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Ramalingam Kalirajan |10876 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 18, 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 02, 2025Hindi

HI sir am 55 year with annual income of 15 lacs my investment are as below One full paid flat in chennai - 50 lacs - Cr mrkt vlue 72 lacs MF investment cr value _ 1.80 cr equity investment cr value - 1.3 cr Real estate Forced sale value - 1 cr I need to allocate for my daughter education who will be starting her UG by next year want to keep aside some 25-40 lacs i want some steady passive income once am 60 monthly say 1 lac. i stay in a rented house and have let out my flat for 20k per month apart from this have some good gold saved for my daughter. Have loans for 12 lac as on date. advise on how to plan to get a monthly regular income from above by not eroding the capital

Ans: You have built a strong portfolio.
Your focus on your daughter’s future and your own financial stability is appreciable.

Let’s now work through each of your priorities in detail.

» Understanding Your Current Financial Snapshot

– Your flat in Chennai is rented out for Rs. 20,000/month.
– Its current market value is Rs. 72 lakh.
– Mutual funds are valued at Rs. 1.80 crore.
– Direct equity holdings are Rs. 1.3 crore.
– Real estate (excluding the Chennai flat) has forced sale value of Rs. 1 crore.
– You have gold saved for your daughter.
– Outstanding loan amount is Rs. 12 lakh.
– You are staying in a rented house.
– You want to set aside Rs. 25–40 lakh for your daughter’s UG education.
– You want a steady Rs. 1 lakh per month after age 60.

This is a very strong base. You have enough to meet both your goals comfortably.

» Plan for Daughter’s Education – 2026

– You wish to allocate Rs. 25 to 40 lakh for UG expenses.
– Since she’s starting UG next year, keep funds safe and liquid.
– Choose ultra short-duration or low-duration debt mutual funds via regular plan.
– Avoid equity or aggressive hybrid funds for this portion.
– These debt funds can give better returns than FDs and remain liquid.
– Use systematic withdrawal plan (SWP) for annual or semi-annual college fees.
– Gold savings can be used for PG or marriage later.
– Keep Rs. 5 lakh buffer for emergency from the education corpus.

Allocate this amount immediately in phased manner from mutual funds.

» Outstanding Loan of Rs. 12 Lakh – Action Plan

– Check if this is a personal loan or secured loan.
– If interest rate is above 9%, consider partial repayment.
– Don’t liquidate equity or MF fully to clear the loan.
– Instead, redeem Rs. 5-6 lakh from mutual funds or real estate only.
– Continue remaining EMIs. Let MF portfolio grow.

Clearing high-interest loans early is smart. But don’t disturb wealth creation too much.

» Housing and Rent Situation – Review

– You’re staying in a rented house. Your flat is rented out for Rs. 20,000/month.
– Evaluate moving back into your own flat after retirement if feasible.
– This saves rent outgo and increases monthly savings post-retirement.
– If not possible, continue renting and earning from your flat.

Don’t sell your flat now. Keep it for steady rent income or self-use later.

» Creating Passive Monthly Income of Rs. 1 Lakh Post 60

Your aim is clear:
From age 60, generate Rs. 1 lakh/month (Rs. 12 lakh/year) without eroding capital.

Let’s look at how this can be structured from age 60.

MF Corpus Growth by Age 60
– Current MF: Rs. 1.80 crore.
– 5 years of moderate growth (say 9%) could take this to Rs. 2.75 crore.
– Equity corpus of Rs. 1.3 crore could become around Rs. 2 crore.
– Total MF + Equity: ~Rs. 4.75 crore.

Asset Allocation From Age 60
– Shift 60% to conservative hybrid and balanced advantage funds.
– Keep 30% in equity mutual funds for growth.
– Keep 10% in short-term debt for liquidity buffer.

