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Ramalingam Kalirajan |10836 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 08, 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

Asked by Anonymous - Sep 07, 2025Hindi

Hi, I am 36 years old. I have a portfolio of 46 lacs in equity, 70 lacs in MFs, 5 lacs in SGB, 29 lacs PPF, 17 lacs RBI bonds, 8 lacs corporate bonds, 30 lacs FD. Let me know how can I plan to get a monthly income of 1 lac if I plan to retire in next 5 years.

Ans: – First, you deserve praise for disciplined savings.
– Your portfolio is well diversified across many asset classes.
– The balance of equity, debt and fixed-income assets is commendable.
– At age 36, this foresight for early retirement shows maturity and focus.
– Your current allocation demonstrates long-term thinking and patience.

» Assessing Your Retirement Goal
– You want Rs.1 lakh per month, which is Rs.12 lakh annually.
– Retiring in 5 years means planning income stability for many decades.
– You need to balance growth and safety simultaneously.
– The corpus must not only provide income, but also beat inflation.
– Medical, lifestyle and family expenses may rise with time.

» Current Portfolio Evaluation
– Equity: Rs.46 lakh. This gives growth potential but also volatility.
– Mutual funds: Rs.70 lakh. Good exposure to active management and growth.
– Sovereign gold bonds: Rs.5 lakh. Helps as a hedge, but limited for income.
– PPF: Rs.29 lakh. Safe but locked and not liquid enough for near-term use.
– RBI bonds: Rs.17 lakh. Secure income, but fixed returns may lag inflation.
– Corporate bonds: Rs.8 lakh. Moderate yield but carries credit risk.
– FD: Rs.30 lakh. Stable, but not tax efficient and loses value to inflation.

» Strengths in Your Portfolio
– You already hold multiple asset classes.
– Your mix shows stability and growth balance.
– Long-term assets like PPF create safety cushion.
– Growth assets like equity and MFs build wealth.
– Debt instruments create predictability in cash flow.

» Gaps That Need Attention
– Too much FD and bonds may lower growth in the long run.
– Liquidity planning for first 10 retirement years is unclear.
– Tax efficiency is not optimised across instruments.
– Rising medical and lifestyle inflation not addressed fully.
– Corpus allocation for retirement income stream needs clarity.

» Importance of Active Fund Management
– Many investors think index funds are simple. But they lack flexibility.
– Index funds blindly copy an index, even weak companies remain inside.
– In volatile markets, this creates risk without active guidance.
– Actively managed funds use expert decisions for better outcomes.
– They aim to beat inflation and generate consistent returns.
– For a goal like retirement income, active funds are far more reliable.

» Need for Professional Support in Funds
– Some prefer direct funds thinking costs are low.
– But direct funds lack advisory support.
– Mistakes in allocation and timing can reduce wealth.
– Regular funds through a Certified Financial Planner with MFD channel give guidance.
– You get periodic review, rebalancing and 360-degree support.
– This adds more value than small cost savings in direct funds.

» Strategy for the Next 5 Years
– Allocate growth to equity and actively managed MFs.
– Allocate safety to bonds and FD for early retirement years.
– Plan a bucket strategy for retirement.
– First bucket: keep 5 to 7 years of income in debt and FD.
– Second bucket: keep medium-term money in hybrid and balanced funds.
– Third bucket: keep long-term growth in equity funds.
– This reduces risk and ensures steady flow of income.

» Tax Efficiency Planning
– FD and RBI bond interest is taxed at slab rate.
– Mutual funds offer better tax efficiency.
– For equity funds: LTCG above Rs.1.25 lakh taxed at 12.5%.
– STCG taxed at 20%.
– Debt fund gains taxed at your slab.
– Active fund choice can help reduce overall tax outgo.
– Careful withdrawal plan can optimise post-tax income.

» Inflation Protection
– Rs.1 lakh per month may not remain enough in 15 years.
– Inflation eats away purchasing power silently.
– Equity and active funds help keep pace with inflation.
– Fixed deposits and bonds will not be enough.
– Growth allocation is a must even after retirement.
– Regular review every 2-3 years is essential.

» Health and Insurance Preparedness
– Medical costs can disturb your plan if uninsured.
– Adequate health insurance is non-negotiable.
– Life insurance should cover family needs if something happens.
– Avoid mixing insurance and investments in future.
– If you already hold ULIP or investment-insurance, better to surrender.
– Reinvest the surrender value in well managed mutual funds.

» Withdrawal Strategy for Retirement
– Don’t withdraw randomly, follow structured plan.
– First 5-7 years income from safe bucket.
– Next 10-12 years from hybrid bucket.
– After that, equity bucket will be ready for use.
– This way, growth continues while you withdraw.
– Income will be steady and sustainable.

» Managing Emotional Bias
– Early retirement means many decades of no salary.
– Market volatility may trigger fear.
– Proper plan avoids panic selling.
– Disciplined approach and regular review bring peace of mind.
– Emotional control is as important as portfolio control.

» Rebalancing and Monitoring
– Over 5 years, some assets will grow faster than others.
– Rebalancing ensures alignment to your risk profile.
– Annual review with a Certified Financial Planner is vital.
– Adjust allocation based on market, tax and personal changes.
– This is a continuous process, not one-time activity.

» Legacy and Family Planning
– You should also think of dependents.
– Plan nominations and joint holdings properly.
– Will writing avoids legal issues later.
– If children’s education or marriage is planned, earmark funds separately.
– This ensures retirement corpus is not disturbed.

» Finally
– You have created a solid base already.
– A structured retirement income plan will secure your future.
– With 5 years left, fine-tuning allocation is critical.
– Growth, safety, tax efficiency, and inflation protection must work together.
– Certified Financial Planner guidance can integrate all aspects.
– With disciplined execution, Rs.1 lakh monthly income is realistic.
– You can retire early with confidence and comfort.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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