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Ramalingam Kalirajan |10870 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
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 - Aug 04, 2025Hindi
Hi Sir, I am 38 years old working as IT professional, post tax I am getting 3.33 lakhs per month, company providing NPS option, I am investing 17000 towards NPS for tax benefit and retirement plan. I have 2 personal loans one is 25 lakhs with 10.5 ROE with emi 66000 for next 4 years, second is 15 lakhs with 10.75 ROE with emi 39000 for next 4 years. I have mutual funds holding 5 lakhs and direct stocks 3.6 lakhs, 3.7 lakhs in PPF and 12 lakhs EPF, 3 lic policy, one is money back policy yearly premium 6.2k( 2014 started -2031), jeevan anand 27k yearly (2016-2035), jeevan labh 5.5 lakh yearly it is 10 years premium payment, already paid 5 years, 5 payment left, by 2035 will get 1.2cr. I have agricultural land 2.72 acres which gives 65k per year. I am holding 2 plots for long term. I have already purchased villa (1.10 cr) and paid 20% down payment remaining will go for home loan. I doing chitti in my native place for 10 lakhs for 20 months, paid already 4 chitti. My monthly house hold amount comes under 90k including Rent 25.5k . I need your suggestion to plan my financial for my retirement and my kids education (9 years old and 3 years old) . I have health insurance coverage of 15 lakhs and my company provides with additional of 8 lakhs and my parents depends on me , they have 6 lakhs health insurance and I send them 17k every month.
Ans: You’ve shown amazing commitment and effort in your financial journey so far.
Balancing family needs, loans, investments, and responsibilities is never easy.
You’ve done it well and deserve appreciation.
Now let's assess your complete financial life in detail.
We will review each element and provide a 360-degree view.
Focus will be on strengthening your retirement and children's education goals.
» Income, Savings and Current Commitments
– Your monthly post-tax income is Rs.3.33 lakhs.
– Household expenses including rent are Rs.90,000.
– You support parents with Rs.17,000 monthly.
– Two personal loan EMIs total Rs.1.05 lakhs.
– Chit fund also takes outflows monthly.
– Remaining income is under pressure due to these fixed costs.
Even though income is strong, actual investible surplus is low.
This can impact long-term wealth building.
We need to create breathing room in monthly cash flow.
» Loan Strategy Needs Immediate Action
– You are paying EMIs of Rs.1.05 lakhs per month.
– Interest rates are above 10%.
– These are personal loans, not secured by assets.
– These are very expensive loans.
– They eat a big portion of your income every month.
Suggestions:
– Use surplus or bonuses to part-prepay these loans.
– Repay the costlier one first, or the one with smaller balance.
– Do not increase investments till at least one loan is cleared.
– Avoid parallel new loans for any purpose till these close.
Freeing up this EMI burden is the first big win for your future goals.
» NPS – Retirement Benefit, But With Limits
– You contribute Rs.17,000 monthly in NPS.
– This gives you tax benefit under Sec 80CCD(1B).
– It helps build long-term retirement fund.
However:
– NPS has lock-in till age 60.
– Partial withdrawal is restricted.
– 60% corpus is tax-free, rest must be used for pension.
– Pension from annuity is fully taxable.
NPS is helpful but should not be your only retirement plan.
You need more flexible and high-growth options like mutual funds.
» Mutual Funds – Increase Investment Over Time
– You currently hold Rs.5 lakhs in mutual funds.
– This is a good start but not enough for your goals.
– Especially with two children and long-term plans.
Recommendations:
– Avoid investing in direct plans.
– Direct plans do not offer professional guidance.
– Without a Certified Financial Planner, mistakes can reduce gains.
– Regular plans give expert advice, rebalancing, and support.
– Investing through CFP helps you align funds with goals.
Increase investments step-by-step as you clear your loans.
Start with child education goals, then retirement.
» Avoid Index Funds – You Need Better Risk Management
– Index funds invest blindly in the whole market.
– They do not filter bad companies or falling sectors.
– There is no fund manager to protect downside.
– In a market crash, index funds fall fully.
– They also don’t outperform – they just match the index.
Your goals need outperformance, not matching returns.
Actively managed funds offer:
– Smarter stock selection
– Risk control
– Fund manager experience
– Dynamic adjustment
Always go with actively managed funds via regular plan with Certified Financial Planner support.
» Direct Stocks – Keep It Limited
– You hold Rs.3.6 lakhs in direct equity.
– Equity investing needs deep research and regular tracking.
– You also need risk control and diversification.
If you don’t have time to track stocks:
– Reduce exposure over time.
