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Ramalingam

Ramalingam Kalirajan  |7253 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 16, 2024

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 - May 15, 2024Hindi
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I am 41 years of age, i am invested about 40 Lakhs in stocks and about 60 Lakhs of total corpas in mutual funds which includes Rs.15,000 for HDFC balanced fund, Rs. 15,000 towards HDFC Top 100 and Rs.30,000 toward mirae asset large cap fund and Rs. 20,000 towards axis small cap fund and Rs 20,000 towards UTI index fund. Apart from this i have a FD of Rs.1Cr, sovereign gold bond of 5 lakhs and Rs. 30 Lakhs towaeds corporate bonds. I would like to retire by 45 with with monthly income of Rs. 1.5 lakhs. Please evaluate and tell me will i be able to achieve this

Ans: Embarking on the journey towards early retirement at 45 with a monthly income target of ?1.5 lakhs necessitates a thorough evaluation of your current financial portfolio and its alignment with your retirement aspirations.

Reviewing Your Current Investment Allocation
Your investment portfolio exhibits a diverse mix of assets, including stocks, mutual funds, fixed deposits (FDs), sovereign gold bonds, and corporate bonds. This diversified approach reflects a prudent strategy towards wealth accumulation and risk management.

Assessing the Suitability of Investment Choices
Your allocation towards stocks and mutual funds, totaling ?1 crore, signifies a substantial exposure to equity markets, which offer the potential for higher returns over the long term. However, it's essential to ensure that this allocation aligns with your risk tolerance and investment horizon.

Analyzing the Retirement Income Requirement
With a targeted monthly income of ?1.5 lakhs post-retirement, we must evaluate whether your current portfolio can generate sufficient passive income to meet this goal. This assessment involves projecting the potential income streams from your existing investments and identifying any gaps that need to be addressed.

Evaluating Retirement Readiness
Given your age of 41 and the desired retirement age of 45, it's crucial to ascertain whether your current savings and investment trajectory can facilitate an early retirement while sustaining your desired lifestyle. This evaluation entails stress-testing your retirement plan against various scenarios, including market volatility and inflationary pressures.

Crafting a Retirement Strategy
To bridge any potential income shortfall and bolster your retirement corpus, we may need to explore additional avenues for wealth accumulation. This could involve increasing your contributions to equity-oriented investments, optimizing tax-efficient strategies, and diversifying into alternative income-generating assets.

Providing Personalized Retirement Solutions
As a Certified Financial Planner, I specialize in tailoring bespoke retirement solutions that cater to your unique financial circumstances and aspirations. By leveraging a combination of investment vehicles, tax planning strategies, and retirement income streams, we can devise a robust plan to achieve your early retirement objective with confidence.

Conclusion: Striving Towards Financial Freedom
In conclusion, achieving early retirement at 45 with a monthly income of ?1.5 lakhs requires a strategic blend of prudent investing, diligent planning, and proactive portfolio management. Through a collaborative approach and personalized guidance, we can navigate the path to financial freedom, ensuring a secure and fulfilling retirement lifestyle for you.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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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Ramalingam

Ramalingam Kalirajan  |7253 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 07, 2024

Asked by Anonymous - May 07, 2024Hindi
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Hi, I am a 35y old single Male. My target is to retire at 50 with a corpus of 25 Crores. Currently, the worth of my portfolio is 1.25 Crore with 75 lakhs in MFs, 25 lakhs in NPS, 10 lakh in PPF, 10 lakh in SGB and about 5 lakhs in Cash and Stocks. My monthly investment is 90k in MFs and annual investment in PPF and SGB is 1.5 lakhs each. I have a 2Bhk house in Pune and my after-tax salary is 2 lakhs/month. My company takes care of my accommodation and my regular monthly expenses are about 50k/month. Do you want to suggest any other plans or am I doing alright keeping my goal in mind? Currently, the MFs are weighted about 50% Small cap, 25% Mid and flexi cap and 25% Large cap.
Ans: Your dedication to financial planning is commendable, especially with a clear retirement goal in mind. Let's delve into your current situation and discuss potential adjustments:

Your current portfolio allocation seems well-diversified, with a significant portion invested in mutual funds, NPS, PPF, SGB, and some cash and stocks. This mix offers a balance of growth and stability.

Your monthly investments and annual contributions to PPF and SGB reflect a disciplined savings approach. It's crucial to maintain this consistency to achieve your retirement target.

Your 2BHK house in Pune is an asset that adds to your net worth and provides security. It's great that your company covers your accommodation expenses, easing your financial burden.

