I am 39 and my wife is 36. Both at a good position and in a stable company with minimum 15 to 20% increment. Our earning is 7 lacs per month. Have 5 properties worth 8-9 crores. Have ppf with 1.5 lacs per year for us as well as our 2 kids (1.6 years and 10 years. Their pof started when they were 2 months). I have 20 lacs in equity shares too. No loans or emis to pay. We plan 2 international trips per year and want to continue it. We both plan to retire by 50. Any suggestions on investments or how we are doing?

Ans: Understanding Your Current Financial Position
You and your wife have a combined monthly income of Rs 4,50,000. This is a substantial income that can significantly contribute to your financial goals. Your current investments include Public Provident Fund (PPF), mutual funds, Life Insurance Corporation (LIC) policies, and fixed deposits (FDs). Additionally, you have a home loan of Rs 70 lakh. Your goal is to retire at the age of 55 with a retirement fund of Rs 15 crore.

Your current investment breakdown is as follows:

PPF: Rs 25,000 per month
Mutual Funds: Rs 70,000 per month (started two months ago)
LIC Policies: Rs 55,000 per year
Fixed Deposits: Rs 20 lakh
With 12 years left until your desired retirement age, it is essential to assess your financial strategy to ensure you meet your retirement goal.

Assessing Your Investments
Public Provident Fund (PPF)
PPF is a safe and tax-efficient investment option with guaranteed returns. The interest earned is tax-free, and the principal is secure. However, PPF has a lock-in period of 15 years, which may limit liquidity. Given your investment of Rs 25,000 per month, this is a good foundation for a stable, low-risk investment.

Mutual Funds
Your mutual fund investment of Rs 70,000 per month is a smart choice. Mutual funds offer potential for high returns, especially when invested for the long term. Since you've just started two months ago, it is crucial to stay consistent and review the performance periodically. Actively managed funds, compared to index funds, offer the advantage of professional management and the potential to outperform the market.

LIC Policies
LIC policies typically combine insurance and investment. These policies often provide lower returns compared to pure investment products like mutual funds. Considering your substantial premium of Rs 55,000 per year, it may be worth reassessing if these policies align with your retirement goals. You might consider surrendering these policies and reallocating the funds to more efficient investment vehicles.

Fixed Deposits (FDs)
FDs are a safe investment with guaranteed returns. However, the returns on FDs are often lower than other investment options, especially after adjusting for inflation. Your current investment in FDs is Rs 20 lakh. While it is good for liquidity, relying too heavily on FDs may not help you achieve your Rs 15 crore retirement goal efficiently.

Home Loan Considerations
A home loan of Rs 70 lakh is a significant liability. Paying off the loan before retirement is advisable to reduce financial stress during your retirement years. Ensure that you have a plan to manage this liability effectively, possibly by increasing EMI payments or making lump-sum prepayments when possible.

Recommendations for Future Financial Strategy
Increase Mutual Fund Investments
To achieve your retirement goal of Rs 15 crore, consider increasing your monthly mutual fund investments. Actively managed funds can provide higher returns over the long term. It would be beneficial to consult with a certified financial planner (CFP) to choose the right funds that align with your risk tolerance and financial goals.

Review and Reallocate LIC Policies
Evaluate your LIC policies critically. If they are not performing well or if the returns are not meeting your expectations, consider surrendering them. The funds from these policies can be better utilized in mutual funds or other high-return investments.

Reduce Fixed Deposit Holdings
Fixed deposits provide security but offer lower returns. Consider reducing your holdings in FDs and reallocating some of these funds to mutual funds or other growth-oriented investments. This will help in generating higher returns in the long run.

Utilize Tax-efficient Investment Options
Tax planning is an essential aspect of investment. Maximize the use of tax-efficient instruments like PPF, Equity Linked Savings Schemes (ELSS), and National Pension System (NPS). These instruments not only provide tax benefits but also help in building a substantial corpus over time.