– Shift to mutual funds with active management.
– Let professionals handle your equity allocation.
Don’t add more capital to direct stocks unless you are an experienced investor.
» PPF and EPF – Stable Support for Long-Term
– You have Rs.3.7 lakhs in PPF and Rs.12 lakhs in EPF.
– Both are safe, long-term, and tax-free options.
– EPF will grow through your salary contribution.
– PPF maturity can be aligned to your retirement or kid’s education.
These are low-risk parts of your portfolio.
But returns will be slower than mutual funds.
Don’t rely fully on them to meet large future goals.
» LIC Policies – Need to be Reviewed and Rationalised
You have three LIC policies:
– Money back policy – Rs.6.2k yearly
– Jeevan Anand – Rs.27k yearly
– Jeevan Labh – Rs.5.5 lakhs yearly premium, 10-year payment
LIC plans give:
– Very low returns, usually 4% to 5%
– Poor liquidity
– Poor goal alignment
– High premiums reduce investment capacity
Action Plan:
– You can continue money back and Jeevan Anand till maturity due to low premium.
– But Jeevan Labh is absorbing huge premium.
– Even though it says Rs.1.2 crore by 2035, the return is low.
– Surrender the Jeevan Labh policy now.
– Reinvest surrender amount into mutual funds via regular plan.
– Your Certified Financial Planner can guide you.
This change will boost your returns and improve liquidity.
» Agricultural Land and Plots – Treat Them as Passive Holdings
– Your land gives Rs.65,000 income yearly.
– Two plots are held for long term.
Please remember:
– Land and plots do not give regular cash flow.
– They need maintenance, records, and legal tracking.
– Selling them is not easy in emergencies.
– They don’t fit well into financial planning goals.
Don’t count land/plots for education or retirement goals.
Treat them as passive holdings.
Build your core financial strength around mutual funds.
» Villa Purchase and Home Loan – Balance It Carefully
– You have booked a villa worth Rs.1.10 crore.
– Paid 20% down payment.
– Remaining will be on home loan.
Suggestions:
– Keep EMI below 40% of your income.
– Include this EMI only after clearing personal loans.
– Home is a lifestyle decision, not an investment.
– Avoid overcommitting if other goals are pending.
Plan this with your Certified Financial Planner to ensure cash flow is balanced.
» Chit Fund – Limited Use Only
– You have joined a 10 lakh chit.
– Already paid 4 rounds.
Keep in mind:
– Chits are not regulated like mutual funds.
– Default risk is high if organiser is not trusted.
– Do not increase chit exposure in future.
Complete the current chit but don’t depend on it for long-term goals.
» Children’s Education Planning – Act Now
– Your children are 9 and 3 years old.
– You have around 9-15 years before they need college funds.
Steps to take:
– Start SIP in child-focused mutual fund via regular plan.
– Invest in actively managed equity-oriented funds.
– Use SIPs to build corpus over years.
– Avoid ULIPs and child plans from insurance companies.
– They give poor returns and lack flexibility.
A Certified Financial Planner can create a goal map for both kids.
This helps avoid future education loans.
» Retirement Planning – Build Your Corpus Slowly and Steadily
– You are 38 now.
– You have around 22 years to retire.
– EPF and NPS are good supports.
– But they are not enough.
You must create a parallel retirement fund using:
– Diversified mutual funds
– Regular contribution via SIP
– Proper asset allocation
– Tax-efficient withdrawal planning
Start small now and increase every year.
Don’t delay this till your 40s.
Your retirement must be independent of children or property.
» Insurance – Good Start, But Needs Layering
– You have Rs.15 lakh personal health insurance.
– Your company offers Rs.8 lakh coverage.
– Parents have Rs.6 lakh insurance.
Recommendations:
– Buy term life insurance if not already done.
– Ensure cover is 10-15 times your annual income.
– Don’t mix insurance with investment.
– Avoid ULIPs or endowment for new policies.
– Check if parent’s health cover is sufficient based on age.
A Certified Financial Planner can assess insurance adequacy for the whole family.
» Cash Flow and Emergency Fund – Strengthen Liquidity
– Monthly fixed outflows are very high.
– Limited buffer is visible.
– You must have at least 6 months of expenses saved.
Build emergency fund using:
– Liquid mutual funds
– Bank sweep-in account
– Recurring deposits (for short-term)
This will protect you in job loss or sudden expense.
» Tax Planning – Use All Allowed Sections But Avoid Over-Focus
– NPS gives benefit under 80CCD(1B).
– EPF and PPF cover 80C.
– Home loan will give deduction under 80C and 24(b).
