I am 37 year old software engineer earning 2.6 lakhs per month. I have been saving aggressively and have corpus of 1.2 crores in mutual funds and 30 lakhs in fixed deposits. I am single and have no plans to marry. I want to retire by 45 and travel India. Is my current corpus sufficient? Should I continue SIP of 80,000 per month or increase it?

Ans: You have done extremely well in your 30s. A Rs 1.5 crore corpus at 37 shows strong discipline and consistency. Your goal of retiring by 45 to travel India is inspiring and possible with proper structure and planning. Let us review your situation in detail and understand what steps will help you reach your dream confidently.

» Current Financial Position

You are earning Rs 2.6 lakhs per month, which gives strong savings potential. Your corpus includes –

Rs 1.2 crores in mutual funds

Rs 30 lakhs in fixed deposits

This totals Rs 1.5 crores of financial assets, which is excellent for your age. Being single, your lifestyle needs are likely moderate, giving you flexibility in saving and planning early retirement.

Your SIP of Rs 80,000 per month also shows clear intent towards financial freedom. With eight years to your target retirement at 45, you still have a meaningful time horizon for compounding.

» Retirement at 45 – Key Understanding

Retiring at 45 means you may live for another 35 to 40 years post-retirement. That means your investments should generate sustainable income for four decades.

When you retire early, two factors matter most:

The amount of corpus accumulated.

The rate of withdrawal every year.

Your focus should shift from mere accumulation to ensuring longevity of wealth.

» Evaluating Your Current Corpus

Rs 1.5 crore corpus at 37 is a strong start. However, for retirement at 45, the adequacy depends on your annual expenses.

Suppose your annual expenses today are Rs 12 to 15 lakhs. With inflation at even 6%, they will double roughly in 12 years. That means at 45, your annual expenses could touch Rs 25 to 30 lakhs.

To generate that income sustainably after retirement, you will need a retirement corpus close to Rs 6 to 7 crores, assuming moderate withdrawal and conservative growth post-retirement.

This shows your current corpus is not yet sufficient for full retirement at 45. But the good news is, you are on track and have the right habits to bridge the gap in the next eight years.

» Role of SIP in Your Future Wealth

Your monthly SIP of Rs 80,000 is powerful. Over eight years, this can grow substantially. But whether to continue or increase depends on your surplus cash flow and financial comfort.

If your monthly savings rate allows, increasing your SIP by 10% every year can accelerate your compounding. Even a small annual rise can add a few extra crores to your wealth by age 45.

Remember, wealth creation is not just about the SIP amount but also about staying invested and consistent in quality funds through market cycles.

» Review of Asset Allocation

Your asset mix now shows around 80% in mutual funds and 20% in fixed deposits. This is aggressive but aligns with your age and goal.

Still, inside mutual funds, it is vital to ensure proper diversification –

Around 60–65% in equity mutual funds for long-term growth.

Around 20–25% in hybrid or balanced advantage funds for stability.

Around 10–15% in short-term debt funds or liquid funds for flexibility.

Your fixed deposits can serve as an emergency and short-term reserve. But they shouldn’t dominate long-term wealth since post-tax returns are low compared to inflation.

» Importance of Reviewing Mutual Fund Portfolio

Regular fund review is necessary, not fund hopping. Many investors stay in poor-performing funds or wrong categories without knowing.

If your funds have lagged peers for two to three years, it is time to switch to better-managed options.

Actively managed mutual funds handled by skilled fund managers can outperform passive strategies.

» Why Actively Managed Funds Are Better for You

Some investors think index funds are better. But they have limitations. Index funds cannot protect during market falls because they mirror the index.

Actively managed funds can change sectors or cash positions when markets turn risky. A professional fund manager can take timely calls, which helps reduce volatility.

For someone aiming early retirement, stability matters as much as growth. Active funds allow a Certified Financial Planner to adjust risk dynamically, whereas index funds lack this flexibility.

» Importance of Investing Through Regular Funds

Many believe direct mutual fund plans give higher returns. But that small difference comes at a bigger cost – lack of professional review.

Investing through regular plans with a Certified Financial Planner gives you ongoing monitoring, rebalancing, and strategy updates.

If you go direct, no one tracks performance, risk exposure, or suitability. For long-term goals like retirement, expert guidance adds far more value than the minor cost difference.

» Managing Risk Before Early Retirement

Retiring at 45 means your investments must sustain long after you stop working. Hence, capital protection becomes as important as growth.

Before retiring, shift 30–40% of your corpus into safer categories like hybrid or debt-oriented funds. This will reduce volatility when you start withdrawals.

At the same time, maintain at least three years of expenses in liquid or short-term instruments. This ensures you do not sell equity funds during a market fall.

» Planning for Inflation During Travel Years

You wish to travel across India after retirement. That is a wonderful goal. But travel costs rise faster than general inflation.

So, plan travel as a separate goal, not under basic living expenses. Maintain a distinct “Travel Fund” that continues to earn even during retirement.

You can keep it partly in balanced advantage or hybrid funds to grow safely.

» Insurance and Health Coverage

Being single does not mean skipping insurance. You must have strong health insurance to protect your savings.

Hospitalisation costs rise every year. Buy a comprehensive health cover of at least Rs 25–30 lakhs. Also, maintain personal accident insurance for peace of mind.

Without proper cover, one medical emergency can disturb your early retirement plan.

» Emergency Fund and Liquidity

Keep at least six to eight months of expenses in a liquid fund or bank account. This protects you from short-term shocks like job loss or large repair costs.

Your fixed deposits can be part of this emergency reserve.

» Tax Efficiency in Your Plan

Mutual funds are tax-efficient compared to fixed deposits. Under current rules:

Equity fund gains above Rs 1.25 lakh a year are taxed at 12.5% (LTCG).

Short-term gains are taxed at 20%.

For debt funds, gains are taxed as per your income slab.

A Certified Financial Planner can guide you to withdraw or rebalance in the most tax-efficient manner before retirement.

» Withdrawal Strategy After 45

When you retire, you should not withdraw randomly. Create a systematic withdrawal plan.

Use equity mutual funds for growth and hybrid or debt funds for regular income. Withdraw only from safer categories in the early years and let equities grow longer.

This approach extends the life of your corpus.

Avoid traditional annuities since they give low returns and no flexibility. Mutual fund withdrawal plans are far more efficient and transparent.

» Planning for Future Cash Flow

Even after retiring, it is wise to have some small income sources. You can consider part-time consulting or remote work to reduce pressure on your corpus during the first few years.

It also keeps you mentally active and allows your investments to compound longer.

» Avoiding Common Mistakes

Many early retirees make a few common mistakes:

Overestimating post-retirement income and underestimating inflation.

Ignoring medical and travel inflation.

Investing too conservatively early or too aggressively near retirement.

A Certified Financial Planner can help maintain the right balance through annual review.

» Rebalancing Regularly

Review your asset allocation every year. If equity has grown too much, shift some profits into hybrid or debt funds.

This simple rebalancing keeps risk under control and locks your gains.

Avoid reacting to market noise. Stick to your plan through all cycles.

» When to Increase Your SIP

If you receive salary hikes or bonuses, increase your SIP gradually. Even a 5–10% rise each year can make a big difference.

Your lifestyle should grow slower than your income. The extra savings should directly go into your SIP.

With this, you can reach your target corpus faster and maybe even retire before 45.

» Building Emotional Readiness for Retirement

Financial freedom is not only about money. It is also about purpose.

Since you plan to travel India, start exploring now during holidays. This helps you visualise the lifestyle you want later.

This emotional clarity supports long-term financial discipline.

» Role of Certified Financial Planner

A Certified Financial Planner can help you in several ways –

Reviewing your mutual fund mix and returns annually.

Rebalancing asset allocation for each life stage.

Creating a step-by-step withdrawal and income plan post-retirement.

Ensuring all decisions align with your early retirement goal.

Professional oversight removes guesswork and improves long-term results.

» Finally

Your current savings show strong intent and clarity. You have already built a powerful base of Rs 1.5 crores.

With your income and discipline, your dream of retiring at 45 is realistic. You only need to –

Stay consistent with SIPs and raise them yearly.

Keep reviewing your funds with a Certified Financial Planner.

Gradually build safer assets as you near 45.

Avoid emotional investment decisions.

Maintain health insurance and emergency reserves.

With these actions, you can achieve both early retirement and freedom to explore India without financial stress.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

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