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Ramalingam Kalirajan |9751 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jun 21, 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

Question by Mani on Jun 16, 2025Hindi

I am 31 year, single child family, unmarried and plan to lead celibacy, employed in MNC, getting a passive income of Rs.3 lac post TDS pa other than salary - having 50L corpus in equity mutual fund with 50 L health insurance and 1.5 Cr in Term plan - life insurance and premia will be taken care by TDS refund. along side, family share of Rs.1 Cr. like to get in about 5 years or less. I am disciplined minimalist and no medical expenses or badhabits. Now the question is, Since I am depending on anyone or any one is depending on me, I am planning to get retired from MNC organisation volutarily, and join in organisation for volunteering, I understand that I will get pocket money for expenses and no salary. with minimalistic lifestyle and okay to be comfortable with the passive income. Can I get retired and give up the job and join in social organisation for moral support or just retired as I am neither dependant nor any one depending on me. veterans please advise.

Ans: Your clarity, discipline, and values shine through. Having clear passive income, strong insurance cover, and family wealth ready in five years gives you unique flexibility and freedom. You deserve appreciation for managing your finances so well and aligning them with your life philosophy. Now let’s explore your plan and help you assess whether voluntary retirement for involvement in social work aligns with your goals from a 360-degree perspective.

Financial Independence Framework
Your current passive income is Rs. 3 lakh per annum post-TDS.

You hold Rs. 50 lakh in equity mutual funds.

Health insurance covers up to Rs. 50 lakh.

Term life insurance coverage is Rs. 1.5 crore.

Family’s share of Rs. 1 crore is expected in five years.

Your lifestyle is minimalist with negligible medical or personal expenses.

You have no dependents and no liabilities.

You’ve built a strong foundation for financial independence. All essentials—investment, protection, and future lump sum—are aligned well. This gives you the freedom to choose how to live and work.

Passive Income and Corpus Sufficiency
Passive income of Rs. 3 lakh per year is modest but consistent.

You can supplement this with systematic withdrawals from equity corpus.

With Rs. 50 lakh in equity, a 4–5% withdrawal rate could yield Rs. 2–2.5 lakh per year.

Together with Rs. 3 lakh passive, annual income could be Rs. 5–5.5 lakh.

That supports a minimalist lifestyle comfortably.

Post receipt of family share, investing Rs. 1 crore could generate an additional Rs. 4–5 lakh passive. Over time, that could lead to Rs. 10 lakh passive per year without salary—quite sufficient.

Equity Corpus Growth and Tax Efficiency
Your equity corpus of Rs. 50 lakh likely receives long-term capital gain.

Capital gains above Rs. 1.25 lakh per year are taxable at 12.5%.

Plan withdrawals to optimise gains each tax year.

Equity mutual funds offer potential growth, but with volatility.

If you sustain or slightly increase the equity portfolio, it should grow well in the next 5 years. That enables future withdrawals while keeping corpus intact.

Active vs Passive Fund Philosophy
You currently hold equity mutual funds (presumably actively managed).

Actively managed funds typically adjust allocations to protect in down-cycles.

Index funds merely reflect market performance without downside defence.

Passive index funds lack active rebalancing and selection.

Continue with active funds via regular plans and CFP guidance.

Avoid direct plans that don’t provide ongoing strategic input.

Goal: Voluntary Retirement Consideration
You wish to leave formal employment and join a social organisation on a volunteering basis.

Your goal is minimal income to meet personal expenses without financial pressure.

Since you are self-reliant and others aren’t depending on you, optional retirement becomes viable.

Before retiring, ensure your passive income and corpus can sustain expenses long-term.

Plan scenarios for unexpected expenses, inflation, changes in health, or global shocks.

Income Planning Post-Employment
Consider structuring a sustainable withdrawal strategy:

Use systematic withdrawal plans (SWP) from equity to supplement passive income.

For example, withdraw a fixed amount monthly or quarterly from your mutual funds.

