Hello Sir,
I am 42 year old , have parents, wife and 2 daughter.
monthly take home is 2.25 lakh, current savings are-
1- MF - 25lakh
2- PPF- 8 lakh
3- stocks 80k
4- NPS- 1 lakh
5- PF - 24 lakh
6- Sukankya Samridhi - 1 lakh
have a house loan of 36lakh, give EMI of 50k per month.
I am planning for retirement by 50 years. any suggestion for any fix on current investment.
I am single earner in my family, any suggestion on my current investment to make it better.
Ans: You are 42 years old with a solid monthly income of Rs. 2.25 lakh. You are managing family responsibilities for wife, two daughters, and parents. You are also repaying a home loan with Rs. 50,000 EMI monthly. You have already built up a strong savings base, which shows discipline. You plan to retire at 50. That gives you only 8 years. This is an ambitious goal. But with the right approach, it's possible.
Let us now go step by step to assess and improve your current investments. This will be a full-circle view covering risk, returns, liquidity, taxes, and future goals.
Your Current Investment Snapshot
From what you’ve shared, your assets are spread across:
Mutual Funds: Rs. 25 lakh
PPF: Rs. 8 lakh
Stocks: Rs. 80,000
NPS: Rs. 1 lakh
EPF: Rs. 24 lakh
Sukanya Samriddhi: Rs. 1 lakh
House Loan: Rs. 36 lakh (EMI Rs. 50,000 per month)
This is a very good base to start with. There is growth, safety, and diversification. But you also have responsibility as a single earner. Let us now do a 360-degree assessment.
Family Protection First
Since you are the only earner, protection is very important.
Suggestions:
Term insurance should be at least 15 times your yearly income.
In your case, it should be around Rs. 4 crore or more.
Don’t mix investment with insurance.
Avoid ULIPs or traditional endowment plans.
Surrender such policies if already taken. Reinvest in mutual funds.
Health insurance:
Ensure your entire family is covered.
Buy a family floater plan with Rs. 10 lakh cover or more.
Also buy personal accident cover.
Add critical illness policy for long-term protection.
This protection is needed to secure your savings from any health shocks.
Understanding Your Retirement Goal at 50
You have just 8 years left for retirement.
That means:
You have to build a retirement corpus fast.
You need to cover expenses for 30+ years post retirement.
Medical inflation and daily expenses will rise.
Your current retirement assets:
PF + NPS = Rs. 25 lakh
Mutual Funds: Rs. 25 lakh
PPF (part can be used)
Stocks, Sukanya and home equity are not ideal for retirement
Your home is not an investment unless sold. EMI is a cash outflow.
So, retirement corpus must come mainly from mutual funds, EPF, and NPS.
Mutual Fund Investments – Review Needed
You have Rs. 25 lakh in mutual funds.
Suggestions:
Review fund selection carefully.
Are they active funds or index funds?
Don’t go for index funds. They follow the market blindly.
Actively managed funds adjust based on market cycles.
That gives better protection in falling markets.
If you are using direct funds:
It may save cost, but it gives no guidance.
Wrong fund selection will cost more than saved expense.
Always go for regular plans via Mutual Fund Distributor with CFP credential.
You get professional support, handholding, reviews, and behaviour coaching.
This service is valuable, especially near retirement.
Monthly Investment Strategy
After paying Rs. 50,000 EMI, you still have Rs. 1.75 lakh.
Let us plan your monthly surplus wisely.
Suggestions:
Keep Rs. 20,000 for monthly emergency fund top-up.
Allocate Rs. 80,000 into mutual fund SIPs.
Invest another Rs. 25,000 in NPS Tier I for tax saving and retirement.
Use Rs. 30,000 to prepay part of the home loan (optional).
Rest can be kept for family needs and flexible savings.
Your SIP should include:
Large-cap actively managed fund
Flexi-cap fund
Hybrid aggressive fund
Balanced advantage fund
Each fund should match your risk profile and goal duration.
