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Ramalingam Kalirajan |10870 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 11, 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 Khush on Sep 01, 2025Hindi

I am 32 years old. I have corpus of 14 lakh in nps, 4.2 lakh in multiple etfs like Nifty bees, gold bees,mon 100,cpse etf, nifty next 50 ,it bees and investing around 2000 rs per day depending on the market state. Also started mutual fund sip of 2500 rs per month in three mutual fund 1000 rs in nippon india small cap direct fund growth, 500 in midcap fund direct growth and 1000 in icici prudential technology direct fund growth. Al so have ppf of 2.4 lakh . I want to retire at the age of 45 and need monthly income of 1.5 lakh .kindly guide how to achieve it

Ans: – You are only 32 and already saving across many products.
– Building Rs.14 lakh in NPS and Rs.4.2 lakh in ETFs shows discipline.
– Your SIPs in equity funds and PPF contribution reflect good saving habits.
– Thinking of retiring at 45 shows foresight and ambition.

» Understanding your retirement dream
– You want to retire in 13 years, at age 45.
– You need Rs.1.5 lakh per month income in retirement.
– Retirement could last 40–45 years after age 45.
– This is a very long horizon with heavy financial demand.

» Gap between goal and present corpus
– Your present wealth is small compared to the target.
– NPS Rs.14 lakh, ETFs Rs.4.2 lakh, PPF Rs.2.4 lakh, MFs Rs.45,000.
– Total around Rs.21 lakh corpus.
– For Rs.1.5 lakh monthly income, you will need very large corpus.
– That corpus can be around Rs.7–9 crore by age 45.
– This is due to inflation, rising costs, and long retirement period.

» Challenges with your current investments
– Daily ETF investments based on market state is risky.
– It may lead to emotional timing errors.
– ETFs are passive and copy an index, with no active management.
– Index style cannot protect during market crashes.
– Passive investing may underperform in volatile Indian markets.
– Actively managed funds give better chance of wealth creation.

» Issue with direct mutual funds
– You are using direct mutual fund mode.
– Direct funds do not provide professional review or handholding.
– Wrong scheme choice can reduce wealth creation.
– Emotional reactions may push you to exit in bad times.
– Regular plans with a Certified Financial Planner give discipline.
– CFP ensures rebalancing, proper allocation, and risk checks.

» Weakness in current allocation
– Too much focus on ETFs and small SIPs in mutual funds.
– Portfolio is tilted towards passive products.
– Technology fund is sector-specific, hence risky if sector slows.
– Small cap and mid cap give growth but also high volatility.
– Debt exposure through PPF is very low.
– Proper balance between equity, debt and gold is missing.

» Need for aggressive saving
– Rs.2000 per day investment is Rs.60,000 per month.
– SIP Rs.2,500 per month is small compared to goal.
– Total investment is less than 30% of your income (assumption).
– To reach Rs.7–9 crore, monthly investments must be much higher.
– You may need to save Rs.1–1.2 lakh per month consistently.

» Role of NPS in your plan
– NPS is already Rs.14 lakh, and it grows steadily.
– But NPS forces annuity at withdrawal, which limits flexibility.
– Annuities give low returns and no inflation protection.
– So, NPS should not be your only retirement base.
– Use it as one component, but build parallel corpus in mutual funds.

» How mutual funds can help
– Equity mutual funds give long-term growth, better than ETFs.
– Actively managed diversified funds adjust to market cycles.
– They protect downside better than passive ETFs.
– Debt mutual funds can provide stability after 45.
– Systematic allocation across equity and debt is needed.

» Importance of increasing SIPs
– Rs.2,500 SIP is very low.
– Your goal requires aggressive scaling of SIPs.
– Increase SIPs every year in line with income hikes.
– Make SIP the backbone of your wealth building, not ETFs.
– Stick to actively managed funds in regular plan mode.

» Rebalancing equity and debt
– For next 10 years, higher equity allocation is fine.
– Slowly add debt allocation as you near 45.
– This reduces risk of market fall before retirement.
– Maintain 65–70% equity and 30–35% debt balance in long term.

» Role of gold in your plan
– ETFs in gold are small, which is okay.
– Gold should be less than 10% of portfolio.
– It works as hedge, not wealth creator.
– Do not increase allocation beyond this.

» Insurance and protection needs
– Retirement planning fails if protection is missing.
– Ensure adequate term insurance to protect family.
– Ensure health insurance to cover medical costs.
– These reduce risk of dipping into investments for emergencies.

» Emergency fund
– Keep at least 6 months’ expenses in liquid funds.
– Avoid depending only on ETFs and equities for emergencies.
– This prevents forced selling in market downturns.

» Withdrawal strategy after 45
– If you retire at 45, income must last for 40 years.
– You cannot rely only on NPS annuity, it is rigid.
– You cannot depend fully on ETFs, they lack flexibility.
– Best way is Systematic Withdrawal Plans from mutual funds.
– Keep 2–3 years’ expenses in debt for safety.
– Rest in equity for growth and inflation protection.

» Tax aspects to consider
– Equity mutual funds: LTCG above Rs.1.25 lakh taxed at 12.5%.
– STCG in equity taxed at 20%.
– Debt fund gains taxed as per income slab.
– Planning withdrawals with tax efficiency will matter.
– CFP guidance will help reduce tax impact.

» Realistic expectation about retirement at 45
– Current savings pace is not enough for Rs.1.5 lakh monthly.
– You must sharply increase SIPs and reduce ETF focus.
– Even then, reaching Rs.7–9 crore in 13 years is challenging.
– Consider retiring later at 50 if savings pace cannot increase.
– Early retirement at 45 is possible only with extreme discipline.

» Finally
– You are off to a strong start at 32.
– Current corpus is too small for Rs.1.5 lakh monthly income at 45.
– You may need Rs.7–9 crore corpus for safe retirement.
– Increase SIP sharply, shift focus from ETFs and direct funds.
– Use actively managed regular plans with CFP guidance.
– Build equity for growth, debt for stability, gold as hedge.
– Secure insurance and emergency fund for protection.
– With high discipline, early retirement is possible.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

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