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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 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

Question by ricky on Jul 07, 2025Hindi

Dear Sir, i am 48 years old working with a pvt company my monthly expenses are ard 50,000 INR - how much will i need at the age of 58 ie my retirement

Ans: You’re already thinking about retirement at 48. That’s a wise and timely step.
Planning early gives you more control. You can build a worry-free and peaceful retired life.

Below is a complete and in-depth answer, keeping in mind your lifestyle and future needs.

? First Understand the Role of Inflation
– Inflation reduces the value of money every year.
– Rs.50,000 today may not be enough after 10 years.
– Expenses will double roughly in 10–12 years.
– So, you must plan not for today’s cost, but future cost.
– This is the most common mistake in retirement planning.

? Know What You Really Need Monthly After Retirement
– Today your monthly cost is Rs.50,000.
– At 58, it may become Rs.1 lakh or more per month.
– This assumes average inflation of around 7–8%.
– So, plan for future monthly need, not just today’s.
– This helps you stay prepared and stress-free later.

? Work Out Retirement Corpus to Cover Expenses for Life
– You may live till age 85 or even 90.
– So, you need 30+ years of income after retirement.
– Your retirement corpus should generate income for all these years.
– It must beat inflation and yet be safe.
– You must not outlive your money.
– This is the core goal of retirement planning.

? Don’t Depend on EPF or PPF Alone
– These will not be enough on their own.
– Their return is fixed and taxable.
– EPF corpus may last only few years.
– PPF is too small and cannot give monthly income.
– So, you need a bigger, balanced retirement corpus.
– It should combine safety, income, and growth.

? Estimate the Corpus Needed at Retirement
– You may need around Rs.2–3 crore minimum by age 58.
– This depends on expected expenses, lifestyle, health, and inflation.
– If expenses grow faster, you will need more corpus.
– Better to overestimate than underestimate.
– This amount will generate income through Systematic Withdrawal Plan (SWP).

? SWP is Better Than Pension or Annuity
– Don’t go for annuity or pension plans.
– They offer low returns.
– No inflation protection and no flexibility.
– In SWP, you withdraw monthly from mutual fund.
– Your money stays invested and grows.
– You keep full control and ownership of the corpus.

? Stay Away from Index Funds
– Index funds don’t protect in falling markets.
– They just follow the market blindly.
– No professional selection of stocks.
– Active funds offer better research and management.
– They also adjust to market cycles better.
– For long-term needs like retirement, active funds work best.

? Avoid Direct Mutual Funds – Prefer Regular Plans with Guidance
– Direct plans give no support or advice.
– You may choose wrong fund or asset mix.
– Regular plans through Certified Financial Planner-backed MFD is safer.
– You get personalised reviews, rebalancing, and alerts.
– In retirement, peace matters more than tiny cost saving.

? Divide the Retirement Corpus into Two Buckets
– Income Bucket gives monthly income from age 58.
– Growth Bucket grows till you need it later.
– This method protects your future years.
– It also reduces stress on income funds.
– It helps refill the income bucket later.

? How Much Monthly Income Will You Need After Retirement?
– At 58, your Rs.50,000 expense may become Rs.1 lakh.
– After 70, it may rise to Rs.1.5 lakh monthly.
– You must plan to meet these increases.
– Otherwise, your money will fall short too early.
– Plan for rising expenses due to inflation.

? Include Health Insurance in Your Plan
– After 60, medical costs will be high.
– No employer will cover you after retirement.
– Buy a large, family floater plan today.
– Keep increasing sum insured every 2–3 years.
– Don’t depend only on savings for medical cost.

? Don’t Keep All Money in Fixed Deposit
– FD returns are taxable and low.
– FD doesn’t beat inflation.
– Interest may reduce in future.
– Also, no flexibility in withdrawals.
– Instead, use a mix of funds for income and growth.

? Use STP to Move Lumpsum Slowly into Growth Funds
– Don’t invest full amount at once into equity.
– Start with liquid fund.
– Then use Systematic Transfer Plan to shift into equity funds.
– This gives better cost averaging and safety.
– It helps enter the market without worry.

? Avoid Real Estate for Retirement Planning
– Real estate has low rental yield.
– Buying and selling is difficult.
– No monthly income unless tenant is found.
– Maintenance costs are high.
– Better to keep liquid, safe investments for retirement.

? Use Regular Mutual Funds with Active Management
– These are better than index or direct funds.
– You get better service, expert fund management.
– Also, annual reviews and tracking support.
– Good for people who don’t want to monitor daily.
– It also gives family members peace of mind.

? Build Emergency Fund Separately
– Keep Rs.10–15 lakh in liquid funds.
– This should not be part of retirement corpus.
– Use for emergency or medical need.
– This prevents disturbance to retirement investments.

? Involve Family in Planning
– Discuss your retirement plan with spouse.
– Make them aware of investments and documents.
– Name them as nominee or joint holder.
– This avoids confusion in your absence.

? Avoid Insurance-Cum-Investment Plans
– ULIPs or traditional insurance give poor return.
– They lock money and have hidden charges.
– If you have such policies, surrender them.
– Reinvest in mutual funds for better transparency and return.
– Separate insurance and investment always.

? Plan Retirement in Phases
– Phase 1: Age 58 to 70 – active life, travel, hobbies.
– Phase 2: Age 70 to 80 – lower expenses, medical cost rises.
– Phase 3: Age 80+ – mostly health and care cost.
– Design investment accordingly.
– More equity in early phase, more debt later.

? Final Insights
– You are taking the right step now.
– Planning at 48 gives you time to build.
– Start investing monthly in mutual funds.
– Use equity, hybrid, and conservative funds.
– At retirement, use SWP for monthly income.
– Avoid annuity, index funds, direct funds, real estate.
– Choose regular funds with Certified Financial Planner help.
– Build emergency fund and health insurance.
– Review every year. Involve family. Stay disciplined.

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

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.