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35 Year Old Man Seeking Financial Advice for Retirement, Child Education, Vacation, and More

Ramalingam Kalirajan |7367 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 01, 2024

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

Asked by Anonymous - Jul 31, 2024Hindi

Hi, I am a 35y old Male. In my family my wife is housewife and 9 months old kid. My target is to retire at 55 and wanted to build sufficient corpse for my child education and marriage, also I want to plan vacation twice a year. Currently, my portfolio has 30 lakhs in MFs, 5 lakhs in NPS, 5 lakh in PPF, 10 lakh in stock, 15 lakh in PF and about 8 lakhs in FD. I have 1.5cr term plan. My monthly investment is 62k in MFs and annual investment 50k in NPS and 1lakh physical gold. I have a plot worth 60 lakh and my after-tax salary is 1.80lakhs/month out of which 60k is my monthly expenses. I am investigating 60% in large cap , 25% in mid cap and 15% in small cap fund. Can you please suggest target amount for my goals and am I doing good or what's else I need to improve to achieve my goals? I have few more goals like buying car and a house but not sure if I can fulfill them.

Ans: Current Financial Position
Your portfolio includes:

Rs. 30 lakhs in Mutual Funds
Rs. 5 lakhs in NPS
Rs. 5 lakhs in PPF
Rs. 10 lakhs in stocks
Rs. 15 lakhs in PF
Rs. 8 lakhs in FD
Rs. 1.5 crore term plan
Monthly and Annual Investments
Rs. 62k in Mutual Funds monthly
Rs. 50k in NPS annually
Rs. 1 lakh in physical gold annually
Current Allocation
60% in large cap
25% in mid cap
15% in small cap
Goals
Retirement at 55
Child's education and marriage
Bi-annual vacations
Potential car and house purchase
Financial Goals and Target Amounts
Retirement Corpus:

Assuming post-retirement monthly expense of Rs. 1.5 lakhs (including vacations)
Estimated target: Rs. 5 crores
Child's Education and Marriage:

Education: Rs. 50 lakhs (in 17 years)
Marriage: Rs. 50 lakhs (in 25 years)
Evaluation of Current Strategy
You have a quite diversified portfolio and you are investing a considerable amount in Mutual Funds. Your allocation between large cap, mid cap and small cap funds is balanced.

Recommendations
Increase Investment in NPS:

As you consider that, ramp up your NPS investment. It has tax benefits and you'll be able to build a corpus for your retirement.
Mutual Fund Portfolio Review:

Get a view on the performance of your mutual funds periodically. Realign your funds in case of underperformance but avoid frequent changes as this will attract capital gains tax.
Emergency Fund:

Make sure you have an emergency fund. It should be six months of your expenses in a liquid fund or savings bank account.
Education and Marriage Fund:

Start an separate investment plan for the education and marriage of your child. Equity mutual funds can be considered for the long term.
Vacation Planning:

Set aside a certain amount for the vacations. You may use a recurring deposit or a short-term debt fund.
Car and House Purchase:

Prioritize your goals. If buying a car or house is important, plan accordingly. Do consider if the goals are aligning with your retirement and education plans.
Gold Investment:

Continue investing in gold, but do not go beyond 10-15% of your portfolio.
Regular Reviews:

Review your financial plan once a year. Bring adjustments in line with changes in the market and changes in life.
Professional Guidance:

Have a custom-made strategy by consulting a Certified Financial Planner.

Closing Remarks
You are on a very sound financial path. If you stick to this, then with discipline, you can achieve all your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Asked on - Aug 01, 2024 | Answered on Aug 01, 2024

Thank you very much sir.

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

Asked on - Aug 03, 2024 | Answered on Aug 06, 2024

I have few more queries can you please suggest your views. We have seen that properties rate grow twice or thrice in 4-5 yrs. But I don't have sufficient down payment as I keep in investing in mutual funds. Is it good to redeem mutual fund and with that amount invest in property. And if I you suggest not to redeem what is best way to invest in property. Sometime I feel to redeem all my investment and buy some property. You have mentioned increase NPS amount can you please suggest what will be good amount which can help meet my goal. I guess to meet retirement amount of 5cr you suggested that . Your answer has really helped me.

Ans: It's not advisable to redeem all your mutual funds to invest in property. Property investment is illiquid and carries higher risks. If you want to invest in property, consider saving separately for it without disturbing your current mutual fund investments.

You currently invest Rs. 50k annually in NPS. Consider increasing it to Rs. 1 lakh annually. This can help build a stronger retirement corpus and provides tax benefits.

For a more detailed and personalized financial plan, consult a Certified Financial Planner. They can help you align all your goals effectively.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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