With your after-tax salary and monthly expenses, you have a surplus for investments, which is a positive sign. It's essential to ensure that this surplus is utilized efficiently towards your retirement goal.

Considering your goal of accumulating a corpus of 25 Crores by the age of 50, it might be beneficial to reassess your asset allocation strategy. While your current allocation is diversified, you may want to tilt it slightly towards more conservative options as you approach retirement age.

Given your aggressive investment approach, you might consider gradually shifting towards a more balanced portfolio with a higher allocation to large-cap and balanced funds, which are comparatively less volatile.

Additionally, exploring other investment avenues such as direct equity, debt funds, or alternative investments could further diversify your portfolio and potentially enhance returns.

Regularly reviewing your portfolio's performance and rebalancing it as needed is crucial to stay on track towards your retirement goal.

Overall, you're on the right track with your financial planning efforts. Continue with your disciplined approach, stay informed about market trends, and seek professional advice if needed to optimize your portfolio further.

Keep up the excellent work, and with persistence and smart decision-making, you're well-positioned to achieve your retirement target!

..Read more

Ramalingam

Ramalingam Kalirajan  |7253 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2024

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Hello Sir. I am 42 years old.my monthly earning rs.95000.I am investing 40,000 per month from July,24 in mutual funds and 5L in lumsump MF in ICICI prudential energy opportunities fund.rs.24000 in RD in bank.Currently corpus is 25L in ppf, 25L in PF,20L in FD ,45L in LIc.i have one son age 8 yrs.i have own car, bike. I have parental house.If I have to retire at the age of 60 and require monthly 5 lakhs, is it possible, and if yes, what should be my strategy?
Ans: Current Financial Situation
You have a stable monthly income of Rs. 95,000.

You invest Rs. 40,000 per month in mutual funds since July 2024.

You have invested Rs. 5 lakhs in a lump sum mutual fund.

You save Rs. 24,000 monthly in a recurring deposit.

Your corpus includes:

Rs. 25 lakhs in PPF
Rs. 25 lakhs in PF
Rs. 20 lakhs in FD
Rs. 45 lakhs in LIC
You have an 8-year-old son.

You own a car, a bike, and have a parental house.

Goal: Retirement at 60
You wish to retire at 60 and need Rs. 5 lakhs monthly post-retirement.

Analysis of Current Investments
Your current investments are diversified:

Mutual funds for growth
PPF and PF for safety
FD for liquidity
LIC for insurance and savings
This is a balanced approach. However, to meet your goal, adjustments are needed.

Mutual Funds
Continue with mutual funds for growth. They provide higher returns over time. Consider diversifying into large-cap, mid-cap, and balanced funds. This reduces risk and ensures steady growth.

Recurring Deposit
Recurring deposits offer fixed returns. However, they are less effective for long-term growth. You might consider redirecting some RD funds into equity mutual funds. This can potentially provide better returns.

PPF and PF
These are excellent for long-term safety. They provide tax benefits and guaranteed returns. Continue these for stability and safety in your portfolio.

Fixed Deposits
FDs provide liquidity but offer lower returns. Consider reallocating some funds into more growth-oriented investments. This can help in building a larger retirement corpus.

LIC Policies
LIC policies often offer lower returns compared to mutual funds. Consider reviewing your policies. If they are investment-cum-insurance, think about surrendering and investing in mutual funds. Use a term insurance plan for pure risk cover.

Lump Sum Investment
Your lump sum investment in a sector-specific fund is high risk. Consider diversifying into diversified equity funds. This reduces risk and ensures better long-term growth.

Strategy for Achieving Retirement Goal
Increase SIP Contributions
Increase your monthly SIP contributions. Aim for at least 50% of your monthly income. This ensures a larger corpus over time.

Diversify Investments
Diversify across various mutual funds. Include large-cap, mid-cap, and balanced funds. This spreads risk and maximizes returns.

Regular Review and Rebalancing
Review your portfolio every six months. Rebalance to maintain the desired asset allocation. This helps in staying aligned with your goals.

Emergency Fund
Maintain an emergency fund of at least 6 months of expenses. Park this in liquid funds for easy access. This ensures financial stability during emergencies.

Retirement Planning
Start planning for retirement expenses. Consider inflation and rising costs. Use retirement calculators to estimate the required corpus. Adjust your investments accordingly.

Professional Guidance
Seek advice from a Certified Financial Planner. They can provide tailored strategies. A CFP ensures your investments are aligned with your retirement goals.

