Firstly let me thank you for the wonderful knowledge base you’ve created for everyone. I’ve read many articles and found them to be very useful.
Let me ask you the question I have had for quite some time now:
I’m invested in a ULIP which matures in 2022. I had started it in Jan 2012. I was expected to pay premiums for first 5 yrs only which I have already done. In 2022, I’m expected to take away entire fund value either as lump sum or give Standing Instructions to be able to withdraw the fund value in installments over the next 5 yrs.
As it stands today, my investment is spread over equity funds (>90%) and debt funds (<10%) that are available as part of the ULIP. I’ve been managing asset allocation on my own so far. I cannot change asset allocation once policy matures.
- Should I withdraw entire fund value or portions only? I don’t foresee a need in 2022 to withdraw a lump sum.
- If in parts, should I withdraw monthly, quarterly, annually etc?
- Should I leave asset allocation as is even at time of maturity so it may have a chance to earn higher returns?
- Should I start moving assets from equity portion to debt portion, and when, so as to complete the entire movement prior to maturity, and to ensure that
- my entire fund value at time of withdrawal attracts zero or least tax?
- my investment is safe from market volatility if I choose to withdraw post maturity over 5 yrs?
Appreciate your responses and any other strategic advice. Please let me know if you have any questions before you are able to answer mine 🙂
Refer my post regarding taxation “Mutual Fund Taxation FY 2017-18 and Capital Gain Tax Rates“.
Withdrawing at once or spread across 5 years is depends on you. Also, if you spread over 5 years, then how you utilize that. Regarding allocation after maturity, I am against any equity allocation if your withdrawal is within 5 years.
Can you comment on how I will be taxed if I move all units to debt and withdraw post maturity over next 5 yrs. Thanks.