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Ramalingam Kalirajan |10879 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 04, 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 - Jul 14, 2025Hindi

I am 38 years old with salary of 60k. My wife is 36 with salary of 30k. I got twin daughters aged 5 and currently in sr.kg. Could you assist us with financial advise to acheive below. 1- Retire at 60 2- Corpus amount for both kids to help them with their education. 3- Decent post retirement income I am currently having a home loan for which I am paying emi of 25k pm. The emi will continue for about 340 months more.

Ans: You and your wife are earning well and managing your household with discipline. You have twin daughters and a home loan but are already thinking long-term. That mindset is excellent. Planning at age 38 gives you over 20 years to build wealth and secure retirement. Your combined income is Rs.90,000. You’re paying Rs.25,000 towards home loan EMI. That leaves Rs.65,000 for all other needs. Let's now plan for all three goals step by step.

» Understand Your Core Financial Goals

– Retire peacefully by age 60.
– Fund both daughters’ higher education.
– Generate a steady post-retirement income.
– Also manage home loan EMIs and current lifestyle.

All of these goals are possible with clear savings and steady investing.

» Current Budget View and Room for Saving

– Family income is Rs.90,000 monthly.
– EMI is Rs.25,000, which is 27% of income.
– That’s manageable but takes a fixed portion.
– Focus now is on controlling lifestyle expenses.
– Try to create monthly savings of Rs.20,000–25,000.
– Use this saving to build goals via SIPs.
– Your loan is long tenure (340 months more).
– Don’t aim to pre-close the loan for now.
– Instead, invest savings to create long-term wealth.

» Planning for Retirement at Age 60

– You have 22 years left for retirement.
– That’s a good time to build a corpus.
– Monthly SIPs must be done in diversified equity mutual funds.
– These will give growth and beat inflation.
– Keep investing consistently every month.
– Increase SIP amount every year by 10–15%.
– Use bonus or increment to top up SIPs.
– Retirement corpus should be focused only on your income.
– Don’t mix education and other goals in same SIPs.

– Avoid index funds.
– They give average returns.
– They don’t handle market crashes well.
– Actively managed funds are better for your stage.
– They provide better downside protection.
– Fund managers can shift allocation when needed.
– That flexibility is missing in index funds.

– Also avoid direct mutual funds.
– They look cheaper but come with no professional support.
– You may miss opportunities or take wrong calls.
– Instead, invest in regular funds via MFDs guided by a Certified Financial Planner.
– This gives advice, rebalancing, and goal tracking.

– Don’t think of annuity plans for retirement.
– They give low returns and poor flexibility.
– Instead, use mutual fund withdrawal strategy in retirement.
– SIP now and SWP later is the right method.

» Planning for Your Daughters’ Education

– Your daughters are 5 years old.
– You have 12–13 years before they enter college.
– That’s sufficient time for investment growth.
– Set up dedicated SIPs for each child’s education.
– Begin with small SIPs and increase every year.
– Choose child-focused mutual funds or multi-cap funds.
– Don’t use PPF or FDs for this goal.
– They are too conservative and won’t beat inflation.

– When they reach age 16–17, shift funds to safer instruments.
– This protects the corpus from market risk.
– Have a clear amount in mind for each child.
– Include inflation and possible foreign study cost.
– But plan with flexibility.
– Don’t fix only one path.
– The goal is to support, not decide their career.

– Avoid using your retirement corpus for education.
– Keep goals separate.
– If required, use education loans to bridge gaps.
– But try to avoid loans through proper SIP growth.

» Managing the Home Loan Effectively

– Your EMI is Rs.25,000 monthly.
– This is for 340 more months.
– That’s over 28 years.
– The loan may overlap with your retirement.
– Don’t panic about that.
– You may prepay partly later if income increases.
– But right now, investing gives better returns.

– As your income grows, keep EMI percentage same.
– This allows for more investment.
– Don’t reduce SIPs to pay more EMI.
– SIPs create assets.
– Loan only clears liability.
– Assets will support life better than loan closure.

– Keep emergency fund of 4–6 months’ EMI.
– This avoids stress if income fluctuates.
– Park it in liquid mutual funds.
– Don’t keep it in savings account.

» Building Emergency and Medical Protection

– If you haven’t taken term insurance, do it now.
– Sum assured must be 10–12 times your annual income.
– Take separate term cover for each spouse.
– Health insurance should also be taken separately.
– Don’t rely only on employer cover.
– Include your children under family floater plan.
– Review coverage every 3 years.
– Update based on medical inflation.

– Don’t mix insurance with investment.
– No ULIP, endowment, or LIC traditional plans.
– If you already have, surrender and shift to mutual funds.
– These old products give poor returns and high costs.

» Setting Up the Right Investment Structure

– Make three SIPs:
One for retirement
One for daughters’ education
One for emergency corpus building

– This brings discipline and purpose.
– Start with what you can afford now.
– Increase it annually with salary growth.
– Don’t stop SIP even if market falls.
– Long-term investing rewards patience.

– Allocate funds like this:
Retirement goal – 60–70% equity funds
Education goal – 70% equity now, then shift to hybrid
Emergency – 100% liquid or ultra-short debt fund

– Keep track of each fund’s performance every year.
– Don’t over-diversify.
– 2–3 funds per goal is enough.

» Tax Planning to Improve Savings

– Use Rs.1.5 lakh 80C limit wisely.
– Use EPF, ELSS funds, and term premium to claim.
– Avoid locking all in PPF or LIC.
– Use ELSS mutual funds for long-term tax-saving investment.
– They give better return than PPF.

– Use 80D for health insurance.
– Declare home loan interest under section 24.
– This reduces your taxable income.
– Try to save tax and invest the refund again.
– Don’t spend tax savings.
– Let it work for your goals.

» Creating Financial Discipline as a Family

– Talk with your spouse openly about finances.
– Set common goals.
– Review budget together.
– Keep all savings, SIPs, and documents accessible.
– Set goals with names like “Retirement SIP” or “Daughter’s Future”.
– It gives motivation to stay committed.

– Avoid unnecessary expenses.
– Budget monthly.
– Save before spending.
– Don’t fall for quick investment tips.
– Stay long-term and guided.

– Review your goals and corpus every 12 months.
– Adjust SIPs based on real-life changes.
– Rebalance your portfolio as you age.
– Use help from a Certified Financial Planner when needed.
– It adds clarity and structure.

» Final Insights

– Your income is solid.
– Your age is ideal for planning.
– Kids’ education and your retirement are achievable goals.
– Just start investing now with SIPs.
– Don’t delay by waiting for perfect time.
– Stay focused and patient.

– Keep life goals separate.
– Keep insurance pure.
– Keep emotions away from investing.
– SIPs work silently but powerfully over time.
– Every Rs.1,000 invested now grows into a strong backup later.

– You’re on the right path.
– Just stay consistent and disciplined.
– These 20 years can create the life you dream of.

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

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.