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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 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 17, 2025Hindi

Hi, I am 53 years old and working in a private company. My monthly in-hand salary is 1.10 lacs. My monthly expenditure is around 80-k. I have around 23 lacs in EPF, 3 lacs in PPF, and and 18 lacs in FD. I am investing 20 of my basic salary in EE VPF. I don't have any other liabilities. I am paying a rent of Rs 16000 per month. Last year I had sold my 1 BHK flat and invested the amount in FD (the same 18 lacs that I have mentioned earlier). I have 1 lac in a mutual fund. wanted to buy a two-BHK house; my maximum budget is Rs45-50 lacs. Please suggest: 1) Is it advisable to buy a house as I have only 4.5 years left for retirement? 2) How to save money so that I can get Rs 70000-80000 per month post-retirement? Where to invest 3) My son is in 11th Std. How to manage his education cost post-retirement?

Ans: You’ve shown good discipline. Saving Rs.23 lakhs in EPF and Rs.18 lakhs in FD is not easy. At 53, your focus should shift fully towards building a retirement-ready portfolio. Let's now look at this from a 360-degree view and answer all parts step by step.

? Current Financial Snapshot

– Your salary of Rs.1.10 lakh is decent and consistent.
– Monthly expenses are Rs.80,000 including rent.
– You save around Rs.30,000 each month.
– You hold Rs.23 lakhs in EPF, Rs.3 lakhs in PPF, and Rs.18 lakhs in FD.
– VPF is also building your retirement pool.
– No loans or liabilities is a big advantage.
– Your son’s education needs proper planning soon.

? Real Estate Purchase Decision

– Buying a house at this stage needs careful thought.
– You have only 4.5 years to retirement.
– Budgeting Rs.45–50 lakhs for a 2 BHK is high now.
– This move will lock most of your funds in one asset.
– You will reduce your liquidity, which is dangerous post-retirement.
– Real estate needs maintenance and taxes too.
– You’ll also lose rental income from Rs.18 lakhs FD.
– So, buying now is not wise from retirement view.
– Keep flexibility, avoid tying up funds in property.
– Rental home is cheaper than buying at this point.
– Your current Rs.16,000 rent is manageable.

? Retirement Income Goal

– You want Rs.70,000–80,000 per month post-retirement.
– This equals Rs.8.4–9.6 lakhs yearly.
– For that, you need a strong retirement corpus.
– With 4.5 years to build, each rupee matters.
– Your EPF, PPF and VPF will help for base support.
– But FD interest is not enough for inflation-beating returns.
– Shift money into proper mutual fund allocations now.
– Use Certified Financial Planner to design a mix.
– Equity exposure will give better long-term growth.

? Managing Post-Retirement Cash Flow

– Divide your needs into essential and lifestyle goals.
– Essentials like food, health, rent need regular income.
– Lifestyle like travel, gifts, hobbies need flexible income.
– Use Systematic Withdrawal Plans (SWP) from mutual funds.
– They give regular cash flow monthly.
– Avoid using FDs for monthly income.
– FD returns may not beat inflation in future.
– Instead, use hybrid and equity mutual funds.
– Equity funds give better tax treatment and inflation protection.

? Why Not Real Estate for Income?

– Property doesn’t give fixed income like mutual funds.
– Rentals can be uncertain and taxable.
– Maintenance cost can eat your rent earnings.
– Resale value is uncertain, especially after age 60.
– You lose liquidity and flexibility.
– Medical emergency cannot wait for property sale.
– Mutual funds offer easier access and less stress.

? Role of EPF and VPF

– EPF corpus of Rs.23 lakhs is a solid base.
– Continue with VPF till retirement for sure.
– That gives safe, guaranteed savings.
– But this alone cannot give Rs.80,000 monthly.
– EPF interest rate may fall later too.
– It is good for stability, not for full growth.

