I am 44 and have Rs 20 lakh in my account. My two primary goals are my daughter’s education in 10 years and retirement income of Rs 1.5 lakh per month. Can you please suggest a mixed portfolio to achieve my goals? Can you also suggest an NPS plan in the aggressive lifecycle option? Since bank rates are low, where should I park my emergency funds?

Naveen Kukreja CEO and Co-Founder, Paisabazaar.com replies: Since your goals are long-term and you are an aggressive investor, I suggest you build your corpus through equity mutual funds. For both goals, you should invest a total of Rs 56,000 per month, through SIPs. For your daughter’s education, invest the Rs 20 lakh surplus in equity mutual funds through SIP over a period of one year. During this tenure, ensure you keep this fund in a high-yield savings account. Invest an additional Rs 20,000 per month through SIP in equity mutual funds. Both these would give you a corpus of Rs 80 lakh in 11 years, assuming an annualised return of 10%. Two years before you need the corpus, start transferring these equity investments into short-term debt funds.

Invest in the direct plans of Axis Bluechip Fund or Axis Focussed 25 Fund; Mirae Asset Large Cap Fund; Parag Parikh Flexi Cap Fund; and Tata Index Sensex Fund or HDFC Index Sensex Fund. For your post-retirement corpus, invest Rs 36,000 per month in the above-mentioned funds through SIPs for the next 16 years. This will create a corpus of Rs 1.65 crore. Once you reach your retirement age, withdraw Rs 80 lakh from this corpus and invest it in short-term debt funds. Keep the rest invested in equity funds. Assuming an annualised return of 6% and monthly withdrawals of Rs 1.25 lakh, the debt portfolio will last seven years. During this period, your remaining equity corpus will grow to Rs 1.65 crore.

Again, redeem Rs 80 lakh from the corpus to replenish your debt corpus. Repeat this cycle every seven years. In case you are unable to invest Rs 56,000 per month, prioritise your retirement savings. Your daughter can always take an education loan. Choose equity mutual funds over NPS as you are an aggressive investor and can invest only up to 75% in equity in NPS. For your emergency fund, keep six months’ worth monthly expenses in high-yield savings account offered by small finance banks. You may also choose FD for your emergency funds.

I have opted for the dividend option in my mutual fund investments. Can I get a certificate from the fund house annually stating how much was paid to me as dividend and how much was withdrawal of capital? My investments are very old and my dividend yield is more than 40%.

Rushabh Desai AMFI registered mutual fund distributor replies: AMCs do provide separate dividend and capital gains statements. You can also procure these statements from CAMS and KARVY for multiple schemes serviced by them. Dividends are declared at the discretion of the fund manager and or AMC and there is no guarantee regarding payout amount and frequency. Also, dividend options are very tax inefficient in comparison to growth. Your cash flow requirements, if any, can be fulfilled by Systematic Withdrawal Plans. If you would want to protect or enhance your returns you can manually adjust the amount and frequency of your withdrawals.

With no liabilities, sufficient term plan and family floater medical policy in place, I want to invest for my children in stocks for at least 10 years. Which stocks and in what proportion (sector wise) should I invest in? Should I invest in lumpsum or through SIP? I have a budget of Rs 5 lakh.

Raj Khosla Founder and Managing Director, MyMoneyMantra.com replies: Investments in equity markets belong in the high risk-high return category. You should not invest directly in equity markets without understanding market volatility and the associated risks to capital. There is no guarantee of assured returns or dividends. The prevailing instability makes it an unsuitable time to enter stock markets without professional advice. Particularly lump sum investments are a big NO. Rather, opt for a mix of small, mid, large and multi-cap equity mutual funds and invest Rs 40,000 per month through SIPs. Invest Rs 8,000 in each of the following funds: Mirae Asset Large Cap, ICICI Prudential Multi Cap, Axis Flexi Cap, SBI Magnum Mid Cap and Kotak Small Cap fund.