I m 51 yrs old .I have FD of 60 lacs .Started SIP of 60 thousand .Have life insurance in LIC, HDFC,TATA Aig and Axis .Have PPF of 18lacs .Have invested in real estate .Now i want to plan a good retirement .How should i go
Ans: At 51, planning for retirement now is wise and timely. You’ve made disciplined choices already. Let's assess your current position and structure a 360-degree strategy for your retirement.
Your Current Financial Position
Here’s a simple summary of where you stand:
Fixed Deposit: Rs. 60 lakhs
SIP Investment: Rs. 60,000 monthly (recently started)
Life Insurance Policies: With LIC, HDFC, TATA AIG, Axis
PPF Balance: Rs. 18 lakhs
Real Estate Investment: Already made
Age: 51 years
You are on the right track. However, to ensure a smooth retirement, a structured and evaluated approach is needed.
Step 1: Understand Your Retirement Goal
Let’s think ahead 9 to 12 years. That is when you will likely retire. By then, you need:
A steady monthly income
Emergency medical funds
Funds for lifestyle, travel, and other goals
Protection from inflation
Your retirement corpus must give consistent income for at least 30 years after retirement.
Step 2: Evaluate Each Current Investment
Let us evaluate the strengths and issues in each of your current financial instruments.
1. Fixed Deposits – Rs. 60 Lakhs
FDs give safety but very low returns. Post-tax returns hardly beat inflation.
Issues with FDs:
Returns fall below inflation
Entire amount is taxable
No growth or wealth creation
Can’t support long-term retirement expenses alone
Suggestion:
Keep only 12–18 months of expenses in FD
Shift rest slowly into mutual funds through STP
2. SIP of Rs. 60,000 Monthly
Excellent habit. SIP is powerful. But we need to know:
Type of funds you are investing in
Whether they are regular funds through CFP or direct funds
If SIP is in direct funds, you may lack personalised review.
Disadvantages of Direct Mutual Funds:
No guidance from Certified Financial Planner
Emotional mistakes like panic withdrawals
No handholding during market falls
No periodic portfolio rebalancing
Hidden mistakes in fund selection
Advantages of Regular Funds through CFP:
Annual review and fund switch suggestions
Proper asset allocation based on your age
Investment aligned with your risk level
Right mix of equity and debt funds
Action Point:
Check if your SIP is through direct plans
If yes, move to regular plans via a CFP
Review funds and diversify as per your retirement horizon
3. PPF – Rs. 18 Lakhs
PPF is a safe, tax-free, and useful debt product.
Good points:
Tax-free returns
Secured by government
Acts as retirement cushion
However:
Interest is reducing over time
Lock-in is long
Not enough for full retirement income
What to do:
Continue with annual contribution
Use this for post-retirement safety bucket
Do not over-invest here
4. Insurance Policies (LIC, HDFC, TATA AIG, Axis)
Most likely, these are traditional or ULIP policies.
Problem with Investment + Insurance Plans:
Very low returns (5–6% only)
Long lock-in periods
Not inflation-beating
Complicated to track
What you should do:
Identify all policies that are not term insurance
Surrender them if minimum term is over
Reinvest that money in mutual funds via SIP/STP
Buy a standalone term plan if you don’t have one
Surrendering Policies? Yes, if these are:
Endowment plans
Money-back policies
ULIPs
You will benefit more if you surrender and reinvest carefully.
5. Real Estate Investment
You already have exposure here. Please don’t increase more.
Why not real estate?
Low liquidity
High transaction cost
Rental yield is poor
Maintenance cost rises with time
Cannot support monthly expenses
Action:
Hold current properties
Do not depend on them for retirement income
Don’t buy more for investment purpose
Step 3: Create an Ideal Retirement Strategy
Now let’s build your plan based on what you should start doing.
Ideal Asset Allocation for You
Equity Mutual Funds – 50% of corpus
Debt Mutual Funds + PPF – 30%
FD + Liquid Funds – 10–15%
Gold Funds or Sovereign Gold Bonds – 5–10%
This will balance growth and safety.
Keep SIP Alive, But Diversify
You must continue SIP. But it should be well-diversified.
Split Rs. 60,000 monthly SIP across:
Large cap and flexi cap mutual funds
Balanced advantage funds
Hybrid equity-debt funds
Low duration debt funds (for stability)
Review funds every year with a CFP.
Do not chase small cap or thematic funds at this stage.
Set Up a Medical Emergency Fund
Health issues increase post-55. Keep funds aside for:
Medical emergency
Hospitalisation
Health premiums
Steps:
Get a good health insurance with Rs. 10–25 lakh cover
Keep Rs. 5–10 lakhs in liquid mutual funds for health
Build Retirement Income Buckets
Break your retirement corpus into 3 buckets.
Bucket 1 (0–5 Years):
Liquid funds, short-term debt funds, FD
For monthly expenses after retirement
Should cover at least 5 years of cash flow
Bucket 2 (6–15 Years):
Hybrid mutual funds, balanced advantage funds
Grows moderately with limited risk
Will refill Bucket 1 when needed
Bucket 3 (15+ Years):
Pure equity mutual funds
For long-term growth and legacy
Will protect against inflation in later years
This approach ensures peace of mind and regular cash flows.
Consider STP from FD to Mutual Funds
You already have Rs. 60 lakhs in FD.
Don’t move it all at once
Use STP (Systematic Transfer Plan)
Transfer monthly into mutual funds over 2–3 years
Reduce risk and benefit from market averaging
Talk to a CFP to plan this properly.
Tax Planning in Retirement
You must know the tax impact on withdrawals.
PPF is tax-free
FD interest is fully taxable
Equity mutual funds – LTCG above Rs. 1.25 lakh taxed at 12.5%
Equity STCG is taxed at 20%
Debt funds taxed as per your income slab
Plan redemptions smartly to save tax.
Avoid These Mistakes
You are close to retirement. Avoid:
Buying more real estate
Continuing traditional insurance policies
Investing without reviewing
Taking advice from unqualified people
Putting all money in FD
Finally
You’ve taken important steps already. That deserves appreciation.
Now is the time to optimise, protect, and grow wisely. Retirement planning must cover:
Growth for inflation
Safety for market risk
Liquidity for expenses
Simplicity in portfolio
A certified financial planner can help you assess this every year.
Key Actions for You:
Shift from FD to mutual funds in a phased manner
Surrender low-return insurance policies and reinvest
Continue SIP with proper diversification
Build three retirement buckets
Keep health fund ready
Use regular mutual funds with guidance
Avoid direct and index funds for lack of personalisation and performance
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by Chandan on Feb 24, 2023English
