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Ramalingam Kalirajan  |5092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 04, 2024

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 - May 31, 2024Hindi

Sir i am 61 retired. I am single staying with my mother. We don't have health insurance but have 7 crores in fixed deposits and anither 10 crores in nsdl as tax free bonds and equity. Rent we get 38k I am not sure will this be enough due to high inflation which keeps increasing every year. Kindly advice.

Ans: Firstly, congratulations on your diligent savings and wise investments. You have built a substantial portfolio with Rs. 7 crores in fixed deposits, Rs. 10 crores in tax-free bonds and equity, and an additional rental income of Rs. 38,000 per month. Your concern about inflation and future financial security is valid. Let's explore a comprehensive plan to ensure your and your mother's financial well-being.

Understanding Your Current Financial Situation

Your current assets provide a solid foundation. Fixed deposits offer safety, tax-free bonds provide steady income, and equities ensure growth potential. Your rental income adds a steady cash flow. However, inflation can erode purchasing power over time, making it essential to plan strategically.

Evaluating Your Income Sources

Fixed Deposits: Rs. 7 crores in fixed deposits provide safety and regular interest income. The interest rates on FDs have been relatively low, impacting overall returns.

Tax-Free Bonds and Equity: Rs. 10 crores in tax-free bonds and equity offer a mix of stability and growth. Tax-free bonds provide regular interest without tax implications, while equities offer potential for capital appreciation.

Rental Income: Rs. 38,000 per month adds Rs. 4.56 lakhs annually. This can cover a portion of your living expenses, but may not suffice due to inflation.

Addressing Inflation Concerns

Inflation is a key concern, as it reduces purchasing power. Your portfolio should outpace inflation to maintain your lifestyle. Let's break down strategies to manage and mitigate inflation risk.

Diversifying Your Investments

Balanced Portfolio: Maintain a balanced portfolio with a mix of fixed income, equities, and other investment options. This helps in managing risk and returns.

Equity Exposure: Equities typically outpace inflation over the long term. Maintain a portion of your portfolio in equities to ensure growth.

Debt Instruments: Diversify within debt instruments, including corporate bonds, government securities, and fixed deposits, to manage interest rate risk.

Implementing Systematic Withdrawal Plan (SWP)

SWP Setup: Post-retirement, set up an SWP from your mutual fund investments to ensure regular monthly income.

Capital Preservation: Withdraw a portion of returns, keeping principal invested for ongoing growth.

Health Insurance Planning

Importance of Health Insurance: Health insurance is crucial to protect against high medical expenses. Lack of coverage can lead to financial strain.

Senior Citizen Health Plans: Consider purchasing senior citizen health insurance plans. These offer coverage tailored to older individuals.

Comparative Analysis: Compare different health insurance plans based on coverage, premiums, and claim settlement ratio.

Tax Planning

Tax-Free Bonds: Utilize tax-free bonds to enjoy tax-free interest income, enhancing post-tax returns.

Tax-Efficient Withdrawals: Plan withdrawals from investments to minimize tax liability. Utilize long-term capital gains tax benefits where applicable.

Regular Review: Periodically review tax-saving investments and strategies to optimize tax efficiency.

Estate Planning

Will Creation: Create a will to ensure your assets are distributed according to your wishes. This avoids legal complications.

Nomination Updates: Ensure all investments have updated nominations to facilitate smooth transfer to beneficiaries.

Trust Formation: Consider forming a trust for managing and distributing your assets, especially if you have complex financial arrangements.

Emergency Fund

Adequate Fund: Maintain an emergency fund covering 6-12 months of living expenses. This provides a buffer against unexpected expenses.

Liquid Investments: Keep the emergency fund in liquid investments, such as savings accounts or short-term fixed deposits, for easy access.

Long-Term Care

Long-Term Care Insurance: Explore long-term care insurance options to cover potential future healthcare needs, ensuring peace of mind.

Assisted Living: Consider potential costs of assisted living or home care services as part of long-term planning.

Surrendering Traditional Insurance Policies

Reevaluation: Evaluate traditional insurance policies like LIC, ULIPs, and investment-cum-insurance plans. These often have high costs and lower returns.

Reinvestment: Surrender such policies and reinvest in mutual funds or other higher-yielding investments for better returns.

Professional Guidance

Certified Financial Planner: Engage with a Certified Financial Planner for personalized advice, tailored to your financial goals and risk tolerance.

Periodic Reviews: Conduct periodic reviews with your planner to adjust the strategy based on changing financial needs and market conditions.

Empathy and Understanding

We understand the importance of financial security, especially in retirement. Your disciplined savings and investments reflect a prudent approach. Ensuring ongoing financial stability, managing inflation, and securing healthcare are critical steps.

Compliments on Your Financial Discipline

Your significant savings and investments are commendable. They reflect a strong financial discipline and foresight. Your concern for future financial stability indicates a responsible approach to managing wealth.

Detailed Strategy Analysis

Fixed Deposits: Fixed deposits offer safety but may not keep pace with inflation. Consider partial reallocation to higher-yield investments.

Tax-Free Bonds: Tax-free bonds provide steady income and are beneficial from a tax perspective. Maintain a portion in these bonds for stability.

Equity Investments: Equities can help counter inflation. Maintain a diversified equity portfolio for growth potential.

Rental Income: Rental income supplements your cash flow. Ensure the property remains well-maintained to attract tenants and avoid vacancies.

Healthcare Coverage

Urgency of Health Insurance: At 61, securing health insurance is crucial. It protects against high medical costs, which can deplete savings.

Senior Citizen Plans: Explore senior citizen-specific health insurance plans. These cater to older adults' needs and offer comprehensive coverage.

Coverage Comparison: Compare different health plans to choose one with broad coverage, affordable premiums, and good claim settlement ratios.

Investment Rebalancing

Gradual Shift: Gradually shift some funds from fixed deposits to balanced mutual funds or debt funds. This strategy manages risk while aiming for higher returns.

STP and SWP: Implement Systematic Transfer Plans (STP) to move funds to balanced or debt mutual funds. Use Systematic Withdrawal Plans (SWP) for regular income.

Portfolio Diversification: Maintain a diversified portfolio with a mix of equity, debt, and alternative investments to manage risk and returns.

Inflation-Proofing Your Portfolio

Equity Allocation: Maintain a portion of your portfolio in equities to combat inflation. Equities typically outperform inflation over the long term.

Real Return Focus: Focus on investments that offer real returns (returns after adjusting for inflation) to preserve purchasing power.

Regular Financial Reviews

Annual Reviews: Conduct annual financial reviews with your Certified Financial Planner to adjust the strategy based on market conditions and life changes.

Adjusting Allocations: Adjust your investment allocations as needed to ensure they align with your financial goals and risk tolerance.

Estate Planning and Nominations

Will and Trusts: Create a will and consider forming a trust for smooth asset distribution and management.

Updated Nominations: Ensure all investments and accounts have updated nominations to facilitate easy transfer to beneficiaries.


Your substantial savings and investments provide a strong financial foundation. By addressing inflation, securing healthcare, and diversifying your portfolio, you can ensure a comfortable retirement. Engaging with a Certified Financial Planner for personalized advice and periodic reviews will help maintain financial stability and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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.

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Ramalingam Kalirajan  |5092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jun 29, 2024Hindi
I am a retired Central Government officer. I have 2.75 crores FD’s, saving accounts 75 lakhs, 10 lakhs gold, SIP 25k per month. I get pension of 60k a month and my children give me 60k towards loan advanced to them. My monthly expenses are Rs. 1 to 1.25 lakhs. Am I comfortable?
Ans: Financial Assessment

Your current financial position is strong. Here’s a breakdown:

Fixed Deposits (FDs): Rs 2.75 crores

Savings Accounts: Rs 75 lakhs

Gold: Rs 10 lakhs

SIP: Rs 25,000 per month

Pension Income: Rs 60,000 per month

Children's Contribution: Rs 60,000 per month

Monthly Expenses: Rs 1 to 1.25 lakhs

Income and Expenses Analysis

Monthly Income:
Pension: Rs 60,000

Children’s Contribution: Rs 60,000

Total Monthly Income: Rs 1,20,000

Monthly Expenses:
Range: Rs 1,00,000 to Rs 1,25,000

Surplus and Comfort Level

Monthly Surplus:
Minimum Surplus: Rs 1,20,000 - Rs 1,25,000 = (-Rs 5,000)

Maximum Surplus: Rs 1,20,000 - Rs 1,00,000 = Rs 20,000

Investment Income:
Interest from FDs and savings can supplement your income.

Financial Security

Fixed Deposits:
Provide a stable income through interest. Ensure to reinvest the interest income.

Savings Accounts:
Keep a portion for liquidity and emergencies. Consider transferring excess funds to higher-yielding investments.

Acts as a hedge against inflation. No need for additional gold investments.

SIP and Future Planning

Systematic Investment Plan (SIP):
Continue SIP for growth. Consider diversifying into balanced or debt funds for stability.

Emergency Fund:
Maintain an emergency fund of 6-12 months’ expenses in liquid assets.

Final Insights

Your current financial situation is comfortable. Your monthly income meets your expenses, and you have substantial savings and investments. Continue SIP and review your portfolio annually. Ensure a portion of your savings is liquid for emergencies.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |5092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 18, 2024

Asked by Anonymous - Jul 06, 2024Hindi
Hello. I'm 42 and Never married before. I Live in New Delhi in my Mother Bungalow .I have my own Shop in New Delhi. Property Price for Bungalow 7 cr. Property Price for Shop 5 cr. I have accumulated Corpus Money in my Mother Bank account + Sister Bank account + My own Bank account = 2 cr. I get 18 lakhs Interest money every year from Bank for the Corpus Money I have accumulated in my family members names.I want to take retirement from my Shop and rent my Shop. I can get 10 lakhs every year from Rental income of my shop . Can I take retirement from my shop.Is 30 Lakhs every year sufficient.I want to get married and have peaceful life. I want to go for holiday 1 country every year for 15 days.I want to buy a new car every 5 years.I want money for family expenses
Ans: Assessment of Financial Situation

Your financial situation is strong. You have significant assets and a steady income stream. You own a bungalow worth Rs 7 crores and a shop worth Rs 5 crores. You have Rs