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Ramalingam Kalirajan |11152 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 09, 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 - Aug 09, 2025Hindi

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

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