Hi sir I am 34 years old and working as a software engineer with a monthly take home salary of 2 lakhs. I am married with no children and my wife works in a PSU bank. I have no major financial responsibilities right now. My investments include 20 lakhs in fixed deposits, 5 lakhs in mutual funds with 30 thousand monthly SIP, 10 lakhs in EPF, 2 lakhs in NPS, 5 lakhs in savings, and a Tata AIA life insurance policy with 1 lakh premium for 6 years giving 2 lakhs annually after maturity and 12 lakhs life cover. Our monthly expenses are between 30 to 50 thousand and we spend around 5 lakhs a year on travel. I plan to buy a flat under 80 lakhs for rental income and can use loan benefits through my wifes PSU job. My goal is to retire by 45 with enough savings to live peacefully and I am looking for advice on how to plan my finances to achieve this.

Ans: You are 34 years old with solid income, disciplined habits, and clear goals. Very few maintain such clarity early in life. Your dream of retiring by 45 is possible. But it needs structured financial planning and full commitment. Let us now look at your profile and create a 360-degree financial roadmap.

Your Current Financial Position
Salary is Rs 2 lakhs per month.

Wife has stable PSU income.

Monthly expenses are low. Travel costs are higher.

No children yet. No major financial dependency.

This gives strong savings potential.

Assets include FD, mutual funds, EPF, NPS, and insurance.

Detailed Investment Snapshot
Rs 20 lakhs in fixed deposits.

Rs 5 lakhs in mutual funds with Rs 30,000 SIP.

Rs 10 lakhs in EPF, which is long-term retirement-oriented.

Rs 2 lakhs in NPS. Small at this stage.

Rs 5 lakhs in savings account. Low returns here.

One Tata AIA life insurance policy with investment element.

Appreciation and Positive Factors
You save more than 50% of your income.

You have a long investment horizon of 11 years.

You already started mutual fund SIPs. That’s good.

Your EPF is growing tax-free. Safe for retirement.

You have financial support from spouse.

No loans or EMIs at present.

Evaluation of Current Strategy
Fixed deposits earn low returns.

Rs 5 lakhs idle in savings account earns less.

Insurance policy is a low-yield product.

Rs 2 lakh NPS is very small to matter now.

SIP is good but may need more growth focus.

Why the Insurance Policy Needs Review
Premium is Rs 1 lakh per year for 6 years.

It gives only Rs 2 lakhs yearly for few years later.

Life cover is Rs 12 lakhs only. Very low.

Return is not beating inflation.

Treating this as investment is not wise.

Insurance should be pure term, not return-based.

You must consider surrendering this policy.

Reinvest the proceeds into mutual funds for better growth.

Don’t Treat Real Estate as Retirement Plan
You want to buy a flat under Rs 80 lakhs.

Aim is rental income and tax benefits via wife's job.

Rental yield is low, usually 2% to 3% only.

EMIs, maintenance, property tax eat into returns.

Liquidity is poor. Exit may take months or years.

Avoid locking Rs 20 to 30 lakhs in one illiquid asset.

Instead, spread this in diversified mutual funds.

It gives more flexibility, control, and access.

Asset Allocation Planning – A Clear Roadmap
To retire at 45, asset allocation is very important. Let us define that now.

60% in equity mutual funds – for long-term growth.

25% in debt mutual funds – for stability and income later.

10% in EPF and NPS – keep contributing as per existing structure.

5% in gold mutual funds – for diversification and inflation hedge.

This model gives long-term growth with some protection.

Mutual Funds – Active Management is Better
You are investing Rs 30,000 monthly in mutual funds.

Actively managed funds can adjust portfolio actively.

They reduce losses during market falls.

Index funds simply copy market. No manager adjusts risk.

You are working towards early retirement.

You cannot afford high volatility or long delays in recovery.

So, avoid index funds for this goal.

Regular Funds Are Better Than Direct Funds
Many investors choose direct funds to save costs.

But direct plans offer no personal support or guidance.

Regular plans via MFD with CFP can help:

Regular review of portfolio

Asset rebalancing based on goals

Emotional support during market panic

Tax harvesting and goal mapping

In your early retirement journey, support matters more than cost.

Retirement Planning for Age 45 – The Core Focus
You want to retire at 45. That’s only 11 years left. Your plan must be tight.

Let’s split it into phases:

Phase 1 – Wealth Creation (Now to 42)
Increase SIP to Rs 60,000 monthly gradually.

Shift funds from FD and savings to mutual funds.

Continue EPF. Don’t withdraw early.

Review insurance. Take term cover of Rs 1 crore minimum.

Avoid buying property during this phase.

Phase 2 – Consolidation (Age 42 to 45)
Slow down equity exposure.

Increase debt allocation slowly.

Ensure all assets are liquid or partially liquid.

Prepare 3-year worth of expenses in debt funds.

Start building SWP-based income plans.

Phase 3 – Retirement (Post Age 45)
Don’t withdraw lump sum.

Use SWP from mutual funds.

Withdraw interest from debt funds only.

Tap equity funds last.

Keep cash reserve of 12–18 months in liquid fund.

Keep health insurance separate and active.

Ideal Action Plan for Next 6 Months
Review current SIP portfolio.

Increase SIP by Rs 10,000 now.

Move Rs 10 lakhs from FD into mutual funds slowly.

Move Rs 3 lakhs from savings to liquid fund.

Surrender Tata AIA policy after checking surrender value.

Take pure term insurance of Rs 1 crore with 30-year cover.

Set separate health policy for self and spouse.

Start tracking net worth and cash flow every 6 months.

Meet a Certified Financial Planner for goal-based planning.

Travel Expenses – Plan Smartly
Rs 5 lakhs annual travel is high.

Enjoy travel but reduce by 20% if possible.

Invest that saving for retirement.

Consider travel from returns post-retirement, not principal.

Emergency Fund & Risk Management
Keep 6 months’ expenses in ultra-short debt mutual funds.

Don’t keep excess money in savings account.

Monitor and review this every year.

Ensure nomination and joint holding in all investments.

Create a simple Will for asset transfer later.

Final Insights
You are well placed to retire by 45.

You must shift focus from fixed deposits to mutual funds.

Don’t invest in property. It blocks funds and reduces flexibility.

Surrender low-return insurance plans. Go for pure term cover.

Actively managed funds give better risk-adjusted returns.

Increase SIPs as income rises. Time is your best friend now.

Avoid direct mutual funds. Use a regular route with CFP guidance.

Track your progress with a clear goal-based tracker.

Stick to plan without breaking for temptations or social pressure.

Retiring early is not just about money. It is about planning well, acting early, and staying focused.

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