Emergency Fund
Ensure you have an adequate emergency fund. This fund should cover at least 6-12 months of your household expenses. An emergency fund is crucial to handle unexpected financial challenges without disrupting your investment strategy.

Importance of Regular Financial Review
Regularly reviewing your financial plan is vital. Market conditions, interest rates, and personal circumstances change over time. A certified financial planner can help you stay on track with periodic reviews and adjustments to your investment strategy.

Professional Guidance
While you may have a good understanding of financial products, professional guidance can provide a structured approach. A certified financial planner can offer personalized advice, helping you optimize your investments and ensure that your financial goals are met.

Planning for Retirement Lifestyle
Your retirement planning should also consider the lifestyle you wish to maintain. Factor in inflation and rising costs of living. Your retirement corpus of Rs 15 crore should be able to sustain your lifestyle for 25-30 years post-retirement.

Healthcare Costs
Healthcare is a significant expense during retirement. Ensure you have adequate health insurance coverage. This will protect your retirement corpus from being depleted by medical expenses.

Long-term Care
Consider the potential need for long-term care or support services in your retirement planning. Including these costs in your financial plan will provide a more realistic picture of your retirement needs.

Creating a Diversified Portfolio
Diversification reduces risk and improves the chances of achieving stable returns. A balanced portfolio with a mix of equity, debt, and other assets can provide stability and growth. Ensure that your investment strategy includes a diversified approach.

Equity Investments
Equity investments, particularly through mutual funds, can provide high returns. Over the long term, equities tend to outperform other asset classes. Maintain a significant portion of your portfolio in equities to achieve your retirement goal.

Debt Investments
Debt investments, such as PPF and bonds, provide stability and regular income. These investments are less volatile compared to equities and can be a good counterbalance in your portfolio.

Gold and Other Commodities
Gold can act as a hedge against inflation. Including a small portion of your portfolio in gold or gold-related investments can provide diversification and protection against economic uncertainties.

Evaluating Investment Performance
Consistently monitor and evaluate the performance of your investments. This will help in identifying underperforming assets and making necessary adjustments. Use performance benchmarks and compare the returns of your investments with industry standards.

Conclusion
Achieving a retirement corpus of Rs 15 crore is a challenging but achievable goal. By increasing your mutual fund investments, reassessing LIC policies, reducing reliance on fixed deposits, and regularly reviewing your financial plan, you can stay on track to meet your retirement objectives.

Your disciplined approach to saving and investing, coupled with professional guidance, will ensure a secure and comfortable retirement. Stay focused, stay informed, and make adjustments as necessary to adapt to changing circumstances.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: First, I want to commend you and your wife for being financially proactive and disciplined. Your combined monthly income of Rs. 3.50 lakhs and structured investments show a solid foundation. Your goal to retire by 50 with an income of Rs. 1.5-2 lakhs per month is achievable with strategic planning. Let’s explore how you can optimize your current finances to reach this goal.

Current Financial Snapshot
House Loan:

Outstanding loan: Rs. 15 lakhs
EMI: Rs. 15,000 per month
PPF Accounts:

Combined balance: Rs. 7 lakhs
Monthly investment from July 2024: Rs. 12,500 each (total Rs. 25,000)
Mutual Funds:

Lump sum: Rs. 2 lakhs and Rs. 3 lakhs
Monthly SIP: Rs. 10,000 in equity and debt
Properties:

One rental property generating Rs. 12,500 per month
Primary residence
Fixed Deposits:

Total: Rs. 20 lakhs
Emergency Fund:

Total: Rs. 5 lakhs
NPS Accounts:

Annual contribution: Rs. 50,000 each (total Rs. 1 lakh)
Term Insurance:

Sum assured: Rs. 1 crore each
Provident Fund:

Combined balance: Rs. 25 lakhs
With this strong financial base, let’s assess how to align your assets and investments towards your retirement goal.