– Health insurance premiums also reduce tax.
But don’t over-focus on tax-saving only.
Focus on wealth creation and goal fulfilment.
Don’t buy poor-return products for tax saving alone.
» Finally
– You have built a strong base.
– Income is good, and responsibilities are well managed.
– But you must shift focus from debt to wealth.
– Clear personal loans first.
– Surrender unproductive insurance plans.
– Increase mutual fund investments via regular plan and CFP.
– Protect family with right insurance.
– Avoid index funds, direct funds, and real estate overexposure.
– Track children’s education needs step by step.
– Balance villa loan carefully with other goals.
– Stay disciplined with long-term investing.
A Certified Financial Planner will guide you with goal tracking, fund selection, and review.
This approach will give peace of mind and wealth creation both.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Balancing family needs, loans, investments, and responsibilities is never easy.
You’ve done it well and deserve appreciation.
Now let's assess your complete financial life in detail.
We will review each element and provide a 360-degree view.
Focus will be on strengthening your retirement and children's education goals.
» Income, Savings and Current Commitments
– Your monthly post-tax income is Rs.3.33 lakhs.
– Household expenses including rent are Rs.90,000.
– You support parents with Rs.17,000 monthly.
– Two personal loan EMIs total Rs.1.05 lakhs.
– Chit fund also takes outflows monthly.
– Remaining income is under pressure due to these fixed costs.
Even though income is strong, actual investible surplus is low.
This can impact long-term wealth building.
We need to create breathing room in monthly cash flow.
» Loan Strategy Needs Immediate Action
– You are paying EMIs of Rs.1.05 lakhs per month.
– Interest rates are above 10%.
– These are personal loans, not secured by assets.
– These are very expensive loans.
– They eat a big portion of your income every month.
Suggestions:
– Use surplus or bonuses to part-prepay these loans.
– Repay the costlier one first, or the one with smaller balance.
– Do not increase investments till at least one loan is cleared.
– Avoid parallel new loans for any purpose till these close.
Freeing up this EMI burden is the first big win for your future goals.
» NPS – Retirement Benefit, But With Limits
– You contribute Rs.17,000 monthly in NPS.
– This gives you tax benefit under Sec 80CCD(1B).
– It helps build long-term retirement fund.
However:
– NPS has lock-in till age 60.
– Partial withdrawal is restricted.
– 60% corpus is tax-free, rest must be used for pension.
– Pension from annuity is fully taxable.
NPS is helpful but should not be your only retirement plan.
You need more flexible and high-growth options like mutual funds.
» Mutual Funds – Increase Investment Over Time
– You currently hold Rs.5 lakhs in mutual funds.
– This is a good start but not enough for your goals.
– Especially with two children and long-term plans.
Recommendations:
– Avoid investing in direct plans.
– Direct plans do not offer professional guidance.
– Without a Certified Financial Planner, mistakes can reduce gains.
– Regular plans give expert advice, rebalancing, and support.
– Investing through CFP helps you align funds with goals.
Increase investments step-by-step as you clear your loans.
Start with child education goals, then retirement.
» Avoid Index Funds – You Need Better Risk Management
– Index funds invest blindly in the whole market.
– They do not filter bad companies or falling sectors.
– There is no fund manager to protect downside.
– In a market crash, index funds fall fully.
– They also don’t outperform – they just match the index.
Your goals need outperformance, not matching returns.
Actively managed funds offer:
– Smarter stock selection
– Risk control
– Fund manager experience
– Dynamic adjustment
Always go with actively managed funds via regular plan with Certified Financial Planner support.
» Direct Stocks – Keep It Limited
– You hold Rs.3.6 lakhs in direct equity.
– Equity investing needs deep research and regular tracking.
– You also need risk control and diversification.
If you don’t have time to track stocks:
– Reduce exposure over time.
– Shift to mutual funds with active management.
– Let professionals handle your equity allocation.
Don’t add more capital to direct stocks unless you are an experienced investor.
» PPF and EPF – Stable Support for Long-Term
– You have Rs.3.7 lakhs in PPF and Rs.12 lakhs in EPF.
– Both are safe, long-term, and tax-free options.
– EPF will grow through your salary contribution.
– PPF maturity can be aligned to your retirement or kid’s education.
These are low-risk parts of your portfolio.
But returns will be slower than mutual funds.
Don’t rely fully on them to meet large future goals.
» LIC Policies – Need to be Reviewed and Rationalised
You have three LIC policies:
– Money back policy – Rs.6.2k yearly
– Jeevan Anand – Rs.27k yearly
– Jeevan Labh – Rs.5.5 lakhs yearly premium, 10-year payment
LIC plans give:
– Very low returns, usually 4% to 5%
– Poor liquidity
– Poor goal alignment
– High premiums reduce investment capacity
Action Plan:
– You can continue money back and Jeevan Anand till maturity due to low premium.
– But Jeevan Labh is absorbing huge premium.
– Even though it says Rs.1.2 crore by 2035, the return is low.
– Surrender the Jeevan Labh policy now.
– Reinvest surrender amount into mutual funds via regular plan.
– Your Certified Financial Planner can guide you.
This change will boost your returns and improve liquidity.
» Agricultural Land and Plots – Treat Them as Passive Holdings
– Your land gives Rs.65,000 income yearly.
– Two plots are held for long term.
Please remember:
– Land and plots do not give regular cash flow.
– They need maintenance, records, and legal tracking.
– Selling them is not easy in emergencies.
– They don’t fit well into financial planning goals.
Don’t count land/plots for education or retirement goals.
Treat them as passive holdings.
Build your core financial strength around mutual funds.
» Villa Purchase and Home Loan – Balance It Carefully
– You have booked a villa worth Rs.1.10 crore.
– Paid 20% down payment.
– Remaining will be on home loan.
Suggestions:
– Keep EMI below 40% of your income.
– Include this EMI only after clearing personal loans.
– Home is a lifestyle decision, not an investment.
– Avoid overcommitting if other goals are pending.
Plan this with your Certified Financial Planner to ensure cash flow is balanced.
» Chit Fund – Limited Use Only
– You have joined a 10 lakh chit.
– Already paid 4 rounds.
Keep in mind:
– Chits are not regulated like mutual funds.
– Default risk is high if organiser is not trusted.
– Do not increase chit exposure in future.
Complete the current chit but don’t depend on it for long-term goals.
» Children’s Education Planning – Act Now
– Your children are 9 and 3 years old.
– You have around 9-15 years before they need college funds.
Steps to take:
– Start SIP in child-focused mutual fund via regular plan.
– Invest in actively managed equity-oriented funds.
– Use SIPs to build corpus over years.
– Avoid ULIPs and child plans from insurance companies.
– They give poor returns and lack flexibility.
A Certified Financial Planner can create a goal map for both kids.
This helps avoid future education loans.
» Retirement Planning – Build Your Corpus Slowly and Steadily
– You are 38 now.
– You have around 22 years to retire.
– EPF and NPS are good supports.
– But they are not enough.
You must create a parallel retirement fund using:
– Diversified mutual funds
– Regular contribution via SIP
– Proper asset allocation
– Tax-efficient withdrawal planning
Start small now and increase every year.
Don’t delay this till your 40s.
Your retirement must be independent of children or property.
» Insurance – Good Start, But Needs Layering
– You have Rs.15 lakh personal health insurance.
– Your company offers Rs.8 lakh coverage.
– Parents have Rs.6 lakh insurance.
Recommendations:
– Buy term life insurance if not already done.
– Ensure cover is 10-15 times your annual income.
– Don’t mix insurance with investment.
– Avoid ULIPs or endowment for new policies.
– Check if parent’s health cover is sufficient based on age.
A Certified Financial Planner can assess insurance adequacy for the whole family.
» Cash Flow and Emergency Fund – Strengthen Liquidity
– Monthly fixed outflows are very high.
– Limited buffer is visible.
– You must have at least 6 months of expenses saved.
Build emergency fund using:
– Liquid mutual funds
– Bank sweep-in account
– Recurring deposits (for short-term)
This will protect you in job loss or sudden expense.
» Tax Planning – Use All Allowed Sections But Avoid Over-Focus
– NPS gives benefit under 80CCD(1B).
– EPF and PPF cover 80C.
– Home loan will give deduction under 80C and 24(b).
– Health insurance premiums also reduce tax.
But don’t over-focus on tax-saving only.
Focus on wealth creation and goal fulfilment.
Don’t buy poor-return products for tax saving alone.
» Finally
– You have built a strong base.
– Income is good, and responsibilities are well managed.
– But you must shift focus from debt to wealth.
– Clear personal loans first.
– Surrender unproductive insurance plans.
– Increase mutual fund investments via regular plan and CFP.
– Protect family with right insurance.
– Avoid index funds, direct funds, and real estate overexposure.
– Track children’s education needs step by step.
– Balance villa loan carefully with other goals.
– Stay disciplined with long-term investing.
A Certified Financial Planner will guide you with goal tracking, fund selection, and review.
This approach will give peace of mind and wealth creation both.
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.
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