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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 10, 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 - Jun 25, 2025Hindi

I am 40 years old .I have 30 lakhs equity mutual fund.18 laksh ppf and 20 lakhs fd and 2 lakhs nps ,25 lakhs pf and vpf .I want to get 1.5 lakhs pm after my retirement,is it possible .don't have any loans

Ans: ? Age and Retirement Income Goal – A Clear Target Ahead
– You are 40 years old now.
– Your goal is to retire with Rs 1.5 lakhs monthly income.
– That equals Rs 18 lakhs annually.
– You are aiming for financial independence.
– The goal is strong, but must be backed by strategy.

? Existing Investments – Good Start but Needs More
– Rs 30 lakhs in equity mutual funds.
– Rs 20 lakhs in fixed deposit.
– Rs 18 lakhs in PPF.
– Rs 25 lakhs in PF + VPF.
– Rs 2 lakhs in NPS.
– You have no loans. That is excellent.
– Total corpus now is Rs 95 lakhs.
– At 40, this is a positive achievement.
– But more action is needed to reach retirement target.

? Retirement Expense Projection – Adjusting for Inflation
– Rs 1.5 lakhs today may become Rs 3 lakhs later.
– You may retire after 15–20 years.
– Inflation will increase all costs.
– Especially medical and lifestyle expenses.
– Your target corpus must be adjusted for this rise.
– That means you need a much larger retirement fund.

? Investment Style – Balanced but Requires Restructuring
– Your equity mutual fund amount is good.
– You are already using long-term growth assets.
– But you may need to improve fund selection.
– Direct mutual funds don’t offer advisory support.
– Shift to regular plans via MFD with CFP credential.
– That helps track, review, and improve consistently.
– Avoid index funds if you are holding any.
– Index funds don’t beat the market.
– They just copy it with no flexibility.
– In India, actively managed funds are more effective.

? Equity Mutual Fund Strategy – Core for Long-Term Wealth
– Your equity corpus should keep growing every year.
– SIPs must be continued and increased with income.
– Shift lump sum in FD to mutual funds using STP.
– Don’t invest entire amount at once.
– Spread it out in 12–18 months using liquid fund.
– Choose large-cap, flexi-cap, and multi-cap funds.
– Include hybrid funds if needed.
– Don’t touch equity funds for short-term use.
– Let them compound quietly for 15–20 years.

? PPF, PF and VPF – Safe but Slow
– Your PPF and PF total is Rs 43 lakhs.
– These are useful for stability.
– But they grow at slow pace.
– And returns are taxable in some cases like VPF interest.
– Continue contributing to PF.
– But focus new investments more on equity.
– Don’t treat PPF as retirement corpus alone.
– It should be part of debt allocation only.

? FD – Not a Wealth Creator
– Rs 20 lakhs in FD gives low returns.
– Interest is fully taxable.
– It cannot beat inflation over 15 years.
– FD is good only for short-term or emergencies.
– Slowly move surplus from FD to mutual funds.
– Don’t keep idle money locked at 6–7% return.
– You will lose growth opportunity.

? NPS – Tiny Allocation Needs Boost
– Rs 2 lakhs in NPS is too low.
– You can use it for additional retirement planning.
– But don’t depend only on it.
– Withdrawals are partially taxed at retirement.
– Mutual funds offer more liquidity and flexibility.
– Keep NPS contribution within tax limit section 80CCD(1B).

? Monthly Investment Plan – Bridge the Gap
– Your current corpus is good.
– But not enough for Rs 1.5 lakhs per month.
– You must grow your corpus to Rs 5–6 crores.
– That is needed to generate Rs 18 lakhs income per year.
– Invest minimum Rs 70,000 to Rs 1 lakh monthly now.
– Mix SIPs and STPs from existing FD funds.
– Make equity your core growth engine.
– Use regular mutual fund route with MFD and CFP.
– Keep increasing SIP every year by 10–15%.

? Health Insurance – Protect the Retirement
– Medical cost is the biggest risk after retirement.
– Don’t rely only on employer health cover.
– Take a family floater health insurance policy.
– Choose coverage of minimum Rs 10–15 lakhs.
– Buy early for lower premium.
– Include critical illness cover if possible.

? Asset Allocation – Long-Term Discipline Needed
– Maintain 70% in equity mutual funds.
– 20% in PPF, PF, or debt funds.
– 10% in gold or hybrid assets.
– Don’t add more in FD.
– Avoid further real estate or land buying.
– Real estate is not liquid or tax-efficient.
– You will not get regular income from it in retirement.

? Retirement Planning Phases – Structured Thinking
– Phase 1 (Age 40–50):

Aggressively grow investments.

Increase SIPs and reduce FD.

Don’t withdraw from equity.
– Phase 2 (Age 50–60):

Focus on rebalancing.

Increase debt portion gradually.

Prepare for income planning.
– Phase 3 (Post 60):

Start withdrawal from mutual funds.

Use SWP from hybrid or equity savings fund.

Withdraw from PF and PPF in planned way.

? Tax Planning – Keep More in Your Hands
– Mutual fund taxation rules are changing.
– LTCG above Rs 1.25 lakhs taxed at 12.5%.
– STCG taxed at 20%.
– For debt funds, gain is taxed as per your slab.
– Plan withdrawals and switches smartly.
– Don’t trigger gains unnecessarily.
– Avoid yearly redemptions unless needed.
– Use SWP structure in retirement.

? Investment Mistakes to Avoid – Stay Focused
– Don’t overinvest in FDs or post office schemes.
– Avoid traditional LIC or ULIP plans.
– Don’t go for index funds.
– They don’t offer downside protection.
– Don’t choose direct mutual fund plans.
– They lack rebalancing support.
– Use regular funds through MFD with CFP.
– Don’t delay health insurance.
– Don’t withdraw from equity too early.
– Don’t chase high-risk stocks or schemes.

? What You Should Do Now – Step by Step
– Review all your existing equity mutual funds.
– Exit index funds if any.
– Shift from direct plans to regular plans.
– Set up STP from FD to equity mutual fund.
– Increase SIPs to Rs 75,000 minimum per month.
– Take separate term insurance if not already taken.
– Buy health insurance for self and family.
– Fix Rs 1.5 lakh monthly as goal in today’s value.
– Adjust for inflation and project Rs 3 lakhs needed.
– Plan to build corpus of Rs 5–6 crores by age 58.
– Review and rebalance every year with help.
– Track progress towards the retirement goal.

? Finally
– You are on the right track at age 40.
– You have already built Rs 95 lakhs corpus.
– Keep the momentum with higher monthly investments.
– Shift idle FD into equity slowly and wisely.
– Restructure your mutual fund portfolio with expert guidance.
– Stay invested for the long term.
– Don’t take breaks or stop SIPs midway.
– Focus on your goal of Rs 1.5 lakh per month.
– Keep health and insurance protection in place.
– Keep tracking and adjusting every year.
– That is the way to build financial freedom.

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

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