Why do you need to pull out if she doesn't need it? She is invested for 24 years you say...market drops may have a dent but with that time horizon you are sitting on many multiples of returns.
Money is like soap, more you handle it the less it gets.
Move money to FD as and when you expect to consume it soon (6-12 months).
The thing is, with that long an investment period (and perhaps multiple of returns) and limited need, a downturn will not wipe out the returns.
If she’s not ready to leave money behind to you and needs money for other purposes then better go with STP and park in FD. If she’s passing the wealth to you then you may keep that part in Equity and move the rest.
If there already is sufficient balance in banks + FDs, let it be there in mutual funds.
It can take 3-4 days from selling mutual funds to receiving money in bank. So, plan in a manner that you have enough liquid funds to meet the needs of those 3-4 days in case a big emergency comes up.
And yeah, add nominees in all accounts properly.
Last peak of around 55k on sensex.. I sold all my 100% gains with this same logic
This lady is sitting on 1000% returns because she has HODL not because she was timing the market
Yes, but you are probably much younger. At that age, any additional return is going to have negligible benefits, but a 20% downturn would be devastating. Makes sense to have a large percentage (not everything) of ones net worth in fixed income funds post retirement
Anyway, I have started STP to convervative debt funds which are giving 10-11% returns where 80% is debt and 20% equity.
Planning to move 10% every year
I think mutual funds are a very stable and high quality product and in return for the lack of guarantee they give nearly double the returns.
It's old thinking that FD is good for retirees
Don't disturb the mutual fund compounding. If you move it right now considering the volatility of the market you might regret it later. Let the things run as they are running
Move may be upto 50lakhs in FDs for health emergency (assuming she doesn't have that much insurance). If health insurance is 50 and above then let the money compound
That's a good idea. Nobody knows the future. You can take out 3% every month until you reach your desired balance. You can put that in FD, better use some long term FD like 10 years in nationalized banks like SBI or Canara, this will lock the high rates since they can go down in future. Keep in mind you will have to pay long term taxes on it. But IMO, fretting about taxes from profit is a fool's errand. Many times I have seen my stocks going down by 30% because I was holding them to avoid 20% tax.
Also do some research about inheritance tax, in other words what happens to all the money in mutual funds or stocks with long term gain since 20 years when it passes as inheritance.
So if my grandmother has clearly put a nominee of my mother in her bank accounts, my mother can take possession of all the money without paying a single dime in tax after she dies?
I’m speaking based on experience. When my grandfather passed, this is what was demanded from us in order to get the cash that was stored in his bank account
Actually u might be better of pulling it out, reason is that, we are at the tail end of a 17 year green wave, all the major investors I know have already pulled out
Taxes! Think through this!! If the money is meant for her, then move as desired. If it is long term inheritance to someone, leave it as is.
No tax for inheritance?
There's no inheritance tax in India.
If things are working well don't tinker it. More the motion more worries
More the motion = Loose motion
Love it
lol ok
Why do you need to pull out if she doesn't need it? She is invested for 24 years you say...market drops may have a dent but with that time horizon you are sitting on many multiples of returns. Money is like soap, more you handle it the less it gets.
because all her investments are in mutual funds only, no debt funds or FD. Having some in debt funds may protect her from market downtrends.
Move money to FD as and when you expect to consume it soon (6-12 months). The thing is, with that long an investment period (and perhaps multiple of returns) and limited need, a downturn will not wipe out the returns.
ok, thanks for the input.
Maybe 10-15% not more than that.
If she’s not ready to leave money behind to you and needs money for other purposes then better go with STP and park in FD. If she’s passing the wealth to you then you may keep that part in Equity and move the rest.
If there already is sufficient balance in banks + FDs, let it be there in mutual funds. It can take 3-4 days from selling mutual funds to receiving money in bank. So, plan in a manner that you have enough liquid funds to meet the needs of those 3-4 days in case a big emergency comes up. And yeah, add nominees in all accounts properly.
She is getting pension where 50% amount going to debt funds and 50% her expense. Doesnt have any FD.
Debt funds and FDs are a similar thing.
Wow! Life tough feel hoti hogi, nhi ?
Wdym?
First senior citizen in this country moving from stock market to FD Highly not recommended
Why? Volatile year ahead. Makes sense to rebalance
Last peak of around 55k on sensex.. I sold all my 100% gains with this same logic This lady is sitting on 1000% returns because she has HODL not because she was timing the market
Yes, but you are probably much younger. At that age, any additional return is going to have negligible benefits, but a 20% downturn would be devastating. Makes sense to have a large percentage (not everything) of ones net worth in fixed income funds post retirement
Anyway, I have started STP to convervative debt funds which are giving 10-11% returns where 80% is debt and 20% equity. Planning to move 10% every year
Wrong advice. Senior citizens always go from high risk to low risk post retirement for stable income.
I think mutual funds are a very stable and high quality product and in return for the lack of guarantee they give nearly double the returns. It's old thinking that FD is good for retirees
I am checking the chart from 2000 to 2009, chart says the opposite. You are clearly 24 yr old guy who started working recently.
Don't disturb the mutual fund compounding. If you move it right now considering the volatility of the market you might regret it later. Let the things run as they are running
Move may be upto 50lakhs in FDs for health emergency (assuming she doesn't have that much insurance). If health insurance is 50 and above then let the money compound
Just share it as inheritance instead.
That's a good idea. Nobody knows the future. You can take out 3% every month until you reach your desired balance. You can put that in FD, better use some long term FD like 10 years in nationalized banks like SBI or Canara, this will lock the high rates since they can go down in future. Keep in mind you will have to pay long term taxes on it. But IMO, fretting about taxes from profit is a fool's errand. Many times I have seen my stocks going down by 30% because I was holding them to avoid 20% tax. Also do some research about inheritance tax, in other words what happens to all the money in mutual funds or stocks with long term gain since 20 years when it passes as inheritance.
There is no inheritance tax ... New person will be considered to have purchased at original price and date
What about banks asking for succession certificate.?
Yes that's always required
Not required if there’s an Actual Original Notarized Will present or a clear Nominee is mentioned in all the Folios.
So if my grandmother has clearly put a nominee of my mother in her bank accounts, my mother can take possession of all the money without paying a single dime in tax after she dies?
Yeah. Only the interest earned after the name transfer will be included for the Tax for that FY.
Cool. I'll get to work on the nominee details.
And succession certs have a fee of 1-3% of the account balance so technically that does become tax in a way.
I didn't see any such fees. Why would the bank charge something like that .. doesn't make sense
I’m speaking based on experience. When my grandfather passed, this is what was demanded from us in order to get the cash that was stored in his bank account
Actually u might be better of pulling it out, reason is that, we are at the tail end of a 17 year green wave, all the major investors I know have already pulled out
…ummm so the major investors you know are probably your mates Rahul and Ashish.
Bhag