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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 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 - Jul 11, 2025Hindi

Hi Sir, I am 44 yrs old house wife. I owned two properties. I have invested 40 lacs in fd nd 20 lacs in ppf. Have 2 annual polices and Sip worth 15k every month. I want to invest in mutual funds. Kindly advice so that i can grow my money for me nd my husband's retirement. Thanks in advance

Ans: ? Your Current Financial Standing

– You are 44 years old. That gives you around 12 to 15 years to retirement.
– You are a homemaker. So, your investment must create financial independence post-retirement.
– You own two properties. One could be self-occupied. The second one may or may not generate rental income.
– You have Rs. 40 lakhs in fixed deposit. That is safe but gives limited growth.
– You also have Rs. 20 lakhs in PPF. That’s a tax-efficient long-term saving tool.
– You have two annual insurance policies.
– You are also investing Rs. 15,000 monthly in SIP.
– You wish to grow your money through mutual funds.
– Your goal is to build a retirement fund for you and your husband.

Let’s look at each component of your portfolio and see how you can improve.

? Assessment of Fixed Deposits

– You have invested Rs. 40 lakhs in fixed deposits.
– FD is a safe choice but gives limited returns.
– Returns often do not beat inflation in the long term.
– For retirement planning, capital growth is needed.
– So, keeping all the money in FD may not be helpful.
– Consider slowly shifting a portion of this FD to mutual funds.
– But this should be done in a phased and planned way.
– You can create an STP (Systematic Transfer Plan) to reduce market risk.
– Start by identifying your liquidity and emergency needs first.
– Keep about 6 to 12 months' expenses in FD for emergencies.
– Rest can be gradually moved to mutual funds for growth.

? Evaluation of PPF Investment

– Rs. 20 lakhs in PPF shows disciplined long-term saving.
– It is a good instrument for risk-free and tax-free returns.
– Interest is compounded annually and exempted from tax.
– Continue contributing to it till maturity.
– Do not break it or withdraw prematurely.
– Use PPF as a stable, conservative part of your retirement fund.
– Avoid treating it as your main wealth-builder.

? Understanding Your Insurance Policies

– You mentioned two annual policies.
– If these are LIC or traditional investment-cum-insurance plans, then review them.
– These plans offer low returns and limited flexibility.
– Check the surrender value and maturity benefits.
– If they are ULIPs or endowment plans, consider surrendering them.
– Use the proceeds to invest in mutual funds.
– Insurance and investment should be kept separate.
– Term insurance gives better coverage at low cost.
– Mutual funds help in growing wealth effectively.
– Do not buy investment products for insurance purposes.

? Review of Current SIPs

– Rs. 15,000 SIP shows good commitment to long-term investment.
– That adds up to Rs. 1.8 lakhs annually.
– Over 10 years, it builds good wealth if done properly.
– Ensure that SIPs are in well-managed, diversified funds.
– They must match your risk profile and time horizon.
– At your age, growth funds are important.
– Choose diversified equity funds that are actively managed.
– Avoid index funds. They do not beat markets in volatile phases.
– Active funds are managed by professionals who adjust as per market.
– This gives better returns over long term.

? Direct Funds vs. Regular Funds through CFP

– If you are investing in direct mutual funds, consider the risks.
– Direct funds look cheaper, but miss out on expert guidance.
– Wrong fund selection can result in lower returns.
– Lack of review leads to long-term damage.
– Investing through a Certified Financial Planner ensures right strategy.
– CFPs align your portfolio with your goals.
– Regular funds offer tracking, rebalancing, and behavioural support.
– They ensure you stay on track during market ups and downs.
– It is a small cost for long-term peace of mind and better outcomes.

? Recommended Mutual Fund Strategy

– Start a detailed goal-based investment plan.
– Retirement is your primary goal now.
– Also, consider future health expenses and lifestyle needs.
– Allocate funds based on risk and time horizon.

– For long-term growth, equity mutual funds are best.
– These can give 10-12% returns over long-term.
– Choose diversified actively managed equity funds.
– These invest across sectors and company sizes.
– Add a few hybrid funds for stability.
– They invest in both equity and debt.
– This gives a good balance of growth and safety.
– For short-term needs, use ultra short-term debt funds.
– Avoid sector-specific or thematic funds now.
– Avoid NFOs and fancy schemes.
– Do not go for dividend plans. Use growth plans instead.
– Reinvest profits to build wealth faster.

– Start SIPs from your FD proceeds slowly.
– Use STP to shift lump sum to equity in small parts.
– Do not put lump sum into equity directly.
– Build a mix of SIP and STP strategies.

? Important Tax Points

– Mutual funds are tax-efficient compared to FD.
– In FDs, all interest is taxed annually.
– In equity mutual funds, LTCG above Rs. 1.25 lakh is taxed at 12.5%.
– STCG in equity mutual funds is taxed at 20%.
– For debt mutual funds, both short-term and long-term gains are taxed as per slab.
– But overall, mutual funds help you earn better post-tax returns.

? Emergency Fund and Risk Management

– Always keep an emergency fund ready.
– Ideally 6 to 12 months of expenses in FD or liquid funds.
– This gives peace of mind in case of health or family issues.
– Also, ensure you and your husband have health insurance.
– It reduces the need to break investments in medical emergencies.
– Avoid using investments for regular expenses.

? Rebalancing and Regular Review

– Financial plans must be reviewed regularly.
– Markets change. Goals change. Risks change.
– Rebalance your investments once a year.
– Shift money between equity and debt as per your age.
– At 44, equity can be 60-70% of your portfolio.
– Slowly reduce it as you near retirement.
– A Certified Financial Planner can guide this process.
– Review all policies, SIPs, and goals annually.

? Investment Discipline and Behaviour

– Wealth is built with patience and discipline.
– Stick to SIPs even when markets fall.
– Do not react emotionally to market noise.
– Avoid following social media or random advice.
– Long-term investing wins over timing the market.
– Monitor progress yearly, not monthly.
– Stay invested for minimum 10 to 15 years.
– Compound growth works best over time.

? Retirement Planning Considerations

– Define your expected monthly expense after retirement.
– Adjust it for inflation over 15 years.
– Include health, travel, and lifestyle needs.
– Plan to have a regular income flow post-retirement.
– Use SWP (Systematic Withdrawal Plan) from mutual funds.
– This helps you withdraw monthly from your corpus.
– Do not depend only on rental income or pension.
– Mutual funds can support your cash flow in retirement.
– Keep your capital intact, withdraw from profits.
– Rebalance post-retirement to lower risk funds.

? Common Mistakes to Avoid

– Don’t keep too much money in fixed deposits.
– Don’t rely on LIC or ULIPs for wealth creation.
– Don’t mix insurance with investment.
– Don’t stop SIPs due to short-term loss.
– Don’t chase high return promises.
– Don’t invest in index funds for growth.
– Don’t try to do it all by yourself.
– Get help from a Certified Financial Planner.
– Don’t invest without a written plan.

? Finally

– You are already doing many things right.
– You have saved well and shown financial discipline.
– Now is the time to shift from saving to investing.
– Mutual funds will help you grow your retirement corpus.
– Make a written plan with goals, timelines, and strategies.
– Keep insurance separate from investment.
– Use equity funds for growth, debt for safety.
– Use SIPs and STPs for disciplined investing.
– Work with a CFP for regular reviews.
– Stay consistent and focused.
– You can build a strong retirement portfolio.

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

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