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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 29, 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 09, 2025Hindi

I am 46 years old and would like to retire in next 5 years. My current financial situation is as mentioned below Salary after taxes per month : INR 2,65,000 Mutual Fund, FD and shares : INR 1,14,00,000 PF : INR 38,00,000 One house current value INR 90,00,000 (no loan left) and other house purchased at a price of INR 72,00,000 and paying a EMI of INR 40,000 for next 5 years I have a daughter in 7th std ( I have plans to sell one house and pay for her education expense once she pass class 12) and my wife is a home maker How much more savings I have to amass to retire in next 5years and live on my savings assuming me and my wife (she is of my age) both live till the age of 80 years?

Ans: – You have done a disciplined job in wealth creation.
– Your current assets reflect good consistency and control.
– Your income of Rs. 2.65 lakhs per month gives a strong base.

– Two properties, no loan on one, and large mutual fund base show long-term planning.
– PF corpus and equity investments give growth plus safety.
– Thinking of retiring early at 51 is a strong and clear goal.

– Your family’s future is already being prioritised.
– Daughter’s education and wife’s financial comfort are thoughtfully planned.

? Household Income and Expense Outlook
– Monthly post-tax income is Rs. 2.65 lakhs.
– You are paying Rs. 40,000 EMI for 5 more years.
– That EMI will stop when you plan to retire.

– Expenses for house, school, family and lifestyle need tracking.
– Estimate current monthly household expense now.
– Let’s assume Rs. 80,000 to Rs. 1 lakh per month.

– After retirement, your monthly cost may reduce slightly.
– But inflation will still increase it over time.

– From 51 to 80 is 29 years. That is a long time.
– Expenses will double every 10–12 years at 6% inflation.

– So, income needs to beat inflation every year.
– Your investments must create cash flow from age 51.

? Existing Asset Evaluation
– You have Rs. 1.14 crore in mutual funds, FDs and shares.
– You have Rs. 38 lakhs in PF.
– These total to Rs. 1.52 crore in financial assets.

– House 1 is worth Rs. 90 lakhs. No loan is left.
– House 2 has Rs. 40,000 EMI for 5 years.
– House 2 will get fully paid around retirement year.

– You are planning to sell one house for education.
– That seems a workable plan. It reduces pressure on liquid savings.

– You may not need to save too much more for education.
– But long-term retirement corpus needs careful planning.

? Real Estate Decision for Education
– You plan to sell one house for daughter’s education.
– This plan is okay only if house is already identified for selling.
– Use the proceeds strictly for education only.

– Do not consider real estate as a future investment.
– Real estate has low liquidity and uncertain appreciation.

– Mutual funds are more efficient for long-term planning.
– Education goal needs to be aligned with actual fee estimates.

– Keep at least 50–60% of the education funds in debt or hybrid instruments.
– Start a SIP now in addition, to stay ahead of cost increases.

? Retirement Corpus Requirement Assessment
– Retirement is 5 years away.
– You plan to retire at 51.
– You want to sustain till age 80. That means 29 years of retired life.

– Assuming monthly post-retirement expenses at Rs. 1 lakh today.
– This can become Rs. 1.7 lakhs per month by age 60.
– May go above Rs. 3 lakhs monthly by age 75.

– Your investments must beat this rising cost for 29 years.
– You need at least Rs. 4.5 to 5 crore total retirement corpus.

– This corpus should be available by age 51.
– It must also include emergency buffer, travel, and medical fund.

– Currently, you have Rs. 1.52 crore in financial assets.
– In 5 years, this can grow if invested properly.

– If you continue investing and growing at good pace,
– You can reach a target of Rs. 3 to 3.5 crore.

– Still there may be a shortfall of Rs. 1 to 1.5 crore.

? Strategy to Bridge the Retirement Gap
– You have five years of earning power left.
– You must now maximise savings and reduce non-essential expenses.

– Increase SIPs and mutual fund allocation every year.
– Avoid new real estate or ULIP or LIC-type commitments.

– Focus fully on mutual funds with goal-based planning.
– Use equity mutual funds for growth over the next 5 years.

