I am 34 and earning 1.3 lac can you please help me how to save so that i can happily retire

Ans: hi.. Without evaluating your financial health, I will not able to give you a concrete answer to this question. I can suggest you can allocate a specific amount tagged to your retirement goal alone.

Ans: – You have built a very strong foundation already.
– Rs.65 lakh in stocks and Rs.40 lakh in mutual funds is solid.
– Rs.15 lakh in Sukanya for your child is thoughtful.
– Consistent investment of Rs.1.5 lakh monthly is excellent discipline.
– Planning retirement at 53-54 shows foresight and ambition.

» Understanding Your Goals
– You want Rs.1.5 lakh monthly after retirement.
– You also want to keep money aside for your child’s higher education.
– Retirement is only 5-6 years away, so planning has to be careful.
– Wealth should not only provide income but also beat inflation.
– Both short-term liquidity and long-term growth are important.

» Current Portfolio Snapshot
– Equity shares: Rs.65 lakh. Growth potential, but very volatile.
– Mutual funds: Rs.40 lakh. Balanced exposure to managed growth.
– Sukanya Samriddhi: Rs.15 lakh. Safe but locked till maturity.
– LIC and child insurance: Rs.20 lakh. Returns low, mixing insurance with investment.
– SIP: Rs.50,000 equity, Rs.1 lakh mutual funds every month.

» Issues in Current Allocation
– Too much exposure in direct stocks may increase risk.
– Sukanya is safe but rigid, cannot support retirement income soon.
– LIC and child insurance have low returns and less transparency.
– Insurance should be separate from investments.
– High retirement corpus demand needs better tax efficiency.

» Step to Optimise LIC and Child Insurance
– Your LIC and child policies are locking money in low returns.
– These products neither provide adequate life cover nor wealth growth.
– Better to surrender and reinvest in mutual funds.
– With professional guidance, this can grow faster and safer.
– Separate term insurance should cover life protection.

» Role of Active Mutual Funds
– For your retirement goal, active mutual funds are best suited.
– Index funds look simple, but they carry hidden risks.
– They cannot exit weak companies from index.
– They mirror market falls without protection.
– Active funds adjust allocation to generate better returns.
– Expert management is critical when timeline is short like 5-6 years.

» Regular Funds vs Direct Funds
– Direct funds may look cheaper, but lack of guidance is costly.
– Investors often mismanage allocation in direct funds.
– Regular funds through Certified Financial Planner ensure ongoing monitoring.
– You get review, rebalancing, and clarity on withdrawal strategy.
– This support is more valuable than small cost savings.

» Planning for Child’s Education
– Sukanya already ensures some part of education funding.
– Additional funds can be created through targeted mutual fund portfolio.
– Keep child’s education corpus separate from retirement corpus.
– This prevents confusion and misuse during retirement.
– Allocate a portion of monthly SIP towards child education goal.

» Building Retirement Corpus in 5-6 Years
– Present corpus is already more than Rs.1.2 crore.
– Monthly SIP of Rs.1.5 lakh adds another Rs.1 crore approx in 5-6 years.
– With proper reallocation, corpus can comfortably cross Rs.3 crore.
– This is enough to generate Rs.1.5 lakh monthly income.
– But allocation must balance growth and safety over next years.

» Income Planning After Retirement
– Target is Rs.18 lakh per year income after retirement.
– To ensure stability, use bucket approach.
– First bucket: keep 5 years of income in safer debt-oriented funds.
– Second bucket: balanced and hybrid funds for next 10 years.
– Third bucket: equity mutual funds for long-term growth.
– Withdraw income systematically from first bucket.
– Refill buckets by shifting matured growth from long-term.

» Taxation Impact
– FD interest and insurance maturity are fully taxable.
– Mutual funds offer better tax advantage.
– For equity mutual funds, LTCG above Rs.1.25 lakh taxed at 12.5%.
– STCG taxed at 20%.
– Debt fund gains taxed as per your slab.
– With systematic withdrawals, tax liability can be managed smartly.

» Inflation and Longevity Risk
– Rs.1.5 lakh per month today may not be enough in 15 years.
– Inflation will slowly erode purchasing power.
– Equity allocation must continue even after retirement.
– This ensures growth along with income.
– Balancing risk and reward is the secret of sustainable retirement.

» Health and Family Security
– Ensure you and wife have strong health insurance.
– Medical costs can derail retirement income.
– Take adequate term insurance till child becomes independent.
– Avoid mixing insurance with investments further.
– Focus on pure protection and pure investments separately.

» Emotional Discipline
– Retiring at 53-54 means long years without salary income.
– Market fluctuations can trigger fear.
– Don’t stop SIP during corrections.
– Don’t withdraw in panic from equity funds.
– A disciplined and guided approach ensures peace of mind.

» Role of Certified Financial Planner
– You need 360-degree management for retirement and education goals.
– A Certified Financial Planner helps in allocation, tax, risk and withdrawals.
– Regular funds through MFD channel ensure monitoring and advice.
– This professional partnership is critical for goals as big as retirement.

» Finally
– You have already achieved a lot with discipline.
– Retirement at 53-54 with Rs.1.5 lakh monthly income is possible.
– With proper reallocation and steady SIP, corpus will be adequate.
– LIC and child insurance must be surrendered and shifted to funds.
– Child education needs separate dedicated corpus.
– Tax efficiency, risk balance and inflation protection are essential.
– Professional guidance with discipline will secure both your retirement and child’s future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

Ans: Hi,

Your overall expenses are very much in control but your savings are negligible of what you earn.
Total current expenses account to maximum of 1.5 lakhs in your case. And you can judiciously invest the remaining 50000 per month to fund your retirement.

- Make sure to have 5 lakhs of emergency parked in liquid funds.
- Have sufficient life and health insurance in place for youa nd family.
- Start SIP of 15k per month in liquid and debt fund to park your emergency fund. Do this for 3 to 4 years.
- Invest remaining 35k (left after your monthly expenses of 1.5 lakh) in equity oriented mutual funds. Step-up this by 10% each year. You will get 12 crores at the age of 60 which will fund your retirement (inflation adjusted).

Do mention if you have any other goal which you need to consider.

You can consult a professional Certified Financial Planner - a CFP who can guide you with exact funds to invest in keeping in mind your age, exact rquirements and risk profile.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/