Final Insights
Your current investments are on the right track.

Increase your SIP contributions for better growth.

Diversify your mutual fund investments.

Review and rebalance your portfolio regularly.

Seek professional guidance for a tailored approach.

With disciplined investing, achieving your retirement goal is possible.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7253 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 11, 2024

Asked by Anonymous - Dec 11, 2024Hindi
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Money
I am going to retire soon with retirement fund of 2 Cr along with pension sufficient for me and my spouse. I have own builder flat in Delhi and health coverage. I have one married daughter who is well settled with 2 kids under 5 years. One flat in my building is on sale for 2 Cr. I need advice for investment for 2Cr retirement fund . Should I buy the flat in my building or should I invest 2 Cr in senior citizen saving scheme, post office MIS , fixed deposit in Bank. My spouse of same age is also earning equally.
Ans: Retirement is a significant phase of life, and your financial decisions now will shape your future security and lifestyle. Let’s analyse your situation and investment choices.

Assessing Your Current Position
You have a retirement fund of Rs. 2 crore, which is substantial.

Your pension adequately covers your and your spouse’s living expenses.

Your spouse’s earnings provide an additional safety net.

You own a flat in Delhi and have health insurance coverage.

You have no immediate financial dependency, as your daughter is well-settled.

Should You Invest in Real Estate?
Avoid investing Rs. 2 crore in another flat, even if it is in your building.

Real estate offers low liquidity, making it harder to access funds in emergencies.

Rental income might not justify the high capital investment, considering property management costs and potential downtime.

Real estate lacks diversification compared to other investments, increasing risk.

Alternative Investment Options
1. Senior Citizen Savings Scheme (SCSS)
SCSS is a secure option offering fixed returns for retirees.

Invest up to the permissible limit for predictable and regular income.

It is a low-risk investment backed by the government.

2. Post Office Monthly Income Scheme (MIS)
Post Office MIS provides guaranteed monthly income.

It is another safe choice for retirees with capital preservation as a priority.

Returns, though lower, are steady and reliable.

3. Bank Fixed Deposits
Fixed deposits (FDs) offer fixed returns and flexible tenures.

Senior citizen FDs provide slightly higher interest rates.

Split the funds across different banks for better safety and liquidity.

4. Balanced Investment in Mutual Funds
Invest in a mix of debt and equity mutual funds for moderate growth and stability.

Actively managed funds through an MFD with a Certified Financial Planner can optimise returns.

Debt mutual funds provide stable returns while equity offers growth potential.

Avoid direct funds due to their complexity and the need for constant monitoring.

5. Liquid Funds and Emergency Reserve
Allocate a portion to liquid funds for quick access in emergencies.

These funds are more effective than savings accounts for parking surplus money.

Maintain an emergency reserve for at least 24 months of expenses.

6. Inflation-Protected Investments
Some funds and bonds are designed to protect against inflation erosion.

These investments ensure your purchasing power remains intact over time.

Tax Considerations
Plan investments to minimise tax liabilities under your income bracket.

Be aware of the latest tax rules on mutual funds and fixed deposits.

Capital gains from equity investments over Rs. 1.25 lakh are taxed at 12.5%.

Fixed deposit interest is taxed as per your income slab. Plan withdrawals accordingly.

Succession Planning and Gifting
Consider creating a detailed estate plan to avoid future legal hassles.

Set up nominations and update wills to ensure smooth wealth transfer.

You may gift small amounts to your daughter or grandchildren under tax-free limits.

Final Insights
Investing your Rs. 2 crore retirement fund wisely ensures peace of mind and financial stability. Opt for a diversified approach balancing safety, liquidity, and moderate growth. Avoid locking all funds into real estate to keep your portfolio flexible. Thoughtful planning now will safeguard your golden years and your family’s financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Kanchan

Kanchan Rai  |435 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Dec 11, 2024

Asked by Anonymous - Dec 11, 2024Hindi
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Relationship
Whenever I argue with my partner, it quickly escalates into something bigger than it should be. I don't express how much I love them, but I feel like our communication is breaking down. How can I improve this situation?
Ans: It’s clear that you deeply care about your partner and the health of your relationship, but recurring arguments and a lack of expressed love are creating a disconnect. To nurture love and clarity in your communication, it’s essential to create an emotional space where both of you feel safe, valued, and understood—even during disagreements.

