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Ramalingam Kalirajan |10850 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 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 Tmk1981 on Jul 14, 2025Hindi

I am 43yrs age want retirement at 55 age having 50 lakh in FD regular monthly income, 50 lakh in FD interest accrued, ppf 6 lakh wants monthly income of 1 lakh per month

Ans: You are already doing many things right.

Rs. 1 crore in FDs and Rs. 6 lakhs in PPF show solid discipline.

At 43 years, you have 12 years before retirement.
That is enough time to build a strong income plan.

Your goal of Rs. 1 lakh monthly income is realistic.
It needs planning and smart execution.

Let us go step-by-step.

? Understand Your Current Financial Strength

– You have Rs. 50 lakhs in FD giving regular income.
– You also have Rs. 50 lakhs in interest accrued.
– You have Rs. 6 lakhs in PPF.
– This gives you a total base of Rs. 1.06 crore.
– Your age is 43, so 12 years are left till retirement.
– This gives good time to grow wealth and plan monthly income.

? Define Your Income Goal in Today’s Value

– Your aim is Rs. 1 lakh monthly income.
– That means Rs. 12 lakhs per year.
– At retirement, inflation will increase cost of living.
– In 12 years, this goal may become Rs. 2 lakhs/month.
– So, planning has to consider inflation also.
– Do not stick only to current values.
– Plan income that adjusts over time.

? Avoid Keeping Entire Money in FDs

– FDs give safety but poor returns.
– Your returns may not beat inflation.
– FD interest is fully taxable as per your slab.
– Over 12 years, the real value of FD interest will reduce.
– It cannot generate growing monthly income.
– Keeping all money in FDs is not advisable.
– Diversification is the key to protect your future income.

? Divide Corpus into Buckets

– Use a 3-bucket strategy to manage risk and returns.
– First bucket: Keep 2 years’ worth income in FD.
– Second bucket: Keep 3–5 years’ income in debt mutual funds.
– Third bucket: Long-term money in equity mutual funds.
– This gives a balanced plan.
– FD gives stability. Debt funds give better returns.
– Equity gives growth to beat inflation.

? Start Mutual Fund Investments Immediately

– Begin with a mix of equity and hybrid funds.
– Since you are not retiring tomorrow, equity is important.
– Use only regular mutual funds via MFD.
– Avoid direct funds. They look low-cost but offer no guidance.
– A Certified Financial Planner-supported regular plan is better.
– Avoid index funds. They do not protect during market falls.
– Active mutual funds give better risk-adjusted returns.
– Invest Rs. 50 lakhs accrued FD amount in a phased way.
– Use STP to move from liquid to equity and hybrid funds.
– Do not put full amount in one shot.

? PPF Must Be Continued Till Retirement

– You already have Rs. 6 lakhs in PPF.
– This is your safe, tax-free debt allocation.
– Continue depositing every year till age 55.
– Maximise limit of Rs. 1.5 lakh yearly if possible.
– Use Section 80C benefit and grow it tax-free.
– At 55, it can be a part of your retirement income pool.
– PPF gives tax-free maturity, which is rare today.

? Avoid Annuities or Real Estate

– Annuities give low return. They lock your capital.
– Income from annuity never grows with inflation.
– You lose access to your own capital.
– Real estate has poor liquidity and high expenses.
– Avoid rental dependency in retirement.
– Stick to financial assets like mutual funds and PPF.

? Insurance Cover Must Be Evaluated

– Do you have a term insurance cover?
– If not, take one till age 60.
– Choose sum assured of Rs. 1.5–2 crore.
– This gives protection to your family.
– Avoid investment-based insurance plans.
– If you have any endowment or ULIP, consider surrendering.
– Reinvest that amount in mutual funds.

? Health Insurance is a Must

– Medical costs are increasing every year.
– Take a family floater health cover of at least Rs. 10–15 lakhs.
– This will protect you in retired life too.
– Employer cover, if any, will not exist post-retirement.
– Do not depend on employer policy alone.
– Buy a personal policy with lifetime renewability.

? Retirement Corpus Needs to Grow from Now

– Current corpus of Rs. 1.06 crore is a good start.
– But by age 55, you will need at least Rs. 2.5–3 crores.
– This will give Rs. 1 lakh per month income adjusted for inflation.
– So, you must invest and grow your capital wisely now.
– At least Rs. 50 lakhs must be in equity and hybrid mutual funds.
– Balance can be split across debt and FD.

? Retirement Income Plan – Smart Withdrawal Strategy

– Use SWP (Systematic Withdrawal Plan) post-retirement.
– Start SWP from debt or balanced funds first.
– Keep 2 years’ income in liquid assets.
– Equity corpus should remain untouched for first 5–7 years.
– After that, slowly shift part of equity corpus to debt.
– This makes your income sustainable for 25–30 years.
– This approach also gives flexibility and growth.

? Income Tax Planning Is Equally Important

– FD interest is fully taxable.
– Mutual funds have better tax treatment.
– 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.
– PPF maturity is tax-free.
– Proper income planning reduces your tax burden post-retirement.
– Discuss with your CFP on optimal withdrawal and tax plan.

? Plan SIPs in Equity Funds

– Even if your corpus is invested, start fresh SIPs too.
– Use surplus money from monthly FD interest.
– SIPs give cost averaging benefit.
– They help you stay disciplined.
– Choose 2–3 diversified equity mutual funds.
– Keep tenure till retirement.
– Stop SIP only if income flow becomes tight.
– Till then, keep adding monthly.

? Rebalance Portfolio Once a Year

– Rebalancing is key to stay on track.
– If equity grows too much, book some profit.
– If market crashes, add more if possible.
– Don’t panic or stop SIP during market fall.
– Stick to your goal.
– Review once every year with your MFD.
– Avoid checking portfolio every day.
– That builds emotional stress.

? Don’t Share or Gift Large Sums Now

– Preserve your capital till retirement.
– Avoid big loans or financial help to others.
– If you help someone, do it within limits.
– Protect your retirement plan first.
– Let your income goals take first priority.

? Keep Documents and Nominees Updated

– Keep all investment papers in one place.
– Create a nomination for each asset.
– Also create a Will.
– Inform spouse or family about financial plans.
– Keep scanned copies in email or cloud.
– This helps in smooth handover in future.

? Finally

– You have taken the right step early.
– 12 years is a good horizon to plan well.
– You already have a solid foundation of Rs. 1 crore.
– With the right mix of equity and debt, you can achieve Rs. 3 crore.
– That can generate Rs. 1 lakh monthly inflation-adjusted income.
– Use a certified financial planner and MFD for proper fund selection.
– Avoid index funds and direct plans.
– Avoid annuities and real estate investments.
– Secure your health and life insurance now.
– Protect your future with a disciplined, reviewed and diversified approach.
– You are on track to retire peacefully at 55.
– Stay consistent. Stay focused. Stay confident.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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.