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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 04, 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 04, 2025Hindi

I am 48 years old male. I am in-out of jobs due to fitments issues and some health issues since last 2 years. My wife continues to work and hopes to do so till another 5-6 years till 2030-31. have a son who is pursuing engg this year, so another 4 years for him to completed education, His fees would be around 10-15 L for the 4 years. Our current finances stand at MF+Stocks ~ 1.1 CR , FD/Debt ~ 1Cr , Retirals(NPS,EPF,PF) ~ 2.3 Cr, Gold+Others~38L. Can we sustain to leave through my wife's post retirements for 25-30 years i,e 2060. MF SIP's of about 75K to continue for next 5 years in addition to EPF,PF,NPS. Health insurance , term insurance in active state.

Ans: You’ve built a sound financial foundation. With your wife supporting till 2030-31, and your current corpus in place, your goal is achievable. Let's evaluate this with a 360-degree view and plan around every dimension.

» Your Family’s Financial Snapshot is Strong

– You are 48 and in a job break, which is understandable.
– Your wife’s earnings till 2030-31 give stability for now.
– Your son’s education expenses are within reach.
– You have Rs. 1.1 Cr in equity (stocks + mutual funds).
– You have Rs. 1 Cr in debt (FDs + debt funds).
– You have Rs. 2.3 Cr in retirals like NPS, EPF, PF.
– You also hold Rs. 38L in gold and other assets.
– MF SIPs of Rs. 75K/month will add strength in the next 5 years.
– Health and term insurance are active. That adds security.

You have created a solid mix of liquidity, growth, and safety.

» Plan for Your Son’s Education (Rs. 10–15L)

– His graduation costs over 4 years will be Rs. 2.5–4L/year.
– You can fund this from FDs or debt funds. Avoid equity for this.
– Redeem from FDs in small tranches as required.
– This avoids breaking large deposits and losing interest.
– Do not disturb your mutual fund or equity holdings for this.
– Keep a separate debt fund earmarked for this goal.

Education is a short-term goal. Capital safety is more important here.

» Post-2030: Wife’s Retirement and Your Family’s Lifestyle

– Your wife's income will stop around 2030-31.
– From then, you must rely only on the corpus.
– Your goal is to sustain till 2060, i.e., 30 years post-retirement.
– That requires a well-planned withdrawal and asset allocation.
– It’s essential to create 3 buckets for that long period:

Short-Term Bucket (0–5 years):
– Keep about Rs. 35–40L in FDs, arbitrage funds, or liquid debt funds.
– Use this bucket for monthly expenses. Replenish it every 4–5 years.

Medium-Term Bucket (5–12 years):
– This can hold Rs. 60–70L in hybrid funds or balanced advantage funds.
– These have limited downside and offer growth better than FDs.
– Refill Bucket 1 from this bucket every 5 years.

Long-Term Bucket (12–30 years):
– Keep Rs. 1.2–1.5 Cr in diversified equity mutual funds.
– You already have Rs. 75K/month SIPs for the next 5 years.
– This will add over Rs. 60L (excluding growth).
– This bucket fights inflation and keeps your corpus growing.

This layered approach will ensure stable income for the next 30 years.

» MF SIPs Are Strategic for Wealth Building

– Rs. 75K/month for 5 years is a powerful wealth-creator.
– Ensure allocation across large-cap, flexi-cap, mid-cap, and hybrid funds.
– Avoid overconcentration in small-cap funds at this life stage.
– Continue yearly review and rebalancing with a Certified Financial Planner.
– SIPs will support your long-term withdrawal strategy.

SIPs provide equity exposure in a disciplined and low-risk way.

» Avoid Direct Plans; Stick to Regular Plans via MFD with CFP

– Direct plans can be risky if not monitored carefully.
– Investors often chase past returns without proper strategy.
– No guidance on fund switches, goal alignment, or asset rebalancing.
– MFDs with CFP credentials ensure goal-driven tracking.
– They guide on taxation, retirement cashflows, and fund suitability.
– Many long-term investors make mistakes in direct plans.

Regular plans with expert support give higher net outcomes over time.