When arguments arise, they often escalate because emotions are heightened, and both people feel the need to defend their perspective. To shift this dynamic, start by focusing on emotional regulation in those moments. Take a deep breath and remind yourself that you’re both on the same team, even if you see things differently. This small pause can prevent reactive words or actions that might escalate the conflict further.

Outside of conflicts, consider the daily emotional climate of your relationship. If love isn’t being expressed regularly, your partner may feel insecure or disconnected, which can intensify disagreements. Begin to nurture love by weaving simple but heartfelt expressions of care into your everyday interactions. This might be as simple as saying, “I appreciate you,” giving a warm hug, or acknowledging something they did, however small. These gestures build emotional reserves that make handling tough conversations easier because they remind both of you of the underlying bond.

When it comes to communication, try reframing the way you approach disagreements. Speak from your feelings rather than placing blame. For instance, instead of saying, “You’re not listening to me,” try, “I feel unheard, and it’s making me frustrated.” This subtle but powerful shift fosters understanding rather than defensiveness. Equally important is listening with an open mind. Practice reflecting back what your partner shares to show you’re truly hearing them. For example, “I hear that you’re upset because you feel I didn’t prioritize you—am I understanding that correctly?”

Love is nurtured in the moments between conflicts—through trust, small acts of kindness, and consistent emotional support. Reflect on what makes your partner feel loved and cherished, and intentionally incorporate those actions into your daily life. At the same time, share what you need emotionally so they understand how to nurture you too. This mutual exchange strengthens your connection and creates a deeper sense of partnership.

Finally, consider having a calm, heartfelt conversation about how you both want to handle conflicts and express love moving forward. Creating shared goals for your relationship can bring clarity and purpose, helping you both feel aligned. By approaching your relationship with patience, empathy, and intentional care, you can not only resolve current challenges but also nurture a love that feels steady, secure, and fulfilling.

...Read more

Ramalingam

Ramalingam Kalirajan  |7253 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 11, 2024

Asked by Anonymous - Dec 11, 2024Hindi
Money
Hi, I am 33. A mom to a 5 months old. I have been working since I was 24 in education industry. I have accumulated a corpus of 1.4 cr ( solely mine) and a house registered jointly in my name and my husband's name. Now if I choose to be a stay at home mom for next 3 yrs. How much will my finances be affected? Could you please let me know.
Ans: Taking a career break for three years will have financial implications. Let us assess it from multiple perspectives to provide insights.

Income Loss Impact
Your current income will cease for three years, reducing your cash flow.

This pause might impact your future earning potential, depending on re-entry challenges in your industry.

Evaluate if your husband's income and your savings can sustain your family needs during this break.

Corpus Utilisation and Growth
A Rs. 1.4 crore corpus is commendable. Assess its current allocation for better optimisation.

If untouched, this corpus can grow significantly over three years through strategic investment.

Avoid dipping into the corpus unless absolutely necessary, as it can reduce future compounding benefits.

Household Budget Planning
Ensure your household expenses are managed within your husband’s income.

Create a detailed budget, listing mandatory expenses like EMIs, child needs, and lifestyle costs.

Plan for inflation while allocating funds for fixed expenses over the next three years.

Emergency Fund Importance
Maintain an emergency fund equivalent to at least 12 months' expenses.

Use a combination of fixed deposits and liquid funds for this purpose.

Avoid using your primary corpus as an emergency reserve.

Investment Portfolio Review
Review the current allocation of your Rs. 1.4 crore. Balance between equity and debt based on your goals.

Equity allocation can grow your wealth but keep debt for stability.

Invest in actively managed funds through a Certified Financial Planner to optimise returns.

Impact on Long-term Goals
Pausing your career may delay achieving some financial goals.

Align your current investments to meet goals like child education or retirement.

Regularly monitor the performance of your investments and adjust as required.

Tax Implications
Check the tax efficiency of your investments during the break.

Consider tax-saving instruments to reduce liability on your husband’s income.

Be aware of the latest tax rules on mutual fund capital gains.

Insurance and Contingency Planning
Review health and term insurance for adequate coverage for your family.

Ensure your husband is adequately covered with term insurance since he will be the sole earner.

Plan for additional medical expenses associated with child care during this time.

Re-Entry Considerations
Stay updated with industry trends to ensure a smooth return to work after three years.

Enhance skills during the break, if possible, to make re-entry easier and impactful.

Consider part-time or freelance work during the break to keep connected with the profession.

Finally
Taking a break to focus on motherhood is a beautiful choice. Planning carefully will ensure your finances remain stable during this period. With a structured approach, you can balance your family needs and long-term financial goals seamlessly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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