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POSTED BY ON November 20, 2011 5:47 pm COMMENTS (9)
what could be a blue print of finance plan for a retiree,64 along with spouse 58, having following wealth, not any short of income, ready to sale /redeem as required for planning, middle class leaving in 2nd tier city (i mean, not metros)., ready to keep limit to rent of rented house
wealth— house– may fetch 25 lacs, bank balance with fd 1 lacs, mf diversified 4 lacs
health— good for self and spouse with no diabetes and hypertension , rs. 50000/- individual heaith insurance for both since more than 10 yrs, also members of son’s family floater of rs.350000/- in a bank’s group insurance.
no major obligation pending.
life expectancy 85 YRS for both/
be realistic and compromising on issue like health insurance .
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@ashal
thank you for your short but crystal clear thoughts!
Dear bharat shah, your understanding is right for the house sell & cheaper house purchase part. For reinvesting the 17-18L Rs. is an issue which should be seen keeping in mind the risk taking abilities of the couple.
thanks
Ashal
Dear Bharat, As the couple is living with their son’s family, the expense figure comes out around 5-6K for me for a tier 2 city as normal day to day living expenses should be with son’s income. At least I think so.
Is it possible to sell the house for 25L Rs. & shift to another location within the same city for a cheaper house ranging between 10-12L Rs. in this case the extra amount received can be put into bank Fds & other avenues.
Long Term renting is not a permanent solution, hence not advising to go for it.
@ 0.5% withdraw rate, from Mfs the mly amount available for consumption ‘ll be 2000 Rs.
Your take please.
Thanks
Ashal
@ashal
thank you .
as such, i estimated rs.10-12000 for only couple, and not with son’s family. i think, a smaller house may be available with rs.10-12 lac in the same city. what you are suggesting, as i understand, may be as follows:
monthly income from balance after house change (RS.1300000/-) @ 8.6%-Rs.9316/-
withdrawal @o.5%p.m. from Rs. 4 lac mf -Rs. 2000/-
that will provide for monthly expenses as of now. of course inflation is to be taken into account for future.
how instead, out of Rs,1700000, a part be invested in debt instruments for say, 7 yrs. for taking care of monthly expenses rs.10000/- increasing @ 6 % p.a. and balance in mf? then after 7 yrs. same way, from the mf corpus , similar a/m to be shifted to debt instruments for taking care of next 7yrs’ monthly expenses, and so on?
Dear Bharat Shah, as the houe in question is in the name of father, what’s the age of house? I mean if it’s less than 15Y old, it may eligible for reverse mortgage in case it;s more than 15Y old it can fetch RM.
Thanks
Ashal
@ashav
the house is 17 yrs old. otherwise also, as i think, rm may not be enough paying for the income stream/corpous need for the purpose.
@ashal
1.difficult to answer correctly , as now living with only son’s family in the 2bhk flat owned by retiree. however old couple living is simple with normal food and other normal living expenses as you could guess or even suggest!
2.now living with son’s family
3. may shift to rented house in same or other city
4. absolutely ‘no’
i understand it is very difficult to pull on with this wealth. however try possible for possible with limitations.
thank you.
Dear Bharat shah, please add some more info in the query,
1. what are the current mly expenses of the couple?
2. Living with son or alone?
3. In case decide to sell the house where ‘ll they shift for rest of life?
4. Are they getting any other income say pension?
Thanks
Ashal
@ashav
meantime i did some homework. as such, you may consider the the current mly expenses of the couple as rs.10000-12000 without the rent (AS LIVING IN OWN FLAT.)
THANK YOU.