Hi , I am 36 year old earning 1.9 lakhs per month and in terms of liability I have car loan remaining 6 lakhs (emi 16k). My wife she is 31 and earning 1.6lakhs per month and having personal loan of 4 lakhs. We both have an fd of close to 50 lakhs and rd of 20 lakhs. We live on a rented flat which is 30k month and have no other liability . We have started ppf now and have nps from our company. We don't have any other investments . We want to have a plan on retirement and our 6year old education . How much money is needed for retirement at age 50? Also buying a home in Bangalore is a wise decision now at 36?
Ans: . Your questions are thoughtful and timely. Let us explore them one by one with clarity and care.
Your Financial Profile – A Quick View
You are 36 years old. Your wife is 31.
Monthly family income is Rs. 3.5 lakhs.
Car loan of Rs. 6 lakhs with Rs. 16,000 EMI.
Personal loan of Rs. 4 lakhs by your wife.
You pay Rs. 30,000 as house rent.
You have Rs. 50 lakhs in FD and Rs. 20 lakhs in RD.
You have started PPF.
You both have NPS from your employers.
You have a 6-year-old child.
No other investments made yet.
Appreciating Your Financial Efforts
You both earn well and have created solid savings.
No unnecessary lifestyle debt.
You’ve begun PPF and have employer NPS – a good start.
FDs and RDs of Rs. 70 lakhs show discipline.
Assessing Your Current Investments
Fixed Deposits and Recurring Deposits
FD and RD give safety. But returns are low.
Post-tax returns may not beat inflation.
FDs are taxable. Tax eats into your actual gain.
You can keep 6 months of expenses in FDs for emergencies.
The rest can be channelled into better options for growth.
On NPS and PPF
Both give tax benefit and are safe.
But NPS has lock-in till retirement.
PPF is good for long-term, but limited contribution allowed.
These cannot alone build your full retirement corpus.
Should You Buy a Home in Bangalore at 36?
A house gives emotional security. But it’s a big decision.
Real estate also brings huge loan, interest and maintenance.
Property prices in Bangalore are high. Entry cost is steep.
You already have Rs. 30k rent. A home EMI will be higher.
You’ll need down payment of Rs. 30-40 lakhs minimum.
It can eat into your FD/RD corpus.
Home loan EMI can block cash flow for other goals.
It may delay child’s education funding and early retirement.
Property may not grow fast in value after purchase costs.
Flexibility reduces if you buy now. Renting gives freedom.
So, home buying should be delayed till education and retirement are on track.
Your Retirement at Age 50 – Is It Possible?
You aim to retire at 50. That’s only 14 years away.
Your current age and income allow this dream.
But it needs aggressive planning now.
Your retirement may last 35 years or more.
So corpus needed is large due to inflation.
Also medical and lifestyle costs will rise.
Building a Strong Retirement Corpus
Rs. 70 lakhs in FD/RD must be re-allocated.
Don’t keep all in low return instruments.
Begin investing monthly in actively managed mutual funds.
SIPs offer compounding. They beat inflation.
Choose funds based on risk appetite and goals.
Start with equity-heavy portfolio now.
Shift to debt allocation slowly after age 45.
Avoid index funds.
They copy markets. No downside protection.
In volatile markets, they fall without control.
Active funds have professional management.
Fund managers exit bad stocks in time.
They give better returns with lower risk.
Why Regular Plans via MFD and CFP are Better than Direct Plans
Direct funds may look cheaper on paper.
But guidance is missing.
You may pick wrong funds or wrong mix.
No one will rebalance or monitor regularly.
Regular plans through MFD with CFP guidance give:
Tailored advice for you.
Goal mapping done by expert.
Portfolio is reviewed, updated, and adjusted regularly.
Emotions are managed during market falls.
Timely exit and entry strategies are given.
Your Child’s Education Planning – Key Priority
Your child is 6 years old.
Higher education starts in 12 years.
Engineering, medical, or abroad studies need Rs. 40-80 lakhs.
This cost doubles every 6-8 years.
FDs won’t grow that fast.
Begin dedicated education goal SIPs now.
Use child-specific mutual funds or multi-cap diversified equity funds.
You need a mix of safety and growth.
Don’t rely only on scholarships or education loans.
Loans are stress for your child later.
Action Plan – Step by Step
Pay off personal loan first. It has high interest.
Increase your SIPs monthly after that.
Car loan is moderate. Pay EMI as planned.
Keep Rs. 10-12 lakhs as emergency in FD.
Use balance Rs. 58-60 lakhs for mutual fund investments.
Start SIPs in different categories with CFP guidance.
Start separate SIPs for retirement and child education.
Keep increasing SIPs every year as income grows.
Avoid lump sum unless market corrections occur.
Tax Planning Angle
You already invest in PPF and NPS.
Add ELSS funds for Section 80C.
ELSS has 3-year lock-in.
Gives market-linked returns.
Good for long-term wealth creation.
Insurance – A Must Check
Do you both have term insurance?
Term cover should be minimum 15-20 times your annual income.
Avoid ULIP or endowment policies.
If you hold any such LIC or ULIP policies, surrender them.
Reinvest into mutual funds with a goal-based plan.
Take separate health cover for family.
Employer cover is not enough or permanent.
What Not to Do
Don’t buy home now just due to peer pressure.
Don’t invest in real estate as an investment.
Don’t put all money in FD and RD.
Don’t invest in direct funds without guidance.
Don’t buy insurance policies as investments.
Lifestyle Adjustments and Budgeting
Keep expenses in check even with high income.
Avoid luxury loans and credit card debts.
Monitor spending on lifestyle and gadgets.
Save minimum 40% of your income every month.
Review Every Year
Sit with a CFP yearly to review.
Check progress of SIPs and goals.
Adjust fund choices if needed.
Track performance and make corrections.
Finally
You have strong income and savings.
With focused planning, retirement at 50 is possible.
Start goal-based mutual fund SIPs soon.
Keep real estate for later, not now.
Give your child an education without debt burden.
Let your wealth grow in right directions with expert guidance.
Be disciplined, consistent and review annually.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment