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Prof Suvasish Mukhopadhyay  |2424 Answers  |Ask -

Career Counsellor - Answered on Jun 22, 2025

Professor Suvasish Mukhopadhyay, fondly known as ‘happiness guru’, is a mentor and author with 33 years of teaching experience.
He has guided and motivated graduate and postgraduate students in science and technology to choose the right course and excel in their careers.
Professor Suvasish has authored 47 books and counselled thousands of students and individuals about tackling challenges in their careers and relationships in his three-decade-long professional journey.... more
Asked by Anonymous - Jun 22, 2025Hindi
Career

Sir, my son is getting Materials Science and Metallurgy in IIT Indore, Electronics in NSUT/ DTU Delhi and Chemical in BITS Pilani. Please advice what option to take up.

Ans: First let me know what is his choice.Best of luck. I am always there by the side of the children who need counselling. For placement of CSE branch don’t worry. I personally placed more than one students of CSE branch in reputed international companies. May GOD bless always. Prof. Suvasish Mukhopadhyay.
https://www.linkedin.com/in/professorsm/
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Nayagam P

Nayagam P P  |8220 Answers  |Ask -

Career Counsellor - Answered on Jul 08, 2025

Asked by Anonymous - Jul 08, 2025Hindi
Career
Sir, 1. Chemical Engineering at NIT Warangal Or 2. CSE at IIIT Kanchipuram or 3. Dual Degree programs, such as MSc Biology at BITS Hyderabad. Each has its own reputation. NIT Warangal, being one of the top NITs, but, we are uncertain about its future prospects compared to a branch like CSE. IIIT Kanchipuram is a mid-tier IIIT; however, the branch is CSE, which is what my son is leaning towards. The BITS dual degree, though a reputed one, will keep us guessing and put us in uncertainty for one more year as to which BTech branch he will be allotted. The obvious choice seems to be taking CSE, as he's inclined anyway. But, is a CSE degree from IIIT Kancheepuram worth it? Had it been a top-tier IIIT, this question wouldn't have been raised at all. Thank you in advance for your advice.
Ans: NIT Warangal’s B.Tech in Chemical Engineering combines a strong curriculum, experienced faculty, modern process and reaction engineering labs, robust MoUs for industrial internships, and consistent placement rates around 87.21% over the past three years with a median package of ?11.88 LPA. However, heavy theoretical rigor, narrower recruiter diversity, moderate average packages compared to CSE, limited elective flexibility, and a rural campus setting are considerations. IIIT Kanchipuram’s B.Tech CSE programme offers a government-backed PPP model, dedicated AI/ML and software labs, practical design projects, growing industry tie-ups, and an average package of ?9.60 LPA with a current placement rate of 53.4% in CSE. Yet, its mid-tier ranking, fewer top-tier recruiters, ongoing campus-placement growth, smaller alumni base, and lower placement consistency pose challenges. BITS Hyderabad’s four-year Integrated M.Sc. Biological Sciences delivers interdisciplinary training, state-of-the-art biotech and molecular labs, dual-degree flexibility, strong research centres, and an 87.39% placement rate in 2024 with an average salary of ?20.36 LPA. Drawbacks include high fees (?20.76 L total), potential delay in branch clarity, limited core engineering exposure, intense academic demands, and placement uncertainty for pure science graduates.

For highest immediate ROI with strong core-engineering and placement stability, the recommendation is NIT Warangal Chemical Engineering. Next in preference is BITS Hyderabad Integrated M.Sc. Biological Sciences for top?tier research exposure and superior average packages, followed by IIIT Kanchipuram CSE if his primary inclination toward computing outweighs its nascent placement record. My Suggestion: Since your son has a strong interest in Computer Science, opting for IIIT-K CSE would be a wise decision. To stay competitive, it’s important that he maintains a consistent and decent CGPA throughout his academic journey. Alongside, he should continue upgrading his technical skills over the next four years, aligning with faculty guidance and evolving job market trends. Developing a strong and professional LinkedIn profile and focusing on soft skill development will also significantly enhance his placement prospects. All the BEST for Admission & a Prosperous Future!

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Ramalingam

Ramalingam Kalirajan  |9453 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Asked by Anonymous - Jul 07, 2025Hindi
Money
I am currently 27 years old. I have a home+ education loan of 55L, current income 30L/ year and i am Investing in MFs 30k/month. What should be the correct strategy to allocate money - repay loan or increase investing amount.
Ans: At 27 years, your financial discipline is worth appreciating. Having a strong income of Rs.30 lakhs annually, while managing a Rs.55 lakh loan and still investing Rs.30,000 monthly in mutual funds shows good intent and effort. Now your main question is—should you increase investments or repay the loan faster?

Let us look at your profile from a 360-degree view to find the right path forward.

Understanding Your Financial Snapshot

Age: 27 years

Income: Rs.30 lakhs per year (approx Rs.2.5 lakhs per month)

Loans: Rs.55 lakh (home + education)

Current SIP: Rs.30,000 per month

Goal: Decide between increasing investments or repaying loan early

You are in early career stage with a good salary.
Your financial mindset is mature. This is rare at your age.
But now comes the big question—what gives better long-term value?

Understanding the Nature of Your Loans

You mentioned a mix of home and education loan.
Both loans have different tax treatments.

Home loan: Offers principal and interest tax benefits.

Education loan: Offers deduction only on interest paid.

You need to assess interest rates too.

Is your loan above 9%? Then early repayment gives better returns.

Is it below 8%? Then investing longer term may offer better growth.

The answer depends not only on numbers. It depends on your emotional comfort too.

Build Emergency Fund First

Before increasing SIP or repaying more loan:

Keep at least 6 months of expenses in liquid mutual funds.

Include EMI amounts also in this.

This keeps you stress-free in job loss or health crisis.

Without emergency fund, even small issues can derail plans.

Don’t Increase SIP Now Without This Check

You already invest Rs.30,000 monthly.
That is 12% of your monthly income.
It’s a good start. But do you have clarity on your goals?

What are your major life goals in next 10-15 years?

Do you want to buy another house?

Will marriage expenses come up soon?

Any business plan in the future?

Unless you fix goal amounts, don’t blindly increase SIP.
Goal-based investing is always better.

Also, remember this—more investment only helps if you can continue long.
Else you will redeem midway, which harms compounding.

Why Early Loan Repayment Can Be a Strong Strategy

Let’s evaluate why repaying your loan early may help.

Reduces total interest outgo over time

Improves your monthly cash flow in future

Increases credit score quickly

Gives emotional freedom and peace

Allows you to take higher risks in future investments

At your age, being debt-free by 35 gives a huge head start.

Also, most education loans have floating rates.
If RBI increases rates, your EMI also increases.
Reducing principal quickly can protect you.

But Don’t Stop Mutual Fund SIPs Completely

Even if you prioritise loan repayment now:

Do not stop your current Rs.30,000 SIPs

It builds investment discipline and long-term wealth

Keeps you in the market to benefit from long-term compounding

This balance of repayment + investment gives a steady growth path.

How to Strike the Right Balance Now

Here is a smart and practical approach:

Keep Rs.30,000 SIP running every month

Review your EMI schedule—try to pay at least one extra EMI yearly

Any yearly bonus or incentive—use 50% to prepay loan

Rest 50% of bonus can be added to investment corpus

Every 12 months, re-evaluate income and loan balance

This way, you reduce loan burden over time while your investments keep growing.

Review Tax Impact Also While Choosing

Home loan principal under Rs.1.5 lakh is deductible under 80C

Interest up to Rs.2 lakh deductible under 24(b)

Education loan interest fully deductible under 80E

But tax benefit should not be the only reason to keep a loan.
If interest is higher than mutual fund returns, then prepaying is better.
Talk to a Certified Financial Planner to run the numbers yearly.

Avoid Index Funds—They Are Not For You

Some people suggest index funds blindly.
But they are not the best tool for wealth creation.

Here’s why:

Index funds only follow the market. No active thinking.

They never beat inflation consistently.

They fall with the market but don’t recover faster.

No fund manager to manage risk actively.

At your age, you need strong and flexible growth.
Only actively managed funds do that.
They have experts making timely decisions, which matters more during corrections.

Actively managed funds give more balanced returns.
Especially when markets are flat or volatile.

Avoid Direct Plans in Mutual Funds

Direct plans may look cheaper.
But they lack guidance and support.

At your age, mistakes cost more over time.
Wrong fund choice or bad asset mix can harm returns.

Regular plans through MFD with CFP help you:

Choose the right mix of funds for your goals

Track performance and rebalance regularly

Handle emotional mistakes in market crashes

Get expert help during any personal financial decision

The small difference in expense ratio is worth the guidance.

Focus On Financial Goals, Not Just Repayment

You are just 27. In the next 10 years, many financial needs will come.

Marriage

Home upgrade

Car

Travel

Retirement planning

Parents’ medical support

If you only focus on loan, you may miss out on these needs.
So create a life goal roadmap with help of Certified Financial Planner.
Then decide what amount to invest for each goal.

This gives clarity, confidence and control.

Plan Bonus, Incentives and Windfall Properly

Each time you receive a bonus:

Use 50% for prepaying loan

Use 25% for increasing goal-based investments

Use 25% for lifestyle or travel or hobby

This method balances progress and happiness.

Blindly prepaying everything is not wise.
Life must be lived too.

Key Points to Remember for Next 5 Years

Maintain current SIP at Rs.30,000 minimum.

Don’t take new loans unless emergency.

Increase loan repayment whenever you get extra money.

Avoid index funds. Choose active mutual funds with MFD support.

Don’t invest in direct plans. Regular funds with CFP help are better.

Keep financial goals clear and written down.

Review your plan every year with a Certified Financial Planner.

If You Have LIC or ULIP, Rethink Them Now

If you are holding LIC endowment or ULIP policy, check their returns.
If they give less than 6%, consider surrendering.
Reinvest that amount in mutual funds based on goals.
Keep insurance and investment separate.

Buy pure term cover for protection.
Use mutual funds for building wealth.

Finally

At 27, you are already doing many right things.
You are investing monthly. You are earning well. You care about your future.

Now the goal is to balance your priorities:

Reduce your loan over time

Keep long-term investments going

Plan goals early to avoid surprises

Avoid index and direct funds

Review with a Certified Financial Planner every year

This combined approach brings you peace of mind and wealth.

Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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Ramalingam

Ramalingam Kalirajan  |9453 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Asked by Anonymous - Jul 08, 2025Hindi
Money
Hi Sir, my income is 90k and I have a home loan of 28 lakhs which started 5 months back, tenure - 15 years, paying an emi of 29k per month and have a personal loan of 9 lakhs for tenure - 4 years, out of which 1 year is completed, paying an emi of 23k per month. 6k goes into my mutual funds and around 15k goes to my other expenses. If I want to clear my personal loan or home emi early than the tenure and save some amount for future. Please suggest me a way to do it. Thanks in advance.
Ans: You are already managing multiple financial responsibilities well.
Your focus on clearing loans and saving is a good mindset.
Let’s now build a 360-degree financial plan for you.

Knowing Your Current Financial Position
Monthly income: Rs 90,000

Home loan EMI: Rs 29,000

Personal loan EMI: Rs 23,000

Mutual fund SIP: Rs 6,000

Other expenses: Rs 15,000

Available monthly surplus: About Rs 17,000
This is a very crucial surplus.
It can be used to build a strong financial future.

Understanding Your Loan Structures
Personal Loan
Amount: Rs 9 lakhs

Tenure: 4 years

EMI: Rs 23,000

Paid: 1 year

Remaining: 3 years

High interest (usually 12–15%)

No tax benefit

Home Loan
Amount: Rs 28 lakhs

Tenure: 15 years

EMI: Rs 29,000

Started: 5 months ago

Lower interest (around 8.5%)

Has tax benefit

Personal loan is more expensive.
It also gives no tax savings.
So, your priority should be:
Clear personal loan first.

Step-by-Step Debt Strategy
Step 1: Create Loan Repayment Plan
Use Rs 15,000 from your monthly surplus

Save it monthly into a separate bank account

Don’t touch it for anything else

Every 6 months, use this to prepay personal loan

You can close this loan in 18–24 months

Step 2: Continue Home Loan EMI
Let the EMI continue as it is

Don’t prepay home loan right now

It gives you income tax savings

It has a longer, manageable tenure

Focus fully on personal loan for now

Step 3: Prepare an Emergency Fund
Currently, you don’t have emergency backup.
If any crisis happens, you may borrow again.
That will break your financial progress.

Action:

Once personal loan is over,
build Rs 2–3 lakhs as emergency fund

Use liquid mutual fund for this

Keep it separate from SIP or equity funds

Use Rs 10,000 per month to build this

This gives peace of mind for emergencies

Step 4: Mutual Fund Correction Plan
You invest Rs 6,000 monthly in mutual funds.
That is a very good start.

But mutual fund selection must be smart.
Avoid investing in index funds or ETFs.

Why Index Funds are risky:
They follow market blindly

No protection during market fall

No expert strategy or rebalancing

Returns match average market, not beat it

Why Regular Active Funds are better:
Managed by expert fund managers

Adjust portfolio during market risk

You get MFD + CFP support

Review and rebalance is easier

Helps create better long-term wealth

Action:

Shift to regular active equity mutual funds

Use large and mid-cap category

Use SIP route and continue for long term

Don’t stop SIPs when markets go down

Increase SIPs slowly once loans are closed

Step 5: What to do After Personal Loan Closure
After personal loan ends,
you will free up Rs 23,000 monthly.

This is a huge opportunity.
Use it wisely in this order:

Rs 10,000 to build emergency fund

Rs 10,000 increase to SIP amount

Rs 3,000 for any family buffer or medical

After 6 months of this,
you can start partial prepayment of home loan.

Use Rs 10,000 monthly to reduce home loan.
Once a year, make one extra EMI as part payment.

This will reduce total interest paid.
It will also cut loan tenure by 3–5 years.

Step 6: Handle Expenses Smartly
You spend Rs 15,000 monthly on lifestyle.
That is reasonable and under control.

But ensure you do this:

Avoid impulse online purchases

Don’t fall for lifestyle EMI schemes

Track every rupee spent using app or notebook

Avoid new credit cards or BNPL schemes

Keep credit card usage only for emergency

Don’t increase expenses just because salary increases

Step 7: Don’t Use Direct Mutual Funds
Some people invest in direct funds to save commission.
But they lose much more without expert support.

Disadvantages of direct funds:
No one helps to rebalance

No CFP to check goal mismatch

You might choose wrong scheme

No reminders or tracking help

High chances of panic redemption

Benefits of regular funds via MFD with CFP:
Professional help always available

Goal-based investing is easier

Portfolio is reviewed yearly

Mistakes are corrected early

Long-term growth is better

So avoid direct funds totally.

Step 8: Build Future Financial Strength
Once loans are gone and savings are strong:
You must create wealth for long term goals.

Goals like:

Child’s education

Health emergency

Retirement security

Travel or career break

Action Plan:

Increase SIPs every year by Rs 2,000

Use extra income or bonus to invest

Don’t redeem investments unless very urgent

Plan SIPs for minimum 10 years

Use only regular mutual funds

Track capital gains as per tax rules

Tax rules you must know:
Equity mutual fund LTCG above Rs 1.25 lakh taxed at 12.5%

Short-term gains taxed at 20%

Debt funds taxed as per income tax slab

So, hold funds for long term always

Step 9: Get Proper Insurance Protection
Loans are a risk if anything happens to you.
Ensure your family is protected.

Action Plan:

Buy pure term insurance of Rs 50 lakhs minimum

Premium is very low

Do not buy ULIP or return policies

Take health insurance of Rs 5–10 lakhs

Prefer floater plan for family

Buy policy separately from job policy

Step 10: Create a Personal Financial System
To make your money work for you:

Write your monthly budget

Write your EMI, SIP and expense dates

Create financial folder for documents

Check credit score once every year

Review SIPs once a year with MFD

Don’t discuss goals only in mind. Write them

This gives you full control.

Finally
You are already on the right path.
Just take the next few steps carefully.

First clear your personal loan.
Then build your emergency fund.
Shift to regular mutual funds with proper help.
Keep home loan EMI as it is for now.
Later, start reducing tenure slowly.

By following this system,
you will be loan-free and wealth-rich in few years.

You are doing well. Stay focused and consistent.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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Ramalingam

Ramalingam Kalirajan  |9453 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Money
I am 67 years retired with no liabilities. Both the children are well settled. My two SIPs @5000 each, for 5 years will mature in March 2026.How I can employ the maturity amount to increase my monthly income?
Ans: At 67 years, being debt-free and having settled children is wonderful. You also have two SIPs running for five years, maturing in March 2026. That shows disciplined planning. Now your focus is to use this maturity to increase monthly income. Let's understand the most efficient and structured way forward.

Understanding Your Current Financial Situation

Age: 67 years, fully retired.

Liabilities: None. Financially independent. That’s excellent.

Children: Well settled. No further responsibility.

SIPs: Two SIPs of Rs.5000 each, total Rs.10,000/month.

Investment Horizon: 5 years, maturing March 2026.

Objective: Generate steady monthly income after SIP maturity.

You have built your base. Now the goal is monthly stability. Let’s assess how to deploy this future corpus effectively.

Assessing Your Needs and Priorities First

Before investing the maturity, it’s important to assess the following:

Monthly expenses: What is your average monthly cost?

Medical expenses: How much is set aside for health needs?

Emergency fund: Do you have 6 to 12 months’ expenses kept safely?

Risk comfort: Are you okay with some market fluctuations?

Tax slab: Which tax bracket are you in?

These help choose the right investment for income. Not all options suit everyone. Your income plan should match your comfort and safety.

Estimate Your SIP Maturity Value

Each SIP is Rs.5000 for 5 years. So, total investment is Rs.6 lakhs.
Returns over 5 years may range from 8% to 12%, depending on fund performance.
So maturity could be between Rs.7.5 lakhs to Rs.8.25 lakhs.
This is a healthy lump sum to plan income generation.

What Should You Not Do With the Maturity?

Some people make common mistakes after maturity. Avoid these:

Do not keep the full money in savings account. Very low interest.

Avoid putting entire amount in fixed deposits. Not tax efficient.

Do not fall for annuity products. They are rigid and low-yielding.

Don’t invest in real estate for rental income. It needs maintenance and effort.

Avoid investing directly in stocks at this stage. Risk is high.

Also, do not go for index funds. They do not provide better risk-adjusted returns.
Index funds just copy the market. They lack smart strategy.
You need expert-managed active funds to ensure smart allocation.
They manage risk better and aim to beat inflation.

Choose Actively Managed Mutual Funds Only

Avoid index funds, as they offer only average performance.
You need consistent returns, not average returns.
Actively managed funds adjust according to market conditions.
They give potential for better returns even during volatility.
They also align better with income-generation strategy.

Avoid direct mutual fund plans. They look cheaper, but offer no guidance.
At this age, guidance is more important than cost saving.

Regular mutual funds through MFD with CFP support are better.
You get:

Personalised strategy based on your needs.

Ongoing monitoring and rebalancing.

Emotional support during market changes.

Better goal-based tracking.

Fees in regular plans ensure accountability and hand-holding.
Especially useful in post-retirement years.

How to Use the Maturity Corpus to Get Monthly Income

Once SIP matures in March 2026, follow this step-by-step method:

Step 1: Keep Emergency Fund Ready

Set aside Rs.1.5 lakh in liquid mutual fund or sweep FD.

It should cover 6 months' expenses.

Easy to withdraw. No penalties or charges.

Step 2: Invest in Hybrid Mutual Funds

Use a part of corpus in monthly income-type hybrid funds.

These funds have equity and debt mix.

They give regular dividend or SWP options.

Less risky than full equity. Better than FD returns.

Step 3: Start a SWP (Systematic Withdrawal Plan)

From April 2026, start monthly SWP.

Withdraw fixed amount every month from the invested fund.

SWP is more tax-efficient than FD interest.

Choose only after consulting a CFP to align with your tax bracket.

Step 4: Use Laddering Strategy for Debt Mutual Funds

Invest part of the corpus in 3-5 short term debt funds.

Set maturity at different intervals like 1 year, 2 years, 3 years.

Use each fund maturity to top-up your SWP or meet future expense.

This gives both income and liquidity.

Step 5: Reinvest Any Surplus

If your monthly income is more than enough, don’t keep surplus idle.

Reinvest in short term mutual funds or hybrid funds.

Let the unused money grow slowly.

Important Tax Rules You Must Know

As per new rules from April 2024:

Equity MF SWP:
Gains above Rs.1.25 lakh yearly are taxed at 12.5%.
If sold before 12 months, taxed at 20%.

Debt MF SWP:
Gains taxed as per your income tax slab. No LTCG benefit now.

So plan your SWP carefully.
Withdraw only the required amount monthly.
Take help from a Certified Financial Planner to manage tax outgo.

Diversify Your Income Sources

It’s best not to rely only on one income source.
Use multiple mutual fund types to spread the risk.

Hybrid Funds with SWP – for monthly cash flow.

Short Duration Funds – for near-term needs.

Liquid Funds – for emergencies.

Avoid annuities. They offer low return and no flexibility.
You lose control of your money once you invest.
Mutual funds offer better control, flexibility and liquidity.

Review Your Insurance Needs

Health insurance is vital at this age.
Make sure you have a personal health policy, not just corporate one.
Also check if any top-up plans are needed.
Keep all documents accessible to your children.

Do not hold LIC endowment or ULIP policies now.
If you have any, review returns.
If it gives less than 6% return, surrender it and shift to mutual funds.

Discuss With Your Family

Share your investment plan with your children.

Keep one nominee updated and trustworthy.

Maintain a list of investment documents and policy details.

Your income plan should work even in your absence.
Ensure family knows where and how to access it.

Financial Planning Should Be Ongoing

Even after retirement, planning is not over.
Every year review your income and expenses.
Rebalance portfolio with help of Certified Financial Planner.
This helps optimise returns and manage risk.

Also update your will if not done already.
Keep all instructions simple and documented.

Finally

You have done a great job by staying financially disciplined.
Now it’s time to use your maturity amount smartly.
Avoid locking full funds in rigid options like annuities or FDs.
Avoid real estate due to high effort and low income yield.
Don’t go for index funds or direct funds to save cost.
Instead, use hybrid and debt mutual funds with SWP.
Plan tax-friendly and flexible income with support of Certified Financial Planner.
Keep some funds for emergencies and medical needs.
Reinvest surplus so that your wealth keeps working for you.

This ensures monthly income with safety, growth, and peace of mind.

Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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Ramalingam

Ramalingam Kalirajan  |9453 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 2025

Asked by Anonymous - Jul 07, 2025Hindi
Money
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

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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