The industry veteran, who held various leadership positions in his career, envisions securing a stable financial future during his sunset years in a peaceful setting. Though the exact location is yet to be decided, his priorities are clear—a place with cleaner air, a vibrant social community and good connectivity. He views retirement as a time to give back to society.
Initially, Singh’s portfolio was primarily split between real estate and equities, including employee stock options (Esops), with minimal debt investments beyond his Employees’ Provident Fund (EPF). Realising his investment portfolio needed a shift to align with his future goals, including his sons’ overseas education, Singh approached Mumbai-based Ladder7 Wealth Planners in July 2016.
Withdrawal strategy
Before embarking on his financial planning journey, Singh’s portfolio consisted of 25% in real estate, 49% in equities, 18% Esops, and just 8% in debt, solely through EPF.
Singh’s advisors recommended a more balanced approach. “Dalveer had a sizeable portfolio with good earnings. His main priority was ensuring his children’s overseas education costs were covered. We also identified that he needed to align his investments with his goals and objectives and be more disciplined about investments and budgeting, ” said Suresh Sadagopan, founder of Ladder7 Wealth Planners.
To ensure a stable foundation for his financial future, fresh money was added to debt portfolio, which has been further sub-divided into different buckets.
Over the years, Singh has gradually shifted his investments, increasing his debt exposure to 40%, with reduced exposure to real estate at 14% and equities at 46%. The real estate exposure has reduced as fresh money got allocated to debt.
In addition to realigning his investments, Singh also created a regular income stream for household expenses. He allocated 15% of his debt investments to bonds, corporate fixed deposits, and non-convertible debentures, generating consistent payouts from interest. These funds came from his Esop proceeds.
Singh’s portfolio has delivered annualised returns of 10.7% over the past five years. His equity investments continue to compound, while the debt portion supports his near- to medium-term financial goals. He is yet to withdraw funds from his EPF, allowing it to earn additional interest.
The additional regular income plan will get implemented through systematic withdrawal plans via debt mutual funds. “The equity investments can be allowed to compound further, as the debt investments are sufficient for now to cover near- to medium-term goals The EPF corpus can also remain invested and continue to earn interest,” said Amol Erkar, senior financial planner, Ladder7 Wealth Planners.
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Overseas education
With 43% of his debt portfolio earmarked for his children’s overseas education and wedding, Singh feels confident about their futures. Around 26% is in strategic debt, comprising investments in debt funds before March 31, 2023, which remain eligible for indexation benefits.
His older son, 24, recently completed undergraduate studies at Stanford University and plans to pursue postgraduate education. His younger son, 21, is pursuing his undergrad from the University of British Columbia in Canada, and is also preparing for his postgraduate studies.
PMS to mutual funds
Though Singh had a few mutual funds between 2008 and 2015, his equity investments were largely in portfolio management services (PMS).
The PMS had a seven-year lock-in period. After this time, according to Singh, he only achieved single-digit annualised returns, which was disappointing. However, he admits that this could also be attributed to the market downturn starting with the 2008 financial crisis.
After meeting his financial planner in 2016, Singh gradually transitioned from PMS to mutual funds, finding MFs more comfortable and less restrictive. His equity allocation now predominantly consists of MFs—70% of his equity portfolio—offering better returns and flexibility.
Singh also has an old investment in a unit-linked insurance plan (Ulip), which he doesn’t want to exit now as the maturity is just two years away.
Retirement home
Singh wants to settle somewhere away from the fast-paced city life, and is still weighing in his options, looking for the ideal place that would meet his expectations with a cleaner environment, a supportive social set-up and good connectivity.
Singh is considering funding his retirement retreat either by selling his real estate assets or from his savings. “We will see how we can fund that purchase once we finalise the place,” he added.
Since Singh hails from Haryana, where he has ancestral land, besides a farmhouse in Delhi, north India is a strong contender.
Life after retirement
Singh doesn’t view retirement as an end but a new beginning to pursue his interests and hobbies, and at the same time, aims to give back to society, seeing this phase as an opportunity for personal and social contributions.
“I wanted to retire at 50, so I am already five years late. Now, that I have enough corpus to maintain my current lifestyle, and enough fuel in the tank to plan the journey over the next 25 years, I felt it was the right time to get liberated from the corporate world. My life theory is that the first 25 years are to learn, next 25 years are to earn and the next 25 years are to return (to society),” he said.
Insurance
Having accumulated adequate assets and met his responsibilities, including providing for his children, Singh feels no need for additional life insurance. His health insurance is covered by a family floater plan with a ₹50 lakh cover.
Takeaways
While Singh had the resources, he acknowledges the importance of financial planning in ensuring family goals were met and his investment portfolio optimised to make sure his retirement started on a solid financial footing.
“I was blessed with a decent earnings trajectory, leadership positions for most part of my career, which put me in a good spot to meet my financial goals,” he said.
To avoid additional liabilities, whenever possible, he used his savings from bonuses and earnings for real estate investments instead of availing a home loan. Similarly, he was able to fund his children’s overseas education through his savings, with the help of his financial planner.
With a well-managed investment portfolio and financial planning, Singh is looking forward to his golden years to enjoy the fruits of his labour and embracing new opportunities for personal growth and community involvement.