Setting Clear Retirement Goals
Your goal is to retire at 50, with a steady monthly income of Rs. 1.5-2 lakhs. To achieve this, we need to:

Estimate Retirement Corpus:

We need to calculate how much you’ll need to generate Rs. 1.5-2 lakhs per month, considering inflation and longevity.
Optimize Current Investments:

Evaluate and adjust your current investments for growth and stability.
Increase Investment Contributions:

Plan to increase your savings and investments to meet the desired retirement corpus.
Estimating Your Retirement Corpus
Assuming you need Rs. 1.5-2 lakhs per month in today’s terms, we must account for inflation. Typically, a 6-7% annual inflation rate is reasonable for long-term planning.

Inflation-Adjusted Income:

Rs. 1.5 lakhs today will be much higher in 15 years due to inflation. For example, at 6% inflation, Rs. 1.5 lakhs will be around Rs. 3.6 lakhs in 15 years.
Corpus Calculation:

To generate Rs. 3.6 lakhs per month, you need a substantial retirement corpus. Typically, using a safe withdrawal rate of 4-5%, you’ll need a corpus of approximately Rs. 9-10 crores.
Optimizing Your Current Investments
To build this corpus, let’s review and optimize your existing investments and strategies.

Paying Off the Home Loan
Low-Interest Priority:

Your home loan of Rs. 15 lakhs with an EMI of Rs. 15,000 is manageable. If the interest rate is low, continue paying the EMI. Use surplus funds for higher growth investments rather than prepaying the loan.
Focus on Higher Returns:

Redirecting extra money towards investments with higher returns than your loan’s interest rate can be more beneficial.
Leveraging PPF Accounts
Consistent Contributions:

You plan to invest Rs. 25,000 per month in PPF. This provides safe, tax-free returns, which is great for a portion of your portfolio. Continue these contributions for stability and security.
Long-Term Growth:

PPF’s tax-free nature and stable returns make it a strong long-term investment. It’s perfect for balancing your riskier investments.
Enhancing Mutual Fund Investments
Review Lump Sum Investments:

Your Rs. 2 lakhs and Rs. 3 lakhs in mutual funds need reviewing. Ensure these funds are aligned with your risk tolerance and goals. Prefer funds with a good track record of consistent returns.
Increase SIPs:

You currently invest Rs. 10,000 monthly in SIPs. To meet your retirement goals, consider increasing your SIPs gradually. Target Rs. 20,000-30,000 monthly as your income allows.
Focus on Growth:

Prioritize equity mutual funds for higher returns, balanced with some debt funds for stability. Actively managed funds can outperform index funds, providing better growth potential.
Fixed Deposits and Emergency Fund
Emergency Fund:

Your Rs. 5 lakhs emergency fund is excellent. It’s crucial to keep this liquid and accessible. This provides security and peace of mind.
Reassess Fixed Deposits:

With Rs. 20 lakhs in FDs, you have stability, but returns may be lower. Consider reallocating a portion to higher-yielding investments, keeping some for short-term needs and safety.
NPS Contributions
Tax Benefits:

Your annual Rs. 50,000 each in NPS is beneficial for tax savings and retirement planning. Continue these contributions for long-term retirement benefits.
Growth Potential:

NPS offers good growth with a mix of equity and debt. It’s a great supplement to your retirement corpus, providing steady growth and tax benefits.
Investment Strategy to Achieve Retirement Goals
To retire comfortably by 50, focus on growing your wealth while managing risks. Here’s a strategic plan:

Maximize Equity Exposure:

At your age, focus on equity investments for higher growth. Increase your SIPs in equity mutual funds and ensure a diversified portfolio.
Rebalance Periodically:

Regularly review and rebalance your portfolio to stay aligned with your goals. Adjust allocations based on market conditions and your risk tolerance.
Leverage Professional Management:

Actively managed funds can provide higher returns through expert stock selection and management. Consider funds with good track records and professional managers.
Increase Contributions Over Time:

