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Ramalingam Kalirajan |10872 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 10, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Jul 01, 2025Hindi

Hi I am 30 years old, My salary is 1 lac and i have a savings of 80 lacs and i do have some properties which are in prime location. I dont have any loan, i have a daughter who is 3 years old and i am planning to retire by 45. How much corpus should i save by then

Ans: You are financially disciplined and planning early for retirement, which is truly commendable. Let’s evaluate your situation and answer how much retirement corpus you should target by age 45 from a 360-degree view.

? Your Present Financial Snapshot

– You are 30 years old now.
– You earn Rs 1 lakh monthly (Rs 12 lakh annually).
– You already have Rs 80 lakh in savings.
– You have real estate assets in prime locations.
– You have no existing loans or EMIs.
– You have a 3-year-old daughter.
– You plan to retire by age 45, i.e., in 15 years.

This gives you a solid foundation. Let us now assess from multiple angles.

? What Is the Retirement Corpus Needed?

– You will likely live 40+ years post-retirement.
– So, corpus should last from 45 to around 85–90 years.
– You will stop earning at 45 but keep spending.
– Inflation will keep increasing your monthly expenses.
– Assuming you need Rs 60,000–80,000 monthly after 45,
– In 15 years, this will become around Rs 1.6–1.9 lakh monthly due to inflation.
– This means you may need Rs 20–24 lakh every year in retirement.
– Over 35 years post-retirement, this adds up to a large amount.
– So, your required retirement corpus should be around Rs 5–6 crore.

The figure may go higher depending on lifestyle, goals, and inflation.

? Why You Must Consider Child’s Education and Marriage Separately

– Your daughter is 3 now. She’ll need college funds at age 17–18.
– That is about 14–15 years from now.
– By that time, higher education may cost Rs 30–40 lakh.
– Marriage cost can also go up to Rs 20 lakh or more later.
– You should plan at least Rs 50–60 lakh for your daughter’s goals separately.
– Do not mix this with your retirement corpus.
– Retirement fund is for your monthly needs, not her future expenses.

? Where You Stand Today

– Rs 80 lakh corpus at age 30 is excellent.
– If you invest it wisely, it can grow rapidly in 15 years.
– You still have 15 earning years left.
– If you save Rs 30,000–40,000 monthly from now,
– And increase this SIP every year by 10%,
– You can reach the Rs 5–6 crore mark by 45.
– But this needs careful asset allocation and investment planning.

? Asset Allocation for Long-Term Growth

– Avoid keeping large funds in fixed deposits for 15-year goals.
– Inflation will erode value of your money in FDs.
– Invest majority in equity mutual funds through a Certified Financial Planner.
– Choose regular plans for expert guidance and portfolio review.
– Direct funds may look cheaper, but they lack advice and behaviour control.
– For goals like retirement, staying invested and guided is key.

Suggested Allocation:

– 70–75% in equity mutual funds
– 10–15% in hybrid or flexi-cap funds
– 10–15% in safer debt/liquid funds

– Review every 6–12 months with your MFD or planner.
– Increase SIPs as income grows.
– Avoid schemes like endowment or ULIP for wealth building.

? Importance of Emergency and Goal-Specific Funds

– Keep at least Rs 5–6 lakh in liquid funds for emergencies.
– Allocate a separate Rs 20 lakh from your Rs 80 lakh savings
– Toward your daughter’s education goal
– Invest this in a mix of hybrid and equity mutual funds.
– Review allocation every 3 years based on her age and cost projection.

? Why Not Depend on Real Estate

– You have properties in prime location. That’s an asset.
– But don’t count on it for monthly retirement needs.
– Property sale can be uncertain, delayed or taxed heavily.
– Rental income may not be stable or enough for expenses.
– Liquid, planned investments are better for steady post-retirement income.
– Keep property as backup or use only part of it later for corpus support.

? Risk to Consider Before Retiring at 45

– No employer-provided health insurance after 45.
– You must get separate health coverage for family.
– Health costs rise sharply with age.
– Buy a good Rs 15–25 lakh family floater health plan.
– Also buy term insurance to protect your family till retirement.
– Medical emergencies can eat into retirement corpus otherwise.

? Post-Retirement Cash Flow Planning

– From age 45, you’ll start withdrawing from your investments.
– You can use Systematic Withdrawal Plans (SWP) from mutual funds.
– This gives monthly income, while rest of corpus keeps growing.
– Equity mutual fund LTCG above Rs 1.25 lakh is taxed at 12.5%.
– STCG is taxed at 20%. So, SWP must be tax-efficient.
– Debt mutual fund gains are taxed as per your slab.
– A planner can help create a withdrawal strategy to reduce tax and preserve capital.

? Practical Steps for Next 5 Years

– Create 3 separate buckets:

Retirement corpus goal

Daughter’s education & marriage goal

Emergency + insurance needs

– Start SIPs in mutual funds with goal mapping.
– Increase SIPs every year as salary increases.
– Review your portfolio once every 6 months.
– Stay invested for at least 10–15 years in equity.
– Don’t withdraw in between unless truly needed.
– Avoid real estate as your retirement support system.
– Real estate should be treated as legacy or emergency backup.

? Don’t Make These Mistakes

– Avoid leaving your Rs 80 lakh idle or in savings accounts.
– Avoid locking funds in traditional policies or insurance-cum-investment plans.
– Avoid depending fully on rental income post-retirement.
– Avoid delaying mutual fund investments waiting for “right time.”
– Avoid direct funds unless you’re trained in financial discipline.
– Avoid under-insuring health or skipping term insurance.

? Final Insights

– You’re ahead of most people your age in terms of savings.
– But early retirement needs more careful planning.
– Your target should be Rs 5–6 crore by age 45 for retirement only.
– Plus Rs 50–60 lakh for daughter’s goals.
– Use mutual funds via Certified Financial Planner to get there.
– Keep Rs 5–6 lakh as emergency fund in liquid investments.
– Review regularly, increase savings, and stay invested long term.
– With this discipline, you can achieve a safe and peaceful early retirement.

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

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