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Ramalingam Kalirajan |10894 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jun 21, 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

Question by Rupam on Jun 07, 2025Hindi

i am 41 years old , having 11 lks in ppf, 21 lks in post office, 68 lakhs in fds and 14 lks in ncd. i have no debt. 1 child age 9+. taken retirement just 6 months ago. sip is running from last 12 years which is now 24lks will continue 5.5k/moth fr another 19 years. what should b my future planning?

Ans: You have shown good money discipline.
You retired early. Still, you have no debts.
That shows wise planning.
Now, the focus must shift to sustaining wealth.
You need to ensure long-term financial peace.
Let us do a detailed 360-degree assessment.

Your Present Financial Position

Let’s summarise your current wealth first:

Rs. 11 lakhs in PPF

Rs. 21 lakhs in Post Office schemes

Rs. 68 lakhs in Fixed Deposits

Rs. 14 lakhs in Non-Convertible Debentures (NCDs)

Rs. 24 lakhs in mutual funds (via SIPs, running for 12 years)

Rs. 5,500 monthly SIP continuing for 19 more years

No outstanding loans

One child, aged 9+

Retired 6 months ago

This is a solid base.
But retirement at 41 needs strong income planning.
You must plan for next 45 years or more.

Life Stage and Planning Horizon

You are only 41 now.
You could live till 85 or 90 years.
That means you need income for 45+ years.
This is a very long retirement period.

You have a dependent child.
Education and marriage costs will come.
Expenses will rise due to inflation.
Your plan must beat inflation every year.

Current Assets – Liquidity and Return Assessment

Let us analyse your existing assets.

PPF – Rs. 11 lakhs

Long lock-in until 15 years.

Returns are fixed, tax-free.

Not liquid.

Cannot withdraw as needed.

Ideal only as long-term backup.

Post Office Schemes – Rs. 21 lakhs

Safe but low returns.

Locked or semi-liquid in nature.

Not useful for monthly income.

Limited role in retirement cash flow.

Fixed Deposits – Rs. 68 lakhs

Very safe.

Interest is taxable.

Return may not beat inflation.

Not ideal for long-term goals.

Can generate regular income now.

Needs better reinvestment strategy.

NCDs – Rs. 14 lakhs

Not completely liquid.

Credit risk if not AAA-rated.

Income is taxable.

Must be reviewed periodically.

Should not be over 10% of portfolio.

Mutual Funds – Rs. 24 lakhs

This is your most growth-oriented asset.

Running SIP of Rs. 5,500 is a good step.

Continue SIPs as planned for long-term.

Don’t stop SIPs unless unavoidable.

SIP corpus can support your child’s future.

Your Strengths Right Now

No EMIs or loan burden.

Retirement already started.

Large amount parked in safe assets.

SIP already running.

Enough base to build retirement income plan.

But there are also some weaknesses.

Key Weaknesses to Address

Portfolio is tilted heavily towards debt.

Limited equity exposure.

Long retirement period without job income.

PPF and post office are illiquid.

FD returns may not beat inflation.

NCDs carry credit risk.

Not enough diversification.

Income stream is not fully planned.

Future Strategy: Retirement Income and Growth Mix

You need to balance safety and growth.
Your plan must have three buckets:

1. Immediate Income Bucket

Use part of FD interest for next 2–3 years.

Keep money for monthly needs.

Also keep emergency fund for 12 months.

Don’t touch equity mutual funds now.

2. Medium-Term Bucket (5 to 10 years)

Move part of FDs to hybrid mutual funds.

Consider debt-oriented hybrid mutual funds.

Keep 5 to 7 years horizon.

These are better than FDs for post-tax returns.

They offer stability and modest growth.

3. Long-Term Growth Bucket (10 to 25 years)

Gradually shift part of FD/Post Office to equity mutual funds.

Increase SIP over time if cash flow allows.

Focus on actively managed funds only.

Actively managed funds beat inflation better.

Avoid index funds.

Index funds don’t adjust in falling markets.

Actively managed funds give downside protection.

Why Avoid Direct Mutual Funds

Direct funds lack personalised advice.

No portfolio review.

No guidance during market falls.

Retirement needs regular check-ins.

Use regular mutual funds through MFD with CFP.

You get expert support and disciplined approach.

That adds peace and long-term consistency.

Create a Monthly Income Plan

Based on current corpus, plan 25–30 years cash flow.

Use Systematic Withdrawal Plan (SWP) from hybrid funds.

Start only after 5 years.

Until then, use FD interest.

Avoid redeeming equity early.

Tax-Efficient Planning

Equity mutual funds: LTCG above Rs. 1.25 lakh taxed at 12.5%.

STCG taxed at 20%.

Debt mutual funds: Taxed as per your slab.

Interest from FD and NCD fully taxable.

Use SWP from mutual funds for tax efficiency.

Spread redemptions over years.

Children’s Future Planning

Child is 9 years old.

Education and college costs will come in 8–10 years.

Marriage after 15–20 years.

Continue SIPs.

Increase it when possible.

Create separate goal-based mutual fund portfolios.

Don’t mix child’s goals with your retirement funds.

What You Should Not Do

Don’t over-depend on FDs or post office plans.

Don’t break PPF prematurely unless urgent.

Don’t invest in index funds.

Don’t invest in direct mutual funds without guidance.

Don’t touch equity funds before 10 years.

Don’t buy insurance-linked plans now.

Don’t fall for high-return schemes with low credibility.

What You Should Do Now

Review all investments with Certified Financial Planner.

Create income drawdown strategy for 30 years.

Shift 10–15% of FDs to hybrid mutual funds.

Rebalance every 12 months.

Increase SIP by 10% each year.

Keep health insurance active always.

Prepare for healthcare inflation in later years.

Track expenses and update budget yearly.

If You Hold Any LIC, ULIP or Insurance Policies

If any of these are traditional plans with low returns:

Check surrender value now.

If lock-in completed, consider exiting.

Reinvest in mutual funds for long-term.

Keep only pure term insurance if needed.

Finally

You have done well to build a strong financial base.
But early retirement at 41 needs extra care.
Current portfolio is too conservative.
Growth must be added slowly.
Mutual funds will help beat inflation.
But use regular funds via CFP and MFD only.
Do not trust direct funds for this stage.
Create 3 bucket strategy for income and safety.
Track and update your plan each year.
Your goal now is not wealth creation.
Your goal is wealth preservation and sustainable income.

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

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