As your income grows, gradually increase your SIPs and other investments. Aim to invest a larger portion of your salary towards your retirement corpus.
Utilize Tax-Efficient Investments:

Maximize contributions to PPF and NPS for tax savings. Also, consider tax-efficient mutual funds and equity investments.
Diversify Across Asset Classes:

Balance your portfolio with a mix of equities, debt, and safe instruments like PPF and FDs. Diversification reduces risk and enhances returns.
Managing Risks and Ensuring Stability
Risk management is crucial in your journey towards early retirement. Here’s how you can mitigate risks while pursuing your goals:

Adequate Insurance Coverage:

Your term plans of Rs. 1 crore each provide a safety net for your family. Ensure you have adequate health insurance to cover medical emergencies.
Emergency Fund Maintenance:

Keep your Rs. 5 lakhs emergency fund intact. This protects against unexpected expenses without disturbing your investments.
Regular Financial Check-Ups:

Periodically review your financial plan and investments. This helps in adapting to changing circumstances and staying on track.
Plan for Inflation:

Consider the impact of inflation on your retirement needs. Ensure your investments grow faster than inflation to maintain purchasing power.
Building a Sustainable Retirement Plan
Creating a sustainable retirement plan involves both growing your corpus and planning for a stable income post-retirement. Here’s how:

Target a Diversified Corpus:

Aim for a retirement corpus that includes a mix of equity, debt, and fixed-income investments. This provides growth and stability.
Consider Systematic Withdrawal Plans:

Post-retirement, consider using Systematic Withdrawal Plans (SWPs) from mutual funds to generate a steady income. This allows you to withdraw money systematically while keeping your capital invested and growing.
Explore Annuity Options:

Though not the focus, evaluate annuities for a portion of your retirement corpus for guaranteed income. They provide stability and reduce the risk of outliving your savings.
Maintain a Balance Between Safety and Growth:

As you approach retirement, gradually shift to safer investments to protect your corpus while keeping some exposure to growth assets.
Final Insights
Your goal to retire at 50 with a monthly income of Rs. 1.5-2 lakhs is ambitious but achievable. Here’s a summary of how to work towards it:

Focus on Equity for Growth:

Increase your equity investments through SIPs and lump-sum mutual fund investments. This provides the growth needed to build a large corpus.
Maintain Diversification and Stability:

Balance your portfolio with PPF, FDs, and NPS for stability and tax benefits. Keep your emergency fund intact for security.
Increase Investments Over Time:

Gradually increase your investment contributions as your income grows. This accelerates your wealth-building process.
Leverage Professional Management:

Utilize actively managed mutual funds and the expertise of Certified Financial Planners. They help in optimizing your investments and staying on track.
Regularly Review and Rebalance:

Periodically review your financial plan and investments. Rebalance your portfolio to stay aligned with your goals and risk tolerance.
Starting early and maintaining a disciplined approach will lead you to a comfortable and financially secure retirement at 50. Your proactive steps today will pave the way for a fulfilling and worry-free future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You both earn well and invest consistently. That’s a great habit.

Let’s create a full financial strategy to help you retire by 50 and stay financially secure.

Let us plan every part step by step.

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Understanding Your Current Position

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You both are in a high-earning phase. It is the right time to invest more.

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RSUs worth Rs. 1 crore give you a good buffer. But don’t rely only on this.

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Your SIP of Rs. 1.5 lakh per month is a very strong start.

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EPF of Rs. 30 lakh and LIC maturity in 2031 adds safety to your long-term planning.

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Two flats worth Rs. 1.2 crore are part of your net worth. But don’t expect much return.

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You have shared a goal to retire by 50. That gives you 15 years to build the right plan.

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Planning for a child within a year means new expenses will come soon.

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Review of Your Mutual Fund SIP Portfolio

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You are doing Rs. 90K in large cap, Rs. 15K in mid cap, and Rs. 45K in small cap.

