languages, dance forms and culture in different parts of India. She has already done some wonderful work on this. This will help her to lead a purposeful life after retirement.

* Though she is healthy, she may need adequate funds to support her for her health-related expenses. Her wealth will be divided into three parts with one for her health-related expenses and the other one as reserve fund for her to manage unplanned expenses and challenges after retirement. The last part will be utilised by her to support her social circle and will be gifted through will after her time. Her future income will be invested in the above three baskets and managed with maximum 60 per cent equity allocation. Whenever the equity allocation crosses 60 per cent, she will rebalance it to 50:50 allocation or 40:60 allocation to Equity:Debt in future after checking with the adviser.

The author is a SEBI-registered Investment Adviser and can be reached at www.financialplanners.co.in

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