This additional draw increases cash flow without full dependence on capital.

Once family share arrives and invests, you can reduce withdrawals and let corpus grow.

Health and Protection Review
Even with good insurance in place:

Ensure your health policy renews smoothly post-employment.

Employer-provided group health may end after resignation.

You will need a personal health floater policy.

Make sure it includes adequate coverage for age and risk factors.

Life insurance remains important even if no dependents. It protects any estate you leave and supports your minimalist lifestyle regardless.

Lifestyle and Spending Control
Your disciplined, minimal lifestyle reduces pressure on corpus.

But account for inflation and one-time large expenses (e.g. travel, health care).

Set a budget aligned with your values and ensure withdrawals don’t exceed it.

If you expect more expenses in future (volunteering costs, travel), factor them in.

Scenario: Withdrawing Pre-Family Share
Immediately after retirement, your active corpus remains Rs. 50 lakh plus passive receipts.

Without the Rs. 1 crore family share, your annual income may be Rs. 5–6 lakh.

You must ensure your expected expenses match or fall below this.

If expenses exceed income, continue employment until lump sum arrives.

Scenario: After Receiving Family Share
Once Rs. 1 crore is obtained in five years, invest this in equity, debt, or hybrid funds under CFP guidance.

Assuming a 5% yield, this investment can generate Rs. 5 lakh passive per year.

Together with existing income, you may earn Rs. 10–11 lakh per year passively.

This comfortably supports your minimalist lifestyle and allows flexibility for extractions.

Investment Allocation for Family Share
Post-receipt of Rs. 1 crore:

A conservative allocation mix could be 60:40 equity to hybrid/debt.

That balances potential growth with income stability.

Actively managed funds remain recommended to ensure oversight and regular performance reviews.

You may consider hybrid funds or balanced funds to produce steady returns for withdrawals.

Withdrawal Strategy and Tax Planning
Initiate SWP from mutual funds—balanced across equity and hybrid to smooth returns.

Withdraw amounts aligned with yearly personal expense estimates.

Taxation on equity portfolio: LTCG above Rs. 1.25 lakh taxed at 12.5%; STCG at 20%.

Plan withdrawals across financial years to optimise tax and maintain corpus.

Longevity and Inflation Risk
At age 31, your planning horizon extends 40–50 years.

Inflation will erode income value over decades.

Continue small withdrawals and reinvest part of corpus to beat inflation.

Keep some growth-oriented assets to offset inflation.

Maintain a mix of equity and hybrid assets to balance growth and income.

Advisory Support and Portfolio Monitoring
Working with a Certified Financial Planner will help maintain strategy focus.

Your CFP can guide:

Asset allocation adjustment based on lifecycle and inflation.

SWP establishment aligned with spending needs.

Insurance and asset protection.

Tax-savvy withdrawal planning.

Annual review prevents drift and ensures long-term viability.

Voluntary Retirement & Personal Fulfilment
Financially, retiring early is feasible with your structure.

You can live comfortably on Rs. 10 lakh passive income per year post-lump sum.

Volunteering offers purpose and fulfillment.

Lessen work stress and build emotional satisfaction through service.

But ensure financial resilience before quitting salaried job.

Contingency and Flexibility Planning
Keep some equity investments untouched as a fallback reserve.

Maintain health and income coverage for emergencies.

Explore part-time consultancy or freelance work if needed.

Staying partially active provides contingency and social connection.

Final Insights
You have excellent financial independence potential already.

Align investment growth, income generation, and risk protection strategically.

Wait for the family share and invest it thoughtfully with your CFP.

Plan SWP and align withdrawal with expenses.

Confirm health insurance and emergency strategy before retirement.

Voluntary retirement can work if income matches needs.

Passion and purpose aligned with financial stability offer a fulfilling next phase.

You are well positioned. With thoughtful planning and professional support, you can live your values and sustain your lifestyle without salary. This is a life aligned with purpose, resilience, and mindfulness.

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

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