Using SWP From Mutual Funds
– Use SWP from hybrid or balanced funds to withdraw Rs. 1 lakh/month.
– Expected withdrawal rate can be 3%–4% of corpus yearly.
– This gives you Rs. 12 lakh annually without touching principal much.
– Hybrid funds give moderate growth and lower volatility.
– Avoid annuities. They give poor returns and block capital.

Rental Income
– Rs. 20,000/month rental income continues.
– This can increase with inflation.
– So total monthly income becomes Rs. 1.2 lakh or more.

Taxation Awareness
– SWP from equity-oriented funds is taxed.
– LTCG beyond Rs. 1.25 lakh annually is taxed at 12.5%.
– STCG taxed at 20%.
– Debt fund gains taxed as per slab.
– Regularly redeem units with highest cost (FIFO method).
– Use capital gain exemptions where possible.
– A Certified Financial Planner can optimise this further.

Emergency Buffer
– Keep Rs. 15–20 lakh separately in liquid or short-term debt funds.
– This helps in any medical or house-related emergency post 60.
– This should not be touched for monthly income needs.

Don’t Redeem Equity Shares Fully
– Keep your direct equity for long-term growth.
– Trim high-risk or non-dividend stocks gradually.
– Shift some part to mutual funds for steady withdrawal.

» Real Estate Asset – Forced Sale Value Rs. 1 Crore

– Don’t count this in retirement plan actively now.
– This can be a backup reserve.
– Consider selling if maintenance becomes difficult post age 65.
– Invest proceeds in mutual funds or SWP-based schemes.
– Or use it to support daughter’s PG or marriage later.

Let this be your future flexi-asset.

» Restructure Portfolio for Future Safety

Your mutual funds and equity are quite strong.
But consider these suggestions to improve structure:

– Move from direct funds to regular plans via MFD who is a CFP.
– Direct plans lack personal guidance. Wrong moves can hurt wealth.
– Regular plan through a Certified Financial Planner ensures rebalancing, SWP planning, tax efficiency.
– Regular funds give higher risk-adjusted returns in the long term with correct allocation.

Avoid DIY investing beyond a point. In retirement, stable guidance is more important than saving commission.

» Avoid These for Regular Income

– Don’t use index funds.
– They offer no downside protection.
– No flexibility to shift sectors.
– Actively managed funds adjust to market cycles better.
– They reduce volatility during crisis periods.

– Don’t invest in annuities.
– Returns are poor. Capital gets locked.
– No inflation adjustment in most annuities.
– Post-death, your heirs may get little or nothing.

Avoid these traps. Stay flexible and growth-oriented with moderate risk.

» Gold for Daughter – Ideal Usage

– Your gold can be used for her wedding or long-term wealth transfer.
– Don’t sell it now for UG needs.
– You can convert some physical gold to Sovereign Gold Bonds (SGBs) for future if needed.
– But only if holding for 8 years or more.

Treat this as her emotional and financial reserve.

» Estate Planning – Prepare Early

– Write a registered Will by age 60.
– Clearly mention asset transfer to daughter or spouse.
– Include MF, equity, real estate, gold, and insurance.
– Assign nominees correctly in all investments.
– Review once in 3 years.

Good estate planning avoids legal issues later.

» Suggested Allocation Summary (At Age 60)

– Mutual Funds (Hybrid + SWP focus): Rs. 2.5–3 crore
– Equity MF (Growth allocation): Rs. 1–1.2 crore
– Short-term Debt / Liquid Funds (Emergency): Rs. 20 lakh
– Rental Income: Rs. 20,000/month
– Real estate reserve (long-term): Rs. 1 crore
– Gold reserve (for daughter): As is

This setup supports your Rs. 1 lakh/month target easily.

» Finally

You have built your wealth wisely and carefully.
Your portfolio is strong and diversified.
You are now in a position to enjoy financial freedom.

With some reallocation, SWP planning, and focus on steady funds, your post-retirement life can be stress-free.

Avoid real estate additions. Avoid direct plan investing.
Avoid annuities and index funds.

Focus on goal-based investing with professional guidance.
Ensure your money works for you, not the other way around.

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.