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Ramalingam Kalirajan |10872 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 - Jul 11, 2025Hindi

I am 56 yrs now on retirement in 2029 should have approx 25 lakhs in pf and vpf,ppf 3 lakhs,sip 6 lakhs,gratuity 20 lakhs nps around 25,fd 5 lakhs and have a house in mumbai worth 1.25 crore,single person,husband passed away,one son who is abroad

Ans: You have built a very strong financial base. At age 56, with retirement in 2029, your readiness shows care and planning. You have diversified well across PF, NPS, mutual funds, and fixed deposits. Your home adds safety. Being single, your plan must give you financial confidence and independence post-retirement.

Below is a 360-degree guidance to structure your finances and prepare for peaceful retirement.

» Understand Your Current Position

– Rs.25 lakhs in PF and VPF is a stable and growing base.
– PPF with Rs.3 lakhs adds to safe and tax-free corpus.
– SIP value of Rs.6 lakhs is good but needs more buildup.
– NPS with Rs.25 lakhs gives long-term pension income.
– Rs.20 lakhs from gratuity will be a large tax-free chunk.
– Rs.5 lakhs in FD is good for liquidity.
– A self-owned home gives you rent-free peace.
– You have no dependent family expense right now.

» Identify Gaps and Areas of Action

– You are 4 years away from retirement.
– Time is limited, but corpus can still grow.
– Health insurance must be reviewed.
– Monthly budget for post-retirement must be estimated.
– SIP needs more allocation for future withdrawals.
– Emergency and contingency planning must be done.

» Create a Retirement Cash Flow Estimate

– Estimate your future monthly living cost today itself.
– Include food, health, utilities, society maintenance, travel, etc.
– Account for inflation. Future expenses will be higher.
– Budget should be ready for 30+ years post-retirement.
– Add buffer for unplanned medical or home repairs.

» Build a Retirement Income Structure

– Your retirement corpus should give monthly income.
– It must also grow to beat inflation.
– You need safety, liquidity, and returns—all together.
– Don’t depend only on PF or NPS.

» Categorise Assets into Three Buckets

– Short-Term Bucket:
Keep 2 to 3 years’ expenses in safe places.
FD, savings account, or liquid mutual fund is good.

– Medium-Term Bucket:
For 4 to 7 years of expenses, use hybrid mutual funds.
These balance safety and returns.

– Long-Term Bucket:
For 8 years and beyond, use equity mutual funds.
These grow corpus and fight inflation.

» NPS Withdrawal Planning in 2029

– You can withdraw 60% as lumpsum.
– That amount is tax-free currently.
– Use this part for medium- and long-term corpus.

– 40% will go to pension product mandatorily.
– It gives regular monthly income for life.
– You cannot withdraw this portion fully.

– Use the monthly pension for base regular income.

» Gratuity and PF Should Not Be Used for Early Expenses

– Both are safe, guaranteed, and tax-free components.
– Don’t use PF or gratuity money for gifting or house renovation.
– Treat it as your long-term financial security.

» PPF Can Be Continued Beyond Maturity

– You can extend PPF after 15 years.
– Keep extending it in blocks of 5 years.
– Interest remains tax-free and risk-free.

» Mutual Funds Must Be Continued

– SIP value of Rs.6 lakhs must grow more.
– Keep investing monthly till retirement.
– Choose regular plans through MFD with CFP credentials.
– Regular plans give service and hand-holding during retirement.
– Avoid direct funds as they lack personalised advice.
– Emotional mistakes and wrong withdrawals are common in direct route.
– Regular funds help with asset allocation, rebalancing, and safety.

» Avoid Index Funds if Part of Portfolio

– Index funds follow the market blindly.
– They don’t reduce downside during market crashes.
– They don’t suit people close to retirement.
– Actively managed funds give more control and flexibility.
– Fund managers manage risks better in volatile markets.
– Stay invested in active mutual funds through expert guidance.

» Review and Increase SIP Till Retirement

– You have 4 earning years left.
– Try to increase SIP amount every year.
– Use any bonus or raise to boost investments.
– SIP will give you reliable future cash flow.
– Equity mutual funds give long-term tax-efficient growth.
– Don’t stop SIP unless there's an emergency.

» Emergency Fund Must Be in Place

– Keep 6 months' expenses in savings or liquid fund.
– This avoids panic selling of investments.
– FD alone is not enough for sudden medical need.

» Have Proper Health Insurance for Yourself

– Medical expenses are unpredictable in retirement.
– Government hospitals are not always an option.
– Take a senior citizen health insurance plan.
– Look for individual cover of Rs.10 lakh or more.
– Also explore super top-up cover for higher protection.
– Don’t depend only on employer cover post-retirement.

» Write a Will to Avoid Future Confusion

– You are the sole owner of your assets.
– Your son lives abroad.
– Make a Will and register it.
– It gives peace and clarity to your child later.
– Nomination is not the same as Will.
– Include all financial and physical assets.

» Keep All Documents Organised in One Place

– Keep soft and hard copies of all investments.
– Share details with your son or trusted person.
– Keep policy numbers, passwords, and contact details noted.
– This saves time and avoids confusion in future.

» Avoid Insurance Products as Investment

– Don’t take ULIP, endowment, or pension policies now.
– They give poor returns and lack liquidity.
– No need for life insurance at this stage.
– Your son is grown and independent.
– Focus on medical and financial protection only.

» Don’t Sell Your House for Retirement Income

– Your house in Mumbai is an asset of value.
– But don’t depend on its sale for income.
– Reverse mortgage is not efficient for everyone.
– Keep the house for your own living security.
– If ever required, you may think of partial rental.
– But not now. First exhaust other financial assets.

» Avoid New Loans or Liability Before Retirement

– Don’t cosign loans for anyone.
– Don’t take fresh personal loans or credit.
– Keep your credit record clean.
– Use credit card only for convenience, not funding lifestyle.

» Don’t Be Emotional in Gifting or Helping

– Support your son emotionally.
– But avoid transferring big assets or money quickly.
– Keep your financial strength intact.
– You may help in small amounts when stable.
– Think long-term safety over short-term sentiment.

» Track Expenses and Income Every Month

– Make a small book or Excel to write expenses.
– Do it even during working years.
– This gives you control and awareness.
– Helps avoid waste and leakage.
– Also builds habit for post-retirement budgeting.

» Plan Retirement Year Corpus Structuring in Advance

– In 2029, you’ll receive large funds together.
– Don’t keep it idle in bank account.
– Take help of a CFP to structure it wisely.
– Divide into income-generating and growth portfolios.
– Keep withdrawals planned, not random.

» Avoid Emotional Investment Mistakes Post Retirement

– Don’t panic when market falls.
– Don’t follow news headlines blindly.
– Stay invested through guidance.
– Withdraw only what is planned.
– Don’t chase high return schemes or tips.
– Safety and stability is more important than high return now.

» Meet a Certified Financial Planner Every Year

– A CFP helps monitor your retirement goals.
– Gives advice on how much to withdraw and where from.
– Helps rebalance between debt and equity.
– Keeps your portfolio tax efficient.
– Also helps you avoid mistakes due to emotion or news.

» Finally

– You have built a solid foundation already.
– Continue SIPs and increase them where possible.
– Health insurance and estate planning are next big steps.
– Mutual funds should be used for income and growth together.
– NPS, PF, gratuity, and house will give stability.
– With planning and calmness, you can enjoy peaceful retired life.
– Your preparation is strong. Just take the right steps now.

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.