» Why Actively Managed Funds Are Better Than Index Funds

– Index funds just mirror the market. They do not beat it.
– They include poor-performing companies due to market weight.
– Active funds exit bad companies and focus on leaders.
– Fund managers dynamically rebalance during volatility.
– Index funds fall with the market and have no protection built-in.
– Your 25–30 year horizon needs protection + growth.
– Actively managed funds are designed for this mix.

Avoid index funds for retirement goals that need inflation-beating growth.

» Retiral Corpus: Strong and Well Positioned

– Rs. 2.3 Cr in EPF, PF, and NPS offers stability.
– EPF and PF are debt-oriented, safe, and give compounding power.
– NPS gives equity-debt exposure, helpful for long-term corpus.
– Track asset allocation in NPS. Ensure 50–60% equity exposure.
– Shift gradually to safer assets 5 years before retirement.
– You can use NPS partial withdrawals after age 60 for income.

This corpus acts as your pension substitute post your wife’s retirement.

» Gold and Other Assets: Use With a Purpose

– Rs. 38L is substantial in non-financial holdings.
– If gold is in ETF or sovereign gold bonds, retain for 2–3 years.
– Do not add more gold unless needed for a family event.
– Do not use gold for income generation or expenses.
– You can liquidate gradually post-2035, if needed.

Keep gold as reserve, not as income-generating asset.

» Health and Term Insurance Are Active – Ensure Continuity

– Health insurance is critical given your health history.
– Ensure coverage is at least Rs. 15–25L with super top-up.
– Continue term insurance till age 60–65 or till goal completion.
– Review insurance cover every 2–3 years.
– Renew policies before expiry without gaps.

Medical expenses are a major threat to retirement income. Guard against that.

» Cash Flow Planning for 2060: Building Stability

– Your monthly family expenses must be tracked closely.
– After 2030, expect 5–6% inflation every year.
– A Rs. 80K expense today becomes Rs. 2L+ by 2045.
– That’s why long-term equity growth is non-negotiable.
– Rebalancing every 3–4 years is a must.
– Avoid panic redemptions during market drops.
– Systematic Withdrawal Plans (SWPs) work better than lump sum drawdowns.

A long retirement needs a combination of patience and strategy.

» Tax Planning: Use New MF Capital Gains Tax Rules Wisely

– Equity MF: LTCG above Rs. 1.25L taxed at 12.5%.
– STCG on equity MFs is taxed at 20%.
– Debt MF gains taxed as per your slab (old or new regime).
– Plan redemptions to avoid tax surprises.
– Use SWPs or staggered withdrawals to manage tax impact.
– Consider harvesting LTCG up to Rs. 1.25L yearly, tax-free.

Proper exit planning ensures more money stays in your hands.

» Surrender Traditional Insurance Plans (If Any)

– If you hold LIC money-back, endowment, or ULIP plans,
– Check surrender value and policy status.
– These plans give low returns and poor liquidity.
– Redeem and reinvest in mutual funds if lock-in is over.
– Take help of a CFP for proper exit and reallocation.

Insurance should protect life, not mix with investments.

» Risk Factors to Prepare For

– Health expenses are a major risk in your case.
– Unexpected inflation is another risk for long retirements.
– Market corrections can reduce corpus temporarily.
– Sequence of return risk: if early retirement years see poor returns.
– Plan with 5 years of safe money always kept aside.
– Diversify between equity, debt, and hybrid assets.

Risk preparation avoids emotional decisions and corpus erosion.

» Estate Planning and Future Security

– Write a Will covering all major assets.
– Nominate across MF, stocks, NPS, EPF, PF, and FDs.
– Maintain joint holding with spouse where applicable.
– Review Will and nominations every 5 years.
– Share asset details with your family in a secure record.

This avoids legal hassles and protects your family later.

» Finally

– You are already on the right track.
– Your assets are strong and well diversified.
– SIPs will add strength over the next 5 years.
– With proper withdrawal strategy, you can live worry-free till 2060.
– Use professional support for rebalancing and tax-efficient drawdown.
– You don’t need to chase new products.
– Just protect, monitor, and guide the corpus.

Your financial independence is well within reach.

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

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