Q. I plan to retire next year at 57 years. I will have a corpus of ₹3 crore, which is presently in equity ₹1 crore, and debt ₹2 crore. I have my own home with no loans. I also have a floater medical insurance of ₹10 lakh outside my company medical cover. I expect a monthly expense of ₹80,000, post retirement. Please suggest how I should deploy my corpus to generate this income in a tax-efficient manner. Please also consider whether tax saving bonds, which presently is giving a return of 6.60% (secondary market — NSE), is a good option.

Sudheesh menon

A. You will be able to comfortably generate ₹80,000 a month if your debt corpus of ₹2 crore delivers at least 6%. However, as you rightly said, it is important for you to generate this in a tax-efficient manner. Having a combination of post office senior citizen deposits, LIC pension scheme for senior citizens (both when you turn 60) and low risk debt funds and bonds can help generate some regular income.

Our suggestion would be that you allow your equity to grow, preferably using diversified equity funds and then move it to lower risk options when your debt corpus depletes. Of your debt corpus, consider 20-30% in low risk, short-term debt funds and use a systematic withdrawal plan (SWPs) to generate monthly income.

An SWP will allow you to fix the amount you want to withdraw every month irrespective of how the fund is returning.

SWPs are a tax-efficient way to generate monthly income. You can consider tax-saving bonds provided you are able to buy them at a good price.

(The author is a financial planning adviser)

Combination of post office deposits\, LIC pension scheme\, low risk debt funds and bonds can generate regular income post-retirement

Combination of post office deposits, LIC pension scheme, low risk debt funds and bonds can generate regular income post-retirement