? What to Do With the Rs.18 Lakh in FD

– FD interest is low and taxable.
– You must shift part of it for better growth.
– Use STP (Systematic Transfer Plan) to equity mutual funds.
– Don’t invest full amount at once.
– Take help from Certified Financial Planner to start this.
– Keep Rs.3–5 lakhs in FD for emergencies.
– Balance should work harder in mutual funds.
– Choose only actively managed mutual funds.
– Avoid index funds.

? Why Avoid Index Funds?

– Index funds just follow market blindly.
– They don’t adjust to changing conditions.
– In bad years, they fall with the market.
– Actively managed funds adjust to risks better.
– Fund managers choose sectors and stocks wisely.
– That gives higher potential returns and less risk.

? Retirement Investment Allocation Plan

– Divide your investments across 3 buckets.
– Bucket 1: Keep 1-2 years’ expenses in liquid funds.
– Bucket 2: Keep 5–7 years in hybrid funds.
– Bucket 3: Keep long-term growth in equity funds.
– This mix gives safety and growth.
– Helps you manage retirement withdrawals smoothly.

? How to Reach Rs.80,000 Monthly Goal

– Invest Rs.30,000 monthly in SIPs till retirement.
– Use mix of hybrid and equity funds.
– Reinvest FD and future savings also.
– By retirement, corpus can support Rs.80,000 monthly.
– Keep reviewing portfolio with CFP every year.
– Don’t stop investing in market dips.
– Instead, increase SIP when market is low.

? Tax Planning After Retirement

– Equity funds now have new tax rules.
– LTCG above Rs.1.25 lakh taxed at 12.5%.
– STCG taxed at 20%.
– Debt fund gains taxed as per slab.
– So, hold equity funds for long term.
– Use SWP for tax-friendly monthly income.
– Avoid large redemptions at once.
– Plan exits carefully with your CFP’s help.

? Managing Your Son’s Education

– He’s in 11th standard now.
– Graduation costs will start within 2 years.
– You must plan from now itself.
– Estimate education costs and set a separate goal.
– Start SIP for this now from monthly savings.
– Use hybrid or short-term mutual funds.
– Don’t touch retirement funds for education.
– Keep goals separate for clarity and tracking.

? Emergency Corpus for Family Safety

– Keep Rs.3–5 lakhs in liquid funds for emergencies.
– This covers medical, rent or family issues.
– Never invest emergency fund in equity.
– Use only highly liquid, safe funds.
– Review amount yearly and top-up if needed.

? Insurance Check

– At 53, health insurance is very important.
– Do you have personal health insurance now?
– If not, get one before age increases premium.
– Avoid policies with co-pay or limits.
– Also take one for your son if not covered.
– Don’t rely only on employer health plan.
– They stop at retirement.

? What to Avoid Now

– Don’t buy property at this stage.
– Don’t put more money in FD.
– Don’t delay SIP investments anymore.
– Don’t mix insurance and investment.
– Don’t depend only on EPF for retirement.
– Don’t invest directly without CFP guidance.
– Don’t buy index funds or ETFs.

? Why Regular Mutual Funds via CFP Are Better

– Direct funds look cheap but offer no support.
– You won’t get regular rebalancing advice.
– No emotional hand-holding in market crashes.
– Regular plans via MFD with CFP give structure.
– They track goals and help avoid costly errors.
– You get personalised fund selection.
– That brings better results and peace of mind.

? Action Plan Summary

– Don’t buy the 2 BHK now.
– Keep renting and use funds for retirement.
– Shift FD slowly to mutual funds via STP.
– Continue VPF till retirement.
– Start SIP of Rs.30,000 monthly in active mutual funds.
– Set separate SIP for your son’s college expenses.
– Keep Rs.3–5 lakh as emergency fund.
– Take personal health insurance for full family.
– Review everything yearly with your CFP.

? Finally

– You’ve managed your money well till now.
– At this stage, focus must shift to safety and income.
– Don’t take big risks with real estate.
– Build retirement portfolio with proper structure.
– Stay invested. Stay committed.
– Your future can be worry-free if you act now.

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

Asked on - Jul 23, 2025 | Answered on Jul 23, 2025

Thank you so much, you have explained with so much details, it's going to be really helpful. Than you once again.

Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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