Hi , I'm 42 years employed in a private job. Monthly salary : 4.5 lacs (post tax), yearly Stocks allocation : 40 lacs ( post tax), bonus - 16 lacs post tax. Savings /investment rate : 1 lacs monthly towards mutual fund, 1 lac towards company stock ESPP, Bonus savings around 10 lacs, stock allocated annually - all saved ( 40 lacs). Yearly 1.5 lac each to myself and spouse account , 1.5 lacs SSY. Investment corpus so far : Mutual funds -90 lacs Equity - 80 lacs FDs - 1 cr Company stocks held ( vested post tax) - 60 lacs SGB - 16 lacs EPF corpus - 1.25 Cr PPF - 18 lacs Land - 80 lacs current value Goals : Buying a home (current value 2cr) Kids education ( current estimate 2cr) 7 yrs old kid need this inflation adjusted after 10 years Retirement corpus - 1.5 lac expense per month. How much I should save and build the corpus and how ?

Ans: You have done an excellent job with savings. At age 42, with consistent income and a disciplined habit, your financial life is already ahead of many. Now, the next step is to align everything with your life goals. Let’s assess and structure your plan from a 360-degree perspective.

Current Income and Savings Snapshot
Monthly post-tax salary: Rs. 4.5 lacs

Annual bonus (post-tax): Rs. 16 lacs

Annual stocks allocation (post-tax): Rs. 40 lacs

Monthly savings:

Rs. 1 lac in mutual funds

Rs. 1 lac in company ESPP

Bonus savings: Around Rs. 10 lacs yearly

Annual stock savings: Entire Rs. 40 lacs

Additional yearly savings:

Rs. 1.5 lacs in your PPF

Rs. 1.5 lacs in spouse’s PPF

Rs. 1.5 lacs in SSY

You are saving over Rs. 65–70 lacs every year. That’s an impressive commitment to your future.

Asset Allocation Overview
Mutual Funds: Rs. 90 lacs

Listed Equity: Rs. 80 lacs

Fixed Deposits: Rs. 1 crore

Company Stocks: Rs. 60 lacs

SGBs: Rs. 16 lacs

EPF: Rs. 1.25 crore

PPF: Rs. 18 lacs

Land: Rs. 80 lacs (not considered liquid for planning)

The total financial asset base (excluding land) is around Rs. 4.89 crore. Excellent progress.

Goal 1: Buying a House Worth Rs. 2 Crore
Assessment and suggestions:

You can buy the house without a loan by using part of current corpus.

However, don’t deplete all liquid assets at once. Keep Rs. 1 crore as reserve.

Use a mix of company stock sale and FDs. Avoid using mutual fund corpus.

Delay the purchase if possible, to avoid breaking FDs prematurely.

Buying should not delay kids’ education or retirement plan.

Recommended action:

Use Rs. 60 lacs from FDs

Use Rs. 60 lacs from company stock

Balance Rs. 80 lacs from stock allocation over next two years

Avoid touching mutual funds and EPF

This method keeps your long-term investment engine running.

Goal 2: Child’s Education – Rs. 2 Crore in 10 Years
Your child is 7 now. So, higher education will start at age 17.
You need Rs. 2 crore in future value. Assume this rises due to inflation.

Evaluation and strategy:

Continue monthly mutual fund SIP of Rs. 1 lac

Top-up SIP by 10–15% annually if possible

From bonus savings, allocate Rs. 5 lacs annually towards child goal

Avoid investing this amount in company stock

Why mutual funds?

Actively managed funds adjust to market cycles

Regular mutual fund investments through a Certified Financial Planner provide ongoing strategy

Mutual funds offer better goal tracking compared to direct stocks

Regular plan gives support and review; direct plans lack that

Why not index funds or direct funds?

Index funds follow the market. They don’t outperform in down cycles.

Direct funds don’t come with advisory or personalised strategy.

Regular plans help align your investment with your goal through expert CFP support.

Stick to regular plans advised by an MFD who also holds CFP certification.

Goal 3: Retirement – Rs. 1.5 Lacs Monthly Expense
You are 42 now. Assume retirement at 55. That gives 13 more years.
Post-retirement, you need Rs. 1.5 lacs monthly (inflation-adjusted).
You already have a strong foundation for this.

Retirement-focused allocation suggestions:

Continue EPF and PPF contributions

Keep SGBs till maturity for regular returns

Add to mutual funds regularly. SIP top-up yearly

Consider a separate SIP for retirement corpus of Rs. 50,000/month

Allocate Rs. 20 lacs annually from bonus and stocks into balanced funds

Why this strategy?

SIP builds wealth steadily and reduces risk

Balanced funds reduce volatility closer to retirement

Actively managed mutual funds adjust with market cycles

Regular review helps you stay on track

You already have Rs. 1.25 crore in EPF and Rs. 18 lacs in PPF. That’s a strong start.
Continue PPF contributions till 55. It gives tax-free interest and safety.

Risk Management – Insurance and Contingency
You didn’t mention insurance or emergency funds. Please evaluate this area seriously.

Suggestions:

Maintain emergency fund of Rs. 15–20 lacs in liquid funds or FDs

Term life insurance: Sum assured should be 10x of your annual income

Health insurance: Minimum Rs. 15 lacs family floater + employer policy

Add personal accident and critical illness cover

Even the best investment plans can get disturbed without these protections.

Portfolio Rebalancing and Tax Optimisation
Rebalancing tips:

Don’t hold excess in one asset. Limit company stock exposure to 10–15% of total.

Mutual funds and equities together should be 60–70% of your corpus.

FDs, PPF, EPF, SGB can be 30–40% for safety.

Tax efficiency guidance:

Mutual fund capital gains are taxed. Plan redemptions wisely.

Equity mutual fund LTCG above Rs. 1.25 lacs taxed at 12.5%

STCG taxed at 20%.

Debt mutual fund gains taxed as per your slab.

Use staggered withdrawals to reduce tax burden. Do not redeem large amounts at once.

Estate Planning
With a growing asset base, plan for asset transfer early.

Key steps:

Create a WILL mentioning all major assets and nominees

Assign nominees to all mutual fund folios and demat accounts

Consider a private family trust if asset base crosses Rs. 15 crore in future

Estate planning avoids confusion for your family later.

What You Should Do Yearly
Review goals every year with CFP

Increase SIP every year with salary hike

Track inflation impact on education and retirement goals

Reduce FD exposure slowly and invest more in balanced mutual funds

Keep land as legacy, not part of active planning

Trim company stock holding every year to control risk

Finally
You are on a great path. Your savings rate is strong. Your income is excellent.
Your awareness and discipline are already better than 90% of people.
But, the next phase needs clear focus. Protect your goals from market swings and risks.

With small adjustments, you can secure your child’s education and your retirement.
Do regular reviews. Keep rebalancing. Avoid overexposure to one asset type.
Stick to professionally managed investments through regular mutual funds advised by a CFP.
Avoid direct plans and index funds which lack active management and advice.

You don’t need new products. You need better structure and discipline.
And, every plan needs annual review and course correction. That keeps your plan relevant.

Keep up the discipline. Your future self will thank you for it.

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