– Use hybrid and balanced funds 2 years before retirement.
– Work with a Certified Financial Planner to structure this mix.

– Shift some of the PF to mutual funds after retirement,
– As PF gives stable returns, but not inflation beating growth.

– Keep liquid funds for 1-year of post-retirement needs.
– Keep 3 years in short-term debt funds.

– The rest can stay in equity mutual funds with SWP (systematic withdrawal plan).

? EMI Ending and Property Planning
– Your EMI of Rs. 40,000 will end in 5 years.
– That will release cash flow after retirement.

– Decide whether you will keep the second house or sell.
– If not needed for living, sell and move funds to mutual funds.

– Rental income may not match return from mutual funds.
– Liquidity in retirement is more important than property ownership.

– But do not treat property as emergency fund.
– Selling property during urgency is not always easy.

? Daughter’s Future Planning
– She is now in class 7.
– You have 5 years before she enters college.

– Selling one house for education seems planned and fine.
– Still, keep some mutual fund corpus ready as backup.

– SIP in hybrid or balanced fund can create Rs. 15–20 lakhs in 5 years.
– Keep flexibility for higher education abroad or professional streams.

– Involve her in discussions after 10th standard.
– Let her know cost and goals linked to education.

? Health Insurance and Emergency Reserve
– Ensure health insurance for you, wife, and daughter.
– Prefer minimum cover of Rs. 20 lakhs family floater.

– In retirement, medical costs can rise sharply.
– Upgrade the policy now while you are healthy.

– Also set aside a medical buffer outside insurance.
– Medical fund of Rs. 15–20 lakhs in liquid form is useful.

– Keep Rs. 5–6 lakhs emergency corpus ready now.
– This can grow to Rs. 8–10 lakhs in 5 years.

– Emergency fund should not be part of investment portfolio.
– Keep it in sweep FD or liquid fund.

? Asset Allocation Suggestion
– Keep 10–15% in liquid/emergency funds.
– 15–20% in hybrid or debt funds.
– 60–65% in equity mutual funds for growth.

– Realign this mix every 12–18 months.
– Reduce equity exposure 2 years before retirement.

– Do not depend on dividend options or annuity products.
– Use SWP from equity mutual funds after retirement.

– SWP is flexible and tax-efficient.
– Helps you control withdrawals as per needs.

– Work with a Certified Financial Planner for this setup.

? Tax Planning and Mutual Fund Strategy
– Avoid index funds and ETFs.
– They do not suit Indian market behaviour.
– Actively managed mutual funds give better potential.

– Also avoid direct funds.
– You miss advisor insights and regular rebalancing.

– Use regular funds with MFD and CFP guidance.
– Helps align portfolio with retirement and child goals.

– Understand new capital gains tax rules.
– LTCG on equity above Rs. 1.25 lakh is taxed at 12.5%.
– STCG taxed at 20%. Debt fund gains taxed as per income slab.

– Choose redemption plans carefully in retirement phase.

? Income After Retirement
– Plan your monthly cash flow from age 51.
– Use mutual fund SWP to get monthly payout.

– Rent, dividends, or interest can support cash flow if needed.
– Keep 1-year expenses always in liquid funds.

– Avoid real estate dependency or fixed annuities.
– They lack flexibility, growth, and tax-efficiency.

– Track expenses, review income every 6 months post-retirement.
– Do not dip into equity corpus during market dips.

? Finally
– You are well-prepared but not fully ready for retirement yet.
– A gap of Rs. 1–1.5 crore remains.

– Use next five years to close this gap with focused investments.
– Trim unnecessary expenses and increase SIPs steadily.

– Sell non-essential property at the right time.
– Reinvest proceeds in mutual funds for steady cash flow.

– Avoid index funds, direct funds, and annuities.
– Stick to actively managed mutual funds with regular mode and CFP support.

– Secure your daughter’s education and your spouse’s comfort.
– Maintain health cover and emergency reserves always.

– Review portfolio every year and adjust asset mix.
– Early retirement is possible if steps are taken now.

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

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