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The small cap portion is high. That increases the risk.

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In a retirement-focused plan, small cap should be under 20% of equity allocation.

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Mid cap should be 30%. Large cap can be 50% or more.

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High small cap exposure may lead to sharp losses in market corrections.

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Shift 15K from small cap to large or mid cap, slowly over the next 6-9 months.

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Stick with actively managed mutual funds through a Certified Financial Planner.

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Avoid direct plans. You may miss portfolio review, rebalancing, and goal tracking.

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Regular funds with an MFD and CFP guide will give you better control and support.

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FD and LIC Policy Review

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Rs. 10 lakh is invested in LIC and FD maturing in 2031.

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Check if your LIC policy is an investment product or pure term cover.

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If it is a money-back or endowment plan, you should surrender it.

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Surrender value should be reinvested in diversified mutual funds.

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You can build more wealth through mutual funds than through LIC plans.

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FD is okay for short-term parking. But not ideal for long-term wealth creation.

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Don’t extend FD beyond 1-2 years unless it is an emergency buffer.

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EPF Evaluation

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Rs. 30 lakh in EPF is a good base for retirement planning.

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Don’t withdraw EPF until full retirement. It is tax-free and grows steadily.

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Even if job changes happen, transfer EPF, do not withdraw.

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Do not treat EPF as a fallback for child education or marriage.

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It is your core retirement capital. Let it grow undisturbed.

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Review of RSUs and Equity Exposure

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RSUs are risky if your company stock goes down. You are also employed there.

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Sell 25% of vested RSUs every year and invest in mutual funds.

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This gives you diversification and reduces company concentration risk.

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Many employees ignore this and get affected if stock prices fall suddenly.

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Treat RSU value as bonus and shift to long-term investments.

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Asset Allocation Strategy

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You need a clear ratio between equity, debt, and cash.

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You can follow 65% in equity, 25% in debt, 10% in liquid or short term.

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Adjust this every year based on your changing goals.

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Equity can include mutual funds and stocks from RSU proceeds.

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Debt can be PPF, debt mutual funds, EPF, and fixed income options.

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Liquid can be FD or liquid funds for emergency or upcoming use.

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Rebalancing yearly helps in keeping the risk under control.

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Emergency Fund and Insurance Needs

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Keep at least Rs. 6 to 8 lakh in an emergency fund.

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Use liquid funds or short-term FD for this.

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Buy term life insurance of Rs. 2 crore for each of you.

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Buy health insurance of Rs. 10 lakh floater policy for the family.

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These covers will give peace of mind when you have children.

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Don’t depend on employer cover alone. Take your own private policies.

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Children Planning and Future Goals

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Having a child brings new costs for education, medical, and lifestyle.

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Start SIP in mutual funds for education goal from year one itself.

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Monthly SIP of Rs. 10,000 to Rs. 15,000 will help build an education corpus.

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For marriage, start a SIP separately after 3 years.

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Keep goal-wise funds separate. Don’t mix it with retirement or RSUs.

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This will help you track progress better.

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Retirement Planning to Retire at 50

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You both are 35 and 32. You want to retire in 15 to 18 years.

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You need to plan for 40 years of retirement after that.

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Use current savings, SIPs, EPF, and RSUs to create a retirement fund.

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You will need Rs. 7 to 8 crore in current value to retire comfortably.

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Adjust this for inflation and target at least Rs. 12 crore by age 50.

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Your current SIP of Rs. 1.5 lakh is a strong start.

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Try to increase it by 8% to 10% every year.

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Add bonus, RSU proceeds, or surplus to your retirement corpus every year.

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Use a Certified Financial Planner to create a goal-based retirement strategy.

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Don’t rely only on SIP. You need a full plan including withdrawal strategy after retirement.

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Handling Real Estate

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You own two flats worth Rs. 1.2 crore.

