r2i forum

I am considering early retirement and honestly get out of this rat race. I'm 40, wife 35 and son 5 years. I have an apartment in Dehradun which is new. How should i distribute my corpus of Rs. 4 crore for a steady and increasing annual passive salary (to account for 5% inflation) and a mortality of 80 years ? The plan is to hang my boots - no more working for a living but more spending part-time doing social and community development activities and the rest leisure.

Cheers,
DDA

Congratulations. We are planning on doing the same next year!
First, do you plan on keeping most or all of your corpus in India? Secondly, are there any US taxation issues like PFIC to keep in mind? Lastly is all of the corpus liquid or is a part of it in property or retirement funds, etc?

In India, it would be good to invest about 20% into stocks whenever the markets are down. You can judiciously choose a mix of dividend funds to reduce your tax bill. You can invest a part into FMPS to get higher returns and reduce tax liability. Make sure to also keep some funds in your wife's name to take advantage of her tax deduction and keep your overall income lower per person. India doesn't have a joint tax return system.

If I were in your shoes, I would keep at least I crore in fixed deposits across FMP and banks and about 50 lacs in stocks. Try to keep at least half the funds as a reserve to generate income to take care of future inflation if possible. I would also invest a part into property as a hedge against inflation and maybe a smaller part into gold (physical or ETF- stock funds) but only at a good time when the metal prices have dipped a bit.

Good luck and congratulations! Tell us a little more about Dehradoon. Things like what activities are there to do, why you chose it and approx apartment costs.

I assume that you have some previous connection with D'Dun, especially since you have already acquired a flat there.
There are a lot of sightseeing places around and relatively cooler than the north indian plains. Number of good schools around. A good choice.
As suugested by miss india, a crore in fixed income investments should give you sufficient income for a better than decent living.
In addition to stocks, I would consider investing in another property in and around D'Dun. May be, it will take time but you have a long way to go and should reap the benefits. I would have suggested some farther away places as well but then it may become a hassle to maintain it.
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Remember that the advisor who invests all your money is called a "broker."

what is FMP?

RK

rajradio;391286what is FMP?

RK

I think it is Fixed Maturity Plans

rajradio;391286what is FMP?

RK

Fixed Maturity Plans- only 15% tax is deducted at source- the taxpayer doesn't have to pay anything.

Thank you all. Any considerations towards immediate annuity products in India ? Believe the are still no inflation linked annuity products ?

In addition I am also looking to create two edu. corpus for the kid. Investment ammounts go into a long term equity growth MF. Should expect around 12-18 % return p.a. over 18 to 20 years. Is that a way forward ?

Dehradun is nestled in the wide valley between the Shivaliks in the south, lower Himalayas in the north, Ganges in the east and Yamuna in the west. You can expect some cool temperate weather through the year. Dehradun has always been home to a good choice of quality schools both residential and day till 10+2. Its only 230 kms from Delhi and well connected. Quality real estate is still affordable but quickly picking up. The city has still a laid back lifestyle and offers a base if you love trekking, river rafting skiing etc.

Good for you dda. I love your plan and hope it all works out. I'm planning to do something similar eventually, just not with a wife/kids.

You are on track and i feel the same way here in usa and i want to get out asap. Started to feel suffocated by the people around me.