Hi, I am 45 years old. Working in in a tech company.
Want to retire in another 5 years.
Below is my current financial details
Bank saving account : 21 Lakhs
- EPF - 68 Lakhs
- LIC Jeevan Anand : 10 Lakhs maturing in 2030
- SBI term insurance : 50 Lakhs coverage till 60 years
- Star Health insurance for me and family : 7 Lakhs coverage
- Have corporate office health insurance of 10 lakhs, life insurance coverages
- LIC Jeevan Utsav pension plan : 10 Lakhs yearly premium for 6 years, will get 50 thousand per month after 12 years, from 2036 onwards, also provides life insurance coverage
- Have monthly NPS of 20 thousand, started 6 months back
Have the below Assets:
- Site worth of 1.2 crores as of today
- Flat worth of 75 Lakhs as of today
Have below investments
- 3.1 Crore Indian market equity trading as of today
- 4.5 Crores of company ESOP of foreign company
- Given around 15 lakhs to relatives for financial help, which I need to receive back
- Have no loans or any other liabilities.
- Receive salary of 13.5 Lakhs per month : 3.5 is fixed salary and 10 Lakhs is ESOP equity from the company, I continue to receive this as long as I work for the company.
If you look at the high level picture, it looks something like this
- Liquidity : 22 Lakhs : 2% of overall portfolio
- Investment is : 7.5 Crores : 70% of overall portfolio
- Retirement plan investment : 88 Lakhs : 8% of overall portfolio
- Assets worth : 1.8 Crores : 17% of overall portfolio
- Monthly expenses is around 60 thousand per month.
Please review my financial portfolio and suggest me if there are any changes needed so that I can put the in hand money to effective use to generate good amount of wealth as well as to receive the regular guaranteed amount return
Ans: You have done very well in building assets and income.
Your discipline and strong savings habit are impressive.
Your portfolio is large and well diversified across asset classes.
With 5 years left before planned retirement, you are in a strong position.
» current strengths
– You have no liabilities.
– Your monthly expenses are very low compared to your income.
– You have good exposure to equity through direct holdings and ESOP.
– You have property assets for stability.
– You have term insurance and health cover for protection.
– You have started NPS for retirement benefit.
» liquidity position
– You have Rs. 21 lakh in savings account.
– Liquidity is only 2% of portfolio, which is low.
– You may increase short-term liquid assets for emergencies.
– Keep 12 to 18 months of expenses in safe liquid instruments.
– This will prevent forced sale of volatile assets during market falls.
» investment allocation review
– Large allocation to direct equity and ESOP is good for growth.
– However, concentration risk is high due to ESOP size.
– Reduce dependence on single company stock over time.
– Gradually move part of ESOP gains to diversified actively managed funds.
– Actively managed funds with a Certified Financial Planner can give better risk management.
– Direct equity requires constant monitoring and carries company-specific risk.
– Keep direct equity allocation below 50% as you near retirement.
» insurance review
– Your term cover is Rs. 50 lakh, which is low for your profile.
– Consider increasing term cover to match your current asset value and goals.
– You have health cover of Rs. 7 lakh plus corporate cover.
– Corporate cover will stop after retirement, so personal cover must be higher.
– Take a higher individual family floater with at least Rs. 25–50 lakh.
– Continue accidental cover for disability risk.
» retirement corpus building
– Your current investment corpus is strong.
– In 5 years, equity growth plus ESOP value can create large corpus.
– Shift gradually from high-volatility assets to balanced growth assets before retirement.
– Maintain at least 40% in growth assets even post-retirement for inflation protection.
– The rest can be in stable debt instruments for income.
» property holdings
– You have a site worth Rs. 1.2 crore and flat worth Rs. 75 lakh.
– These give asset stability but low liquidity.
– Avoid adding more real estate as it ties up capital.
– Keep them as part of net worth but focus new investments in financial assets.
» LIC and traditional policies
– LIC Jeevan Anand and LIC Jeevan Utsav are low-yield policies.
– These give low returns compared to inflation.
– You can surrender Jeevan Anand and reinvest in actively managed mutual funds.
– This will improve long-term returns and liquidity.
– Continue LIC Jeevan Utsav if surrender charges are high now, but reassess later.
» portfolio diversification strategy
– Keep part of your corpus in high-quality actively managed equity funds.
– Avoid index funds, as they blindly follow market without risk control.
– Actively managed funds can outperform in volatile and falling markets.
– Index funds lack flexibility to avoid weak sectors or companies.
– Also avoid direct plans without guidance.
– Investing through an MFD with CFP qualification gives disciplined advice and ongoing review.
– This ensures you avoid emotional decisions and stick to the right plan.
» regular income planning for retirement
– At retirement, shift part of corpus to safe debt funds, bonds, and deposits.
– This will give stable income for monthly needs.
– Keep some allocation in growth assets to fight inflation.
– Withdraw income systematically, not by redeeming large chunks at once.
– This approach keeps the portfolio sustainable for 30+ years post-retirement.
» use of current surplus income
– You have very high monthly surplus.
– Deploy surplus into a mix of actively managed equity and debt funds.
– Avoid keeping large idle balance in savings account.
– Use surplus to build retirement corpus faster.
– Also invest part in international equity funds for currency diversification.
» ESOP handling
– Your ESOP is a big asset but concentrated in one company.
– Plan gradual sale over the next 5 years to reduce concentration risk.
– Redeploy proceeds into diversified mutual funds and debt instruments.
– Do not wait to sell all at retirement; spread the sale to reduce tax impact and volatility.
» tax efficiency planning
– Plan asset sales and redemptions considering capital gains tax rules.
– Equity long-term gains above Rs. 1.25 lakh are taxed at 12.5%.
– Short-term equity gains are taxed at 20%.
– Debt fund gains are taxed at your slab rate.
– Spread sales across years to reduce tax outgo.
– Use tax-saving opportunities like PPF, NPS, and 80C fully each year.
» risk management before retirement
– As retirement nears, portfolio shocks can hurt more.
– Start rebalancing from year 3 onwards.
– Move some equity gains to safer assets every year.
– Maintain equity allocation but with lower volatility options.
– Avoid large exposure to small-cap or single-stock bets near retirement.
» succession and estate planning
– Make a clear Will to avoid disputes later.
– Nominate in all investments, insurance, and bank accounts.
– Keep joint ownership for easy access to funds by spouse.
– Share asset and document details with spouse.
» liquidity for opportunities and emergencies
– Keep some cash or liquid fund for quick access.
– This can help you take advantage of market dips even after retirement.
– It also covers emergencies without disturbing long-term assets.
» finally
– Your financial position is very strong.
– You can reach your retirement target in 5 years with discipline.
– The focus now should be on reducing concentration risk, improving insurance, and increasing liquidity.
– Surrender low-yield policies and shift to better performing mutual funds.
– Move ESOP and direct equity gains gradually to diversified assets.
– Keep a good mix of growth and stability even after retirement.
– Review your plan every year with a Certified Financial Planner to stay on track.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
