
Dear Sir/Madam,
I am 41 years old currently working in a Product based IT company. I have my family with a kid of 13 years living in Bangalore at a rented apartment.
The following are my details of Salary/Savings/Expenses -
My take home salary -
Monthly - 2.1 Lakhs (net income)
Savings/Investments -
1. EPF balance - 27.5 lakhs and Voluntary contribution continuing extra 10% on top of statutory contribution
2. PPF balance - 7.55 lakhs and contributing 1.5 Lakhs yearly
3. NPS balance - 9.27 lakhs and contributing 1.5 lakhs yearly
4. NPS for Spouse - 84 Thousands yearly (Current balance - 111000 as started last year)
5. LIC Policies - Total premium 2.75 Lakhs approx (yearly for 5 policies)
6. Term Insurance - 1.5 Cr (Tata AIA Smart Sampoorna Suraksha with ROP - ULIP policy)
7. Personal Medical insurance - 65000 for 3 years (Family floater) with coverage of 20 lakhs
8. Atal pension Yojona for my wife - 9888 per year
9. MIS - 4.5 lakhs
10. Equity - 7.5 lakhs (1 Large cap stock, few Mid caps, mostly small caps)
11. Mutual funds holding 1.4 lakhs through SIP - Asset allocation - ICICI Business Cycle fund (17.2%), DSP Quant fund (16.5%), SBI Gold fund (4.3%), Edelweiss Nifty 100 Quality 30 Index Fund (16.42%), Tata Ethical fund (12.8%), Zerodha Nifty LargeMidcap 250 Index Fund (33.32%) [Only last year started]
12. Additional NPS contribution to 14% of my BASIC salary
FYI - No emergency fund except considering Equity / Mutual fund that too 2-3 working days (weekend considered)
Expenses -
1. Home Loan - 4868 monthly (Running from 2010 without any gap)
2. House Rent - 21000 monthly
3. Monthly Expenses - 60000 approx
4. Personal Loan - 9871 monthly (will be over by April 2026)
5. Having Credit Card - No usage (except emergency)
6. Son's School Fees - 2.5 Lakhs yearly (Do not know if this is an investment or expense but I placed it here)
Near Future Plan -
1. To close my Personal Loan (First Priority)
2. Close my Home loan (2nd Priority as EMI is low)
3. Increase my SIP once Personal Loan is over (Approximately 10000 per month) + 15000 additional considering my salary hike (at least 10%) next year
4. No plan to sell any of my house and paternal home
I need your advise on the following points (As I am not from Finance Background) -
1. Does my investment structure looks ok to you or do I need correction?
2. I have a plan to save some money for my son for his future studies (maybe for abroad in case if needed)
3. I have a plan to buy a new house in 2036/2037 (worth approximately 1.5 Crore with maximum 5 years EMI plan)
4. Will my retirement funds be enough to sustain equal livelihood after 60 years?
Can I achieve my goals with my current financial planning?
For you to understand, I opted for New Income Tax Regime starting this year and my CIBIL score is 805
Ans: You are doing a lot of things right already. Let us now build a deep and structured plan for your current priorities, future goals, and retirement.
Understanding Your Present Situation
Age: 41 years
Net Salary: Rs 2.1 lakhs per month
Expenses: Rs 60,000 monthly
Home Loan EMI: Rs 4,868
Personal Loan EMI: Rs 9,871
Rent: Rs 21,000
School Fees: Rs 2.5 lakhs yearly
CIBIL Score: 805
Tax regime: New (from this year)
You have a good income and disciplined savings.
You also have several goals in mind.
We will now cover all these goals in detail.
Step 1: Review of Existing Investments
Let us first assess your current investment structure:
EPF and VPF
EPF is strong at Rs 27.5 lakhs
Extra 10% VPF is very good
Keep this contribution going
Continue till age 58-60
PPF
Current balance: Rs 7.55 lakhs
Annual investment: Rs 1.5 lakhs
This is a good debt portion
Continue till age 60 for compounding
NPS (Self and Spouse)
You contribute Rs 1.5 lakhs yearly
Also contributing 14% of Basic extra
Spouse NPS: Rs 84,000 yearly
Combined NPS is growing well
Continue contributions till age 60
Helps in creating pension flow later
Partial withdrawals possible after age 60
Mutual Funds
You have the following MF allocation:
Equity Exposure: Rs 1.4 lakhs via SIP
You have both active and index funds
Overweight to index funds, especially Nifty LargeMidcap
Also have a thematic gold fund and quant fund
Only started last year, still early stage
Important: You have too many index funds.
Avoid over-exposure to index schemes.
Index funds don’t react well to market changes.
Actively managed funds give better long-term returns.
With index funds, there is no human strategy.
No downside protection during crashes.
Regular funds offer MFD and CFP advice support.
Use only regular plans through trusted MFDs.
Action: Reduce exposure to index funds.
Shift slowly to quality active funds in large and mid-cap.
Equity Stocks
Rs 7.5 lakhs spread across large, mid, and small caps
Mostly small caps with some mid caps
Only one large cap
You are exposed to high volatility
Action: Reduce small cap exposure.
Shift part to large-cap active mutual funds.
Avoid concentrated risk in few direct stocks.
