corpus with Mr Rao : 60 lacs Monthly expense : 35000 approx per Month Life expectancy after retirement : 20 years Scenario 1::(without inflation) This monthly withdrawal is only 6.6% of his total corpus which is easily achievable by any bank fixed deposit as well as any accrual fixed income instrument. Even if we consider inflation to affect his withdrawal every consecutive year then also a well planned SWP of 35000 per month can be carried out putting immediate 6 months money into liquid, So if i do an asset allocation as 4% liquid 25 % arbitrage with monthly dividend switching to equity funds(capital intact returns more than any tax free bonds/fixed deposit) 25% MIP kind of structure (for 3 years tenure) 47 % Equity weekly STP of 90 days./customized switch during dips. yearly review and restructuring of portfolio. All calculations worked on excel We shall give him a tension free life with his requirements met in proper.

I would suggest Mr. Rao to fund about 3 lac in Liquid Fund (no load) and withdraw 25000/- per month through SWP. Another 25 lac can be parked in a dynamic bond fund with different maturity to ensure gain in case of interest rate goes low and accrual play in reverse situation. I would also like him to park about 12 Lac in Corporate Bond Fund. Rest 20 Lac can be invested in a Hybrid Fund viz. Franklin Dynamic PE Ratio FOF or ICICI Balanced Advantage Fund.

Rs.40lac can be parked in bank FD Alternatively Rs.20 lac may be invested in liquid fund with SWP of Rs.10000/- (assuming returns 6%) Rs. 20 lac invest in MIP Balance to invest in balanced fund

Mr. Raos monthly expense is not too high. One better option is to suggest him the combination of Balance Fund (For equity growth), Medium Term debt fund (for tax free FD type return) and Short term/Ultra ST fund (capital protection-monthly withdrawal, vacation expense and peace of mind). Even if the portfolio return is just 10-11 % a year.(Balance fund-11-12%, Medium Term -10% and short term-8-9%). After all his monthly expense and vacation expense, He can re invest 2 to 2.5 lac every year and can build a corpus to meet inflation. Initially for two year he should withdraw his monthly expense from the Short term/ultra ST fund where all his money are fully secured. For all his tenure he should have a fix corpus for emergency and his vacation in this fund. After 2 years, His monthly withdrawal should be from the balance fund. After 3 years he should re balance his portfolio based on the economy and circumstances.

Since reverse mortgage loan does not feature in above suggestions, I would evaluate it and assess if its feasible & prudent to consider it after taking into account the various pertinent factors. Irrespective of whether he finally decides against it and opts for a conventional plan, it might be worth presenting an alternative that offers the potential to meet both his goals while simultaneously enabling him to invest the lumpsum with a longer time frame and a less conservative approach that can deliver superior returns.