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These can be used for self-usage. But not as investment return tools.

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Don’t expect these to fund your retirement.

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You cannot liquidate easily. Returns are low. Maintenance cost is high.

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Stay away from further real estate purchases.

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Use mutual funds for long-term wealth building.

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Tax Planning and Capital Gains Awareness

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Mutual funds have new capital gains rules from April 2024.

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Equity mutual fund LTCG above Rs. 1.25 lakh is taxed at 12.5%.

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STCG on equity mutual funds is taxed at 20%.

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For debt mutual funds, LTCG and STCG are taxed as per income slab.

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Plan your redemptions wisely to reduce tax burden.

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Withdraw during years when income is low, like during sabbatical or early retirement.

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Use a tax-saving mutual fund (ELSS) to save under Section 80C if needed.

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Yearly Review and Portfolio Rebalancing

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Every year, sit with a Certified Financial Planner and review your full portfolio.

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Check your SIP performance. Shift from underperforming funds.

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Rebalance between equity and debt if market grows or corrects sharply.

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Check goal progress and increase SIP if required.

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Update insurance needs, emergency fund, and lifestyle changes.

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Keep your financial plan flexible and updated.

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Future Income Planning and Passive Sources

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Think of part-time income or freelance income after retirement.

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You can explore consultancy or mentorship in your sales domain.

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This adds extra safety and cash flow post-retirement.

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Plan your lifestyle to be modest and cost-effective after 50.

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Avoid costly hobbies, loans, or luxury plans post-retirement.

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Keep your withdrawal rate under control.

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Finally

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You are earning well. Your savings habits are excellent.

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RSUs, SIPs, and EPF give you a solid foundation.

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Real estate should be kept as usage-only, not investment.

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Reduce small cap exposure slowly. Stick to active mutual funds via CFP.

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Surrender LIC investment plans. Invest that in good mutual funds.

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Build separate SIPs for child education, marriage, and retirement.

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Increase SIPs every year. Redeem RSUs yearly to reduce risk.

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Keep insurance and emergency fund updated.

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With discipline and yearly review, you can retire by 50 peacefully.

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Let a Certified Financial Planner help you optimise and stay on track.

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

Ans: You both are doing very well. Your income, savings and investment habits show great discipline.

Let’s now look at your current strategy, assess its safety, and build a 360° plan for retirement at age 50.

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Income and Lifestyle Management

Your annual post-tax income is around Rs. 50–55 lakhs. That is a strong base.

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Please try to maintain expenses within 40–45% of total income.

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Keep lifestyle inflation under check. This protects long-term savings growth.

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Avoid large loans or EMIs. Especially with retirement planned early.

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If lifestyle inflates with income, wealth building will slow down.

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Create a clear budget with savings goals first, expenses second.

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Use surplus income mindfully. Direct it into goal-based investment buckets.

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Review both your CIBIL scores. Keep them above 750 for financial flexibility.

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Emergency Fund and Risk Protection

Emergency fund is very important. It should cover 6 months’ expenses.

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Keep this in liquid mutual funds or sweep-in FD. Avoid idle cash.

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Ensure both of you have health cover above Rs. 25 lakhs as a floater.

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Include a Rs. 50–75 lakh personal health policy, not just employer coverage.

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Take term insurance of Rs. 1.5–2 crore each. No returns needed. Pure cover.

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Avoid investment-based insurance. They give poor returns with high costs.

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LIC and ULIPs, if held, should be reviewed. Likely best to surrender.

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Reinvest maturity from LIC into mutual funds via Certified Financial Planner.

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Mutual Funds and SIP Allocation

Your SIP of Rs. 1.5 lakh/month is very strong and well-disciplined.

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You invest Rs. 60K in large cap. That’s slightly high allocation.

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Large caps give stable returns, but growth is slower than others.

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Rs. 30K in small cap is fine. But monitor for volatility. Reduce if needed.