Debt Instruments Review
You have:
EPF – Rs. 24 lakh
PPF – Rs. 8 lakh
Sukanya Samriddhi – Rs. 1 lakh
NPS – Rs. 1 lakh
Analysis:
EPF and PPF are safe, long-term, and tax-free.
They offer low but guaranteed growth.
Don’t invest more into PPF now. Returns are slow.
Instead, increase NPS contribution for tax benefit and retirement.
For daughters:
Sukanya Samriddhi is good. Continue yearly contribution.
Don't go overboard. Fund their education through mutual funds also.
Equity Stocks – Handle with Caution
You hold Rs. 80,000 in direct stocks.
Suggestions:
Keep direct stocks only if you have time and knowledge.
Otherwise, shift funds to equity mutual funds.
Let experts manage stocks through mutual funds.
Don’t depend on stock tips or social media suggestions. Stay focused on long-term wealth building.
Home Loan Strategy
Your outstanding loan is Rs. 36 lakh. EMI is Rs. 50,000.
Suggestions:
Don't rush to close the loan unless you are nearing retirement.
Interest rates are now moderate.
Prepay small amounts yearly if you have excess cash.
But don’t compromise retirement corpus to close the loan early.
It’s better to invest and earn 11-12% than save 8% on loan interest.
Retirement Income Strategy
From age 50, your income will stop. Your savings must generate monthly income.
Suggestions:
Shift mutual fund investments slowly to balanced or hybrid funds.
Use Systematic Withdrawal Plan (SWP) from mutual funds.
Avoid annuities. Returns are poor, and capital is locked.
Keep 3 years’ worth expenses in safe liquid mutual funds.
Don’t rely only on pension. Mix growth and income wisely.
Build a portfolio that can support you till 85-90 years.
Emergency and Liquidity Planning
As single earner, emergency fund is important.
Suggestions:
Keep 6 to 9 months of expenses in liquid mutual funds.
Don’t lock all money in long-term options.
Have a separate account for emergency cash.
Update all nominations. Keep documents handy.
Tax Efficiency Strategy
You are in the highest income tax slab.
Suggestions:
Use Section 80C through EPF, NPS, Sukanya, and ELSS.
Invest in NPS for Section 80CCD(1B) extra benefit.
Use mutual funds wisely to avoid unnecessary taxes.
Sell equity mutual funds after 1 year. LTCG above Rs. 1.25 lakh taxed at 12.5%.
Avoid short-term gains. They are taxed at 20%.
Mutual funds give flexibility. But use them smartly.
Goal-Based Investing for Daughters
Education and marriage are two important goals.
Suggestions:
Open separate SIPs for education and marriage goals.
Use aggressive hybrid or flexi-cap funds for education.
Use multi-cap and balanced funds for marriage.
Shift to debt funds slowly as the goal comes near.
Keep goals separate. Don’t mix them.
Review and Rebalancing
You must not ignore this step.
Suggestions:
Do yearly review with a Certified Financial Planner.
Check if asset allocation is as per goal timeline.
Shift from equity to debt slowly near goal years.
Don’t invest emotionally or by watching the market.
Stick to your plan. Avoid over-trading.
Final Insights
You are in a strong position. Income is good. Investments are spread well.
You have clear goals. You are serious about retirement. That’s a very positive sign.
But you need to act now. Because time is short. You want to retire in 8 years.
Start monthly SIPs in right mix of mutual funds. Use regular plans with CFP-backed distributor support.
Avoid index funds. They are passive. No decision-making during market changes.
Avoid direct plans. No guidance leads to wrong fund selection. That spoils the outcome.
Review your portfolio yearly. Rebalance as needed. Don’t let emotions decide investments.
Keep protection strong. Life and health insurance must be updated.
Separate your goals. One fund, one goal strategy works better.
Keep investing. Stay disciplined. And stay focused on your end goal – peaceful and early retirement.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment