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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jun 26, 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 Sanjay on Jun 26, 2025Hindi

I am 35 and I have 30 lakh in FD, 4.5 lakh in EPF, Investing in PPF monthly 10K from last 3yrs, I don't have any loan currently my salary is 80k monthly and expenses are 40000 including my daughter fees and rent... i wanted to invest rest 40 k in Mutual funds and other schemes and want to retire by 50. How to plan for retirement and how much term plan should I take for myself and health insurance is covered by company still please suggest Money

Ans: You are 35 years old. Your current salary is Rs. 80,000 per month. You spend Rs. 40,000 monthly. That includes rent and daughter’s education. You save Rs. 40,000 monthly. You have Rs. 30 lakh in FD. You have Rs. 4.5 lakh in EPF. You also invest Rs. 10,000 monthly in PPF.

You have no loans. That is very good. You want to retire at 50. That means you have 15 years to plan. Let's look at your plan in detail from all angles.

Assessing Your Financial Position
Here is a summary of what you already have:

Rs. 30 lakh in Fixed Deposits.

Rs. 4.5 lakh in EPF.

Rs. 10,000 monthly in PPF for last 3 years.

Rs. 40,000 available monthly for investment.

Company covers your health insurance.

No loans or EMIs.

Single income, with daughter’s future to be secured.

This is a solid foundation. You are careful and thoughtful. That’s the right start.

Step 1: Set Clear Goals
You want to retire by 50. So, we plan for 15 years of working life. After 50, you need monthly income till age 85 or more.

Also, you will need to:

Support your daughter’s higher education.

Plan for her marriage.

Create emergency buffer.

Build a retirement income stream.

These all need clarity and commitment. Planning each with purpose is important.

Step 2: Current Savings – Reassessment
Your FDs are Rs. 30 lakh. These are low-yield instruments.

Let’s see the facts:

FD interest is taxable.

After tax, real return is very low.

FD does not beat inflation.

If you keep Rs. 30 lakh in FD for 15 years, it may lose value. You must slowly shift this into mutual funds. Not in one shot, but through Systematic Transfer Plans (STP).

Ideal steps:

Keep Rs. 6–8 lakh in FDs for emergency.

Move balance to a debt fund.

Start monthly STP into mutual funds over 3 years.

This will reduce risk and increase growth.

Step 3: Emergency Fund Creation
You have no EMIs now. But you must still plan for emergencies.

Keep 6–9 months of expenses aside.

You spend Rs. 40,000/month.

Keep Rs. 3.6 lakh in liquid fund or sweep-in FD.

This gives peace of mind. You don’t touch your investments during medical or job issues.

Step 4: Health Insurance Outside Company Cover
Company health cover is temporary.

You need your own independent health policy.

Buy Rs. 10 lakh individual policy.

Include daughter if you are single parent.

Do not delay. Buy now at lower premium.

Health costs are rising fast. In retirement, this will be your biggest need.

Step 5: Take Term Insurance for Protection
You are the only earner. So term cover is necessary.

How much cover to take:

At least 15–20 times your yearly salary.

That is Rs. 1.2 crore to Rs. 1.6 crore.

This is pure insurance. No return. But very low cost.

Take policy till age 60 or 65. Do not buy investment plans or ULIPs.

Step 6: Start SIPs for Retirement Goal
You have 15 years to build retirement corpus. This is your biggest focus now.

Use your Rs. 40,000 monthly savings to invest in mutual funds.

Choose a mix of large cap, flexi cap, and mid cap funds.

Use active mutual funds managed by experts.

Avoid index funds.

Why avoid index funds:

They just copy the index.

They don’t avoid bad-performing stocks.

No flexibility.

In falling markets, index funds fall fully.

Actively managed funds are better adjusted.

Expert managers reduce risk and increase potential return.

Step 7: Avoid Direct Mutual Funds
Direct funds seem attractive due to low expense.

But you lose expert help.

Here’s what happens in direct plan:

You pick wrong scheme.

You exit at wrong time.

No help to rebalance.

No review or corrections.

That leads to poor return.

Better option:

Use regular plans via MFD with CFP certification.

They guide your investments.

They align funds to your goals.

You stay on track till retirement.

A small fee is worth the clarity and discipline.

Step 8: Use Step-up SIP Strategy
You invest Rs. 40,000/month now. But income will rise.

Every year, increase SIP by 10%–15%.

This builds wealth faster.

Example:

Year 1: Rs. 40K

Year 2: Rs. 45K

Year 3: Rs. 50K

This works silently and builds large corpus in 15 years.

Step 9: Plan for Daughter’s Education
Your daughter may need funds after 5–7 years.

You must plan separately for that.

Do this:

Start Rs. 5,000–10,000 monthly SIP just for this goal.

Use flexi cap or hybrid mutual funds.

Withdraw only when needed.

Don’t mix this with retirement planning.

Each goal needs separate investment.

Step 10: Use PPF Smartly
You already invest Rs. 10,000/month in PPF.

It is safe and tax-free. You can continue it.

But it won’t help in retirement fully. Because:

PPF is locked for 15 years.

Withdrawal is limited.

Return is low compared to equity.

Use PPF for daughter’s education or safety reserve.

But focus more on equity mutual funds for retirement.

Step 11: Tax Planning and Efficiency
You can save tax smartly using:

EPF and PPF (under 80C)

ELSS mutual funds

Term insurance (under 80C)

Health premium (under 80D)

Tip:

Don’t invest only for tax benefit.

Invest for goals. Tax saving is bonus.

Step 12: Estate Planning for Family Security
Create a Will.

Write down who gets what.

Appoint a guardian for your daughter.

Include mutual funds, EPF, PPF and term cover.

Nomination is not equal to Will. Will gives full clarity.

Keep one executor. Make sure your family knows the plan.

Step 13: Review Your Plan Every Year
You can’t invest and forget.

Every year, do a full review.

Check how funds are performing.

Increase SIP.

Stop any non-performing fund.

Shift to better fund with help of MFD + CFP.

This small effort every year ensures your future is protected.

Step 14: Stay Away from Insurance + Investment Products
Don’t buy:

ULIPs

Endowment policies

Money-back policies

They promise return but give only 4%–5%.

No flexibility. High lock-in. Poor transparency.

Focus only on:

Term insurance

Health insurance

Mutual funds

PPF

EPF

This is enough.

Step 15: Mental Preparation for Retirement
You want to retire at 50. That’s just 15 years away.

Start preparing emotionally also:

Learn to live below your means.

Practice simple lifestyle.

Avoid debt.

Stay healthy. Medical costs will rise.

Money alone won’t give retirement peace. Simplicity will.

Finally
You are already thinking wisely. You are already saving 50% of your income. That’s rare.

Now convert this saving into smart investing.

Here’s what to focus on:

Reduce FD exposure slowly.

Shift to mutual funds using STP.

Use SIPs with yearly step-up.

Keep each goal separate.

Buy pure term and health insurance.

Take help of CFP through regular mutual funds.

Review yearly and correct course.

Retiring at 50 is possible. You have 15 years. Start your 360-degree financial plan today.

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

Asked on - Jun 30, 2025 | Answered on Jun 30, 2025

Thank you so much for your advice it means a lot

Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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