Can you please suggest different mutual fund options to invest Rs 2 lakh for a 62-year-old widow with no responsibility and earning good pension? Is a systematic withdrawal plan advisable?
-Shailesh Bhaskute
Keeping in mind the individual’s age and the fact that she has no financial responsibility, no debts, assuming no dependents and earning a good pension, she could invest in a ‘Hybrid: Equity oriented’ where a minimum 60 per cent of the assets will be in equity, the balance in debt. If she finds this too aggressive, she could consider the ‘Hybrid: Debt-oriented Conservative’ category where a maximum 25 per cent will be allocated to equity.
In case of a systematic withdrawal plan (SWP) one needs to take into account the tax implication on the withdrawal. To make the investment tax efficient, we suggest she invest in the dividend option which is tax free.
This article was originally published on May 16, 2012.
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