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Rs. 10K mid cap can be increased slightly for better balance.

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You may adjust to 40K large, 30K mid, 30K small, 50K flexi-cap.

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Do not choose index funds. They lack flexibility during market falls.

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Actively managed funds can control downside better than index funds.

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Invest through regular plans via an MFD with CFP credential.

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Avoid direct mutual fund plans. They lack handholding and strategy review.

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Direct funds can reduce advisor support. Regular plans bring value through planning.

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Maintain SIP discipline for the next 15 years. Returns will compound well.

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EPF and Fixed Income Assets

You have Rs. 30 lakh in EPF. This is your stable long-term base.

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Keep contributing to EPF. Don’t withdraw before retirement.

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EPF gives safety and tax efficiency. A good hedge to equity volatility.

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Rs. 10 lakh in FD and LIC is fine. But FDs reduce real value over time.

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Returns after tax and inflation are usually negative.

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Shift matured FD money to conservative mutual funds or hybrid debt funds.

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These funds give better post-tax returns than FDs.

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Monitor FD and LIC maturity plans. Redeploy into flexible and liquid assets.

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Equity Stocks and RSUs

Rs. 15 lakh in direct stocks is manageable. Keep it under 10–15% of net worth.

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Monitor RSU concentration. Rs. 1 crore is high exposure to one company.

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Don’t let RSUs go above 20–25% of total net worth.

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Periodically liquidate RSUs. Redeploy proceeds to mutual funds.

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This reduces company-specific risk. Also helps in portfolio diversification.

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Stock market investments should be reviewed yearly.

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Avoid frequent trading. Long-term holding builds wealth.

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RSU tax treatment must be understood clearly. Use CFP to plan tax-efficient exits.

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Real Estate Ownership

You have 2 apartments worth Rs. 1.2 crore. That’s sufficient for living.

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Do not invest further in real estate. Liquidity is low. Returns are slow.

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Real estate ties up money for long and lacks flexibility.

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Maintain these 2 houses. Don’t add more unless for own use.

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Real estate should not be core of retirement corpus.

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Use mutual funds and retirement-focused tools to build real wealth.

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Child Planning and Future Responsibilities

As you plan for a child, prepare financially for education and care.

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Begin a child education fund through dedicated mutual funds.

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Create a SIP goal with 10–15 years target for college funding.

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Review your term insurance coverage once child is born.

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Prepare a will once child arrives. Nominate all your assets properly.

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Begin Sukanya Samriddhi if girl child is born. Invest monthly for safety.

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Keep child healthcare and schooling funds liquid and accessible.

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Retirement Planning at Age 50

You want to retire by age 50. That gives you 15 years more to save.

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Your savings rate is excellent. But retirement needs disciplined strategy.

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First, estimate future expenses after retirement. Then add 5–6% inflation.

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You will need 30–35 years of retired life fund.

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Total retirement corpus must be built by age 50.

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Create retirement buckets – Safety, Growth, Liquidity, Income.

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EPF and PPF will form Safety.

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Mutual funds will build Growth.

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Conservative hybrid funds will give Liquidity.

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SWP from mutual funds will support Income.

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Don’t depend on rental income. Expenses may not match rental flow.

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Review your mutual fund portfolio every 6 months.

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Use XIRR to measure SIP performance.

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Slowly move part of equity to hybrid or debt as you near 50.

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Maintain equity till 45 years. After that, shift slowly to safety buckets.

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Retirement planning must have tax efficiency, safety and liquidity.

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Work with a Certified Financial Planner for regular check-ins.

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Tax Management and Optimisation

Invest in NPS for extra Rs. 50,000 tax benefit. But don’t over-allocate.

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NPS should not exceed 10–15% of retirement portfolio.

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Equity mutual funds are taxed on gains above Rs. 1.25 lakh/year at 12.5%.

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STCG is taxed at 20%. So avoid selling before 1 year if not needed.