LIC and ULIP
Annual premium: Rs 2.75 lakhs for 5 policies
Also have ULIP-based term plan (Rs 1.5 Cr)
Action: You are over-invested in insurance policies.
LIC and ULIP give poor returns after adjusting inflation.
You should evaluate surrendering these LIC plans.
ULIP with ROP feature is expensive and return is low.
Consider replacing ULIP with pure term insurance.
Use surrender proceeds to start SIPs.
MIS and APY
MIS: Rs 4.5 lakhs, giving stable income
Atal Pension for wife is fine
Use this as small retirement backup
Step 2: Emergency Fund Creation
Right now, you don’t have any real emergency fund.
You consider equity and MF for it.
But they are not liquid during holidays or crashes.
Action:
Build emergency fund of Rs 3–4 lakhs
Use liquid mutual funds or sweep-in FD
Don't mix with equity holdings
Emergency fund gives safety during job loss or medical issue
Start monthly Rs 10,000 till it is ready
Use future bonuses or incentives to top-up
Step 3: Debt Management Plan
You are already clear about your loan priorities:
Personal Loan
EMI: Rs 9,871
Ends April 2026
First priority to close this loan
High interest makes it expensive
Use bonus or increment to prepay early
Aim to finish 6 months before schedule
Home Loan
EMI: Rs 4,868 only
Running since 2010
Almost at the end
Not a burden at all now
Enjoys tax benefit on interest
Don’t rush to close
Close this once personal loan is over
Step 4: Son’s Education Planning
Your son is 13 years old now.
You may need funds after 5 years.
Abroad education may need Rs 50 lakhs or more.
Current Education Funding Assets:
No dedicated corpus yet
School fee of Rs 2.5 lakhs per year is being paid
No specific investment marked for college
Action Plan:
Start a separate child-focused SIP now
Allocate Rs 15,000 per month
Use aggressive large and mid-cap mutual funds
Avoid ULIPs or endowment policies
Increase by Rs 2,000 every year
After 5 years, you may reach Rs 12–15 lakhs corpus
Remaining can be supported by NPS partial withdrawal
Or via educational loan (if abroad)
Step 5: Retirement Planning Analysis
You are saving in EPF, PPF, NPS, and MFs.
Let’s assess if this will be enough post age 60.
You have 19 years till age 60.
Assuming:
EPF continues
PPF and NPS continue
SIP grows to Rs 25,000 in 2 years
LIC/ULIPs are surrendered and reinvested
Bonus and rent adjustments are managed
You can expect to create:
EPF corpus: strong and compounding
PPF corpus: tax-free and risk-free
NPS: structured for post-retirement
SIP: flexible growth engine
Spouse NPS: adds pension stability
This structure looks sustainable.
But inflation must be monitored.
Ensure post-retirement monthly need is calculated every year.
Consider delaying retirement to age 62 for safer buffer.
Step 6: Future Home Buying Plan (2036–2037)
You plan to buy a Rs 1.5 Cr home
with a 5-year EMI plan.
That means:
Loan EMI could be Rs 2.2 to 2.5 lakhs
You must prepare Rs 50 lakhs down payment
Action:
Begin a separate investment fund from 2028
Target Rs 50 lakhs by 2036
Invest Rs 20,000 monthly in hybrid mutual funds
Don’t mix this with retirement or education funds
Keep funds earmarked for home goal only
Once house is bought,
loan will be over before your retirement.
Step 7: Insurance Correction Needed
You have ULIP-based term plan.
Also have 5 LIC policies.
No pure term cover apart from this.
Action Plan:
Buy a Rs 1.5 Cr pure term plan separately
Premium is low compared to ULIP
Don’t rely on ROP policies
Surrender ULIP and LIC policies
Redirect all proceeds into MFs
Keep medical insurance active and renew on time
Step 8: SIP Strategy Moving Forward
After personal loan closure in 2026,
you plan to increase SIPs by Rs 25,000.
Action Plan:
Rs 15,000 SIP for child education
Rs 10,000 for long term wealth / retirement
Choose only regular funds via MFD + CFP
Review portfolio every year
Do not go fully into passive index funds
Use active funds for alpha generation and downside protection
Don’t DIY your investments blindly.
Use structured guidance and fund review support.
Step 9: Tax Implication Awareness
You are under the new tax regime.
Many deductions are not useful now.
Your EPF, PPF, NPS continue growing tax-free.
MF tax rule:
Equity MF LTCG above Rs 1.25 lakh taxed at 12.5%
STCG taxed at 20%
Debt fund gains taxed as per income slab
Hold equity funds longer than 5 years.
Do not book short term profits unnecessarily.
Step 10: Final Cash Flow Hygiene
Maintain budget every month
Track all EMIs, SIPs, policies, fees
Use spreadsheet or budget app
Avoid new credit cards or personal loans
Don’t co-sign loans for friends or family
Revisit goals yearly with a certified financial planner
Create a written financial plan
Discuss it with your spouse and involve her in all goals
Finally
Your current plan has a good foundation.
Only a few corrections are needed.
Fix the insurance structure.
Avoid index fund overload.
Build emergency fund.
Start child-specific SIP.
Increase long term SIPs post-debt closure.
Stay invested till retirement with discipline.
You are already doing well.
These small changes will bring better results.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment