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Ramalingam Kalirajan |11462 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 15, 2025

Ramalingam Kalirajan has over 26 years of experience in MF distribution and wealth management. He holds an MBA in Finance from the University of Madras and is a CFP (Certified Financial Planner) credentialed professional. He is the Director of Holistic Investment, a Chennai-based AMFI-registered Mutual Fund Distribution (ARN-4188) and APMI-registered PMS Distribution firm (APRN07386), helping clients build long-term wealth through mutual funds and other investment solutions.... more

Question by Krishnamurthy on Sep 15, 2025Hindi

I am 39 year old s/w professional with combined income (with my wife) of over Rs. 6 lakhs p.m. I currently own a flat (current market value Rs. 1.75 cr), a plot worth Rs. 85 lakhs, MF of 10 lakhs, FD of Rs. 17 lakhs, shares worth Rs. 3 lakhs and bank balance of Rs. 6 lakhs. I have a term insurance for Rs. 1 cr. There is also an ancestral house worth Rs. 3 crores which I share equally with my brother. The plan is to dispose of the ancestral house and the plot in the next few years but retain the flat for my own use. I wish to retire by the age of 55 with a corpus of 15 cr. Can you suggest the way forward.

Ans: At 39, you and your wife earn over Rs. 6 lakhs monthly. This is a strong income. You already hold multiple assets across real estate, mutual funds, fixed deposits, shares, and bank balance. Having a clear vision to retire at 55 with Rs. 15 crore corpus is very inspiring. Many people avoid such clarity. Your planning mindset deserves appreciation.

» Current Asset Snapshot
– Flat worth Rs. 1.75 crore
– Plot worth Rs. 85 lakhs
– Mutual funds Rs. 10 lakhs
– FD Rs. 17 lakhs
– Shares Rs. 3 lakhs
– Bank balance Rs. 6 lakhs
– Ancestral house worth Rs. 3 crores, shared with brother
– Term insurance Rs. 1 crore

Your net worth is already significant. Real estate dominates. Liquid assets are smaller. But high monthly income gives scope to build financial assets faster.

» Retirement Goal Assessment
You aim for Rs. 15 crore at 55. That gives you 16 years. With disciplined savings and growth, this is achievable. Your combined income is strong enough. You also expect sale proceeds from ancestral house and plot. These can accelerate your corpus creation if reinvested wisely.

» Importance of Liquidity
Real estate forms bulk of your wealth. But real estate is less liquid. For retirement, liquidity is key. You need assets that give income and flexibility. Mutual funds, FDs, and stocks provide this. Selling ancestral house and plot will help shift wealth into financial assets. That will improve liquidity and diversification.

» Managing Sale of Ancestral House
Ancestral house worth Rs. 3 crore will be shared. Your share may be around Rs. 1.5 crore. Sale proceeds must not be reinvested into another property. Instead, channel into financial assets. Equity and debt mutual funds, with professional review, will balance growth and safety. This will push you closer to your Rs. 15 crore goal.

» Plot Sale Planning
You also plan to sell plot worth Rs. 85 lakhs. Timing sale carefully is important. Once sold, reinvest into actively managed mutual funds. Avoid index funds, as they track markets without downside protection. Active funds adjust strategies in different cycles. For your retirement horizon, active funds will suit better.

» Role of Mutual Funds Ahead
Right now, you hold Rs. 10 lakhs in mutual funds. This amount is small compared to overall wealth. You must systematically build this further. Once real estate sales happen, channel big part into mutual funds. Direct funds may look cheap but lack professional support. Regular funds through a Certified Financial Planner provide discipline, rebalancing, and tracking. At your wealth level, advice and monitoring are more important than small cost savings.

» Fixed Deposits and Bank Balance
You hold Rs. 17 lakhs in FD and Rs. 6 lakhs in bank. These are good for emergency and short-term needs. But FD returns are low after tax. Only keep limited money here. Rest must move into growth assets for long term. Keep 6 to 9 months of expenses in liquid form. Excess must be shifted for higher growth.

» Insurance Cover
You have Rs. 1 crore term cover. Given your income and dependents, this may not be enough. Insurance must cover your income replacement till retirement. A higher cover can be considered. It should take care of your wife and children in case of uncertainty. Insurance is protection, not investment. Only term plan is needed.

» Tax Planning Considerations
Mutual fund taxation must be kept in mind. On equity funds, long-term capital gains above Rs. 1.25 lakhs are taxed at 12.5%. Short-term gains are taxed at 20%. For debt funds, gains are taxed as per slab. With your high income, slab rate is high. So allocation towards equity mutual funds through long term is beneficial. Tax-efficient investing will help you reach retirement corpus faster.

» Need for Disciplined Savings
Even with high income, discipline is key. Lifestyle inflation can eat savings. At least 35–40% of monthly income must go into investments. You must set up systematic investments. With consistent saving and compounding, plus proceeds from property sales, your goal is realistic. Avoid frequent withdrawals or distractions into unnecessary property or products.

» Risks of Real Estate Dependence
Real estate feels comfortable but is illiquid. Prices fluctuate with demand. Selling may take time. Rental yields are also low. For retirement, you need predictable income flow. That cannot come from property alone. Therefore, shifting into financial assets is crucial. This improves control and flexibility.

» Stock Holdings
You hold Rs. 3 lakhs in shares. This is small. Direct stocks carry higher risk. Unless actively tracked, they may not give consistent returns. Shifting more wealth into diversified mutual funds is safer. They spread risk across sectors and companies.

» Balancing Growth and Safety
From age 39 to 55, you have 16 years. This allows equity exposure for growth. As you near retirement, gradually shift part into debt for safety. This way, volatility reduces. At retirement, you need stability of income. A Certified Financial Planner can create balanced asset allocation. This ensures growth now and safety later.

» Retirement Income Strategy
At 55, you want Rs. 15 crore. If reached, this corpus can provide comfortable income. From that, you can create systematic withdrawal plan. Equity portion will keep growing, debt will provide stability. This balance will give monthly income without eroding capital too fast.

» Importance of Estate Planning
You also have ancestral wealth. Clear documentation with your brother is important. Later, you must prepare a Will. This will ensure smooth transfer of your wealth to your wife and children. Estate planning avoids disputes and ensures legacy.

» Health and Protection Needs
With age, health expenses rise. Having strong health insurance is must. You and your wife must have family floater with adequate cover. Additional top-up cover is also useful. Health costs can disturb retirement plans if not protected.

» Finally
You are on the right track with assets and income. Target of Rs. 15 crore at 55 is possible. The key is to:
– Sell ancestral house and plot as planned
– Channel proceeds into actively managed mutual funds
– Increase term insurance cover
– Keep only limited FD and cash for emergencies
– Build retirement corpus with discipline
– Balance equity and debt allocation
– Ensure health and estate planning

If you keep focus and discipline, your retirement dream is achievable well on time.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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