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Turning 53, Rs. 2.63 Cr in Savings: How to Invest for Retirement in 7 Years?

Ramalingam Kalirajan |8462 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jan 20, 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 Amit on Jan 05, 2025Hindi

Hi Sir, I am 53 yrs old, working professional , and have following pointers towards my financial status : - Monthly take home - 3 lac / month (after NPS and PF etc) - investing in NPS- 27 K / month - deduction for PF - 55 K / month - NPS (so far ) accumulated - 22Lac - PF - accumulated - 51 lac - Post office saving (MIS) - 1.2 Cr (in name of wife and daughters) - Jeevan shree LIC will mature and will get around 24 lac in 2027, where shall I reinvest it, pl suggest which MF? - Have enough gold, saved for marriage of my 2 daughters, both are qualified and about to start earning...(in 1~2 yrs), even higher studies expanse is planned or done. - 7 lac in sukanya samridhi yozna - Have Floor worth 1.3 Cr in ggn, where i am staying - have land worth 60 lac - liabilities - (a) 2 of my daughters marriage, and there is no loan, (b) except me and my wife old age expanse, there is no more liability. - Currently have SIP- 2000 Rs / month, in HDFC mid cap, and this is exactly my question, which MF should i invest / add to build a sufficient corpus before i retire in next 7 yrs, Ap

Ans: You have done well in building financial security. Let’s analyse key areas of your finances to suggest the best investment strategies for your goals.

Current Investments and Assets
Income and Savings: Your monthly take-home of Rs 3 lakh is substantial.

NPS and PF Contributions: These deductions ensure long-term stability and tax benefits.

Accumulated Wealth: NPS (Rs 22 lakh) and PF (Rs 51 lakh) provide a solid foundation for retirement.

Post Office Savings: Rs 1.2 crore ensures liquidity and low-risk returns.

Sukanya Samriddhi Yojana: Rs 7 lakh secures your daughters’ financial needs.

Gold Reserves: You have adequately planned for daughters’ weddings.

Real Estate: Your home (Rs 1.3 crore) and land (Rs 60 lakh) add value to your net worth.

Jeevan Shree LIC: The maturity corpus of Rs 24 lakh in 2027 offers reinvestment opportunities.

Current SIP: Rs 2000 in HDFC Midcap Fund is a start, but needs scaling for better results.

Goals to Address
Retirement Corpus: You need a plan to accumulate funds for a comfortable retirement in 7 years.

Daughters’ Marriages: This major expense requires careful allocation of funds.

Old-Age Expenses: Ensure enough liquidity for you and your wife post-retirement.

Enhancing SIP Investments for Retirement
1. Increase SIP Contributions

Your current SIP of Rs 2000/month is insufficient.

Allocate Rs 50,000–70,000 per month towards SIPs in equity mutual funds.

Increase SIP annually by Rs 5000 to counter inflation.

2. Choose a Diversified Equity Portfolio

Invest in Large-Cap Funds for stability and steady returns.

Add Flexi-Cap Funds for balanced exposure across market capitalisation.

Continue with Mid-Cap Funds for higher growth potential.

Allocate a smaller portion to Small-Cap Funds for long-term wealth creation.

3. Tax-Efficient Funds

Select Equity Linked Savings Schemes (ELSS) to save taxes under Section 80C.

Review tax implications to optimise your net returns.

Reinvesting the LIC Maturity Amount
1. Lump Sum Investment Strategy

Invest Rs 24 lakh from LIC maturity in balanced advantage funds or hybrid equity funds.

These funds provide moderate risk and consistent returns.

Rebalance annually to maintain desired asset allocation.

2. Create a Systematic Withdrawal Plan (SWP)

Post-retirement, use an SWP for regular income from mutual funds.

This ensures a steady cash flow for old-age expenses.

Managing Post Office Savings
1. Diversify Beyond Fixed-Income Instruments

Redeploy part of the Rs 1.2 crore in equity mutual funds.

Use staggered investments via Systematic Transfer Plans (STPs).

2. Maintain Liquidity

Retain 30–40% of savings in fixed-income instruments for emergencies.
Investment Allocation for Long-Term Growth
1. Create an Asset Allocation Plan

Equity: 60% for high growth.

Debt: 30% for stability.

Gold and Others: 10% for diversification.

2. Review and Rebalance Regularly

Consult a Certified Financial Planner to review your portfolio annually.

Adjust allocation based on market conditions and financial goals.

Addressing Daughters’ Marriages
Adequate gold and Sukanya Samriddhi Yojana funds already ensure preparedness.

Avoid liquidating long-term growth assets like equity funds prematurely.

Securing Old Age
1. Build a Retirement Corpus

Target a retirement corpus based on estimated expenses and inflation.

Use SIPs in equity and balanced funds to grow your corpus.

2. Medical and Emergency Fund

Create a separate medical corpus with 5–7% of your total assets.

Keep this in debt mutual funds or high-interest fixed deposits.

Final Insights
You are well-positioned to achieve financial independence. Scaling up SIPs in equity mutual funds will strengthen your retirement corpus. Diversifying the maturity amount from LIC into hybrid funds will enhance returns. Regular reviews with a Certified Financial Planner will ensure your investments remain aligned with goals. Continue maintaining a disciplined approach, and you’ll secure a financially stable future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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