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Debt funds are taxed as per slab. Plan redemptions carefully.

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Plan to stagger mutual fund exits in retirement to manage tax load.

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Use HUF, senior citizen benefits and joint accounts to optimise taxes later.

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Estate Planning and Asset Protection

Write a will for both spouses. Include all assets and nominations.

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Make sure each asset has proper joint names or nominations.

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Use separate lockers and record all documents securely.

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Create a master asset list every year. Share with trusted family.

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Use joint demat, joint mutual fund folios for smooth transmission.

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Investment Risks and Safety Check

You are fairly safe currently. But exposure to company RSUs is high.

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Real estate can reduce liquidity in case of emergency.

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Direct stocks can give high risk and low returns if unmanaged.

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Safety is stronger with balanced mutual funds and debt allocation.

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Keep checking your portfolio balance every 6 months.

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Use a Certified Financial Planner to assess asset quality and goal match.

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Don’t use random online tips or short-term investment trends.

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Create written goals with timelines and corpus targets.

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Tag each investment to a specific goal like child education, retirement, etc.

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Review Strategy for Next 15 Years

Stay on SIP mode till at least age 45–47.

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Reduce equity only slowly after that.

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At 50, 30–40% in equity, 60% in debt and hybrid is safe mix.

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Don’t try to beat markets. Be consistent with strategy.

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Prioritise peaceful, stress-free retired life over highest returns.

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Plan early exits from RSUs and stock holdings for safety.

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Avoid property investments or large loans from now on.

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Include health, insurance and emergency buffers in all plans.

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Make financial reviews a yearly habit.

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Automate savings. Manual investing leads to delays.

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Finally

You both have built a strong base. Savings, equity exposure and SIPs are in place.

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The next steps are discipline, de-risking, tax-efficiency and goal tagging.

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Early retirement is achievable if you continue current pace and correct excess risks.

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Work closely with a Certified Financial Planner for yearly strategy correction.

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Make retirement peaceful and planned. Not reactive or rushed.

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This is possible. You are already ahead of most.

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Keep your focus. Avoid unnecessary complexity.

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Build clarity, safety and long-term wealth. That’s the goal.

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

Ans: Hi,

Things sound good on paper. Let us analyse them here one by one:

- 1 crore bank FD. Good to go. But can reduce it to 75 lakhs and redirect 25 lakhs to mutual funds to fund your retirement. 75 lakhs can be treated as your emergency fund.
- Term Insurance of 2 crores for you is good. Your wife should also have some term insurance worth 1 to 1.5 crores.
- Health insurance - make sure it is in place before you guys retire. Take a base policy of about 25 lakhs along with a super top up of 1 crore.
- Is your RD of 2.5 lakhs linked to a particular goal? If no, can stop it and redirect the same to build your retirement portfolio in hybrid mutual funds.
- LIC - not sure if that is a good option as usually these policies generate an XIRR of 4-5% which is even less than FD. You need to explore other option which gives you better returns.
- Residential EMI free property and land provides you security and a rent-free retirement/ future.
- 1 crore worth demat shares - amazing if you have researched well. If you are considering retirement and do not know much about market and research, can liquidate 50% of these to fund your retirement in the form of mutual funds.
- 2.5 lakhs SIP for 5 years along with current 35 lakhs MFs can give you 2.3 crores for your retirement.

Post retirement - after 5 years, your immediate expenses can be taken care by your PF which will fund your life for 5 years.
In the meantime, your entire portfolio can be redesigned into a mix of debt, hybrid and equity funds which can help in a comfortable retired life.

25 lakhs from your FD can be invested in equity funds for your kids higher education. In addition, can invest 1 lakh per month from your RD towards this goal.

Let me know if you need any more help. Also it would be great for you to consult a professional Certified Financial Planner - a CFP who can guide you with exact financial plan for you with fund names in it to invest in keeping in mind your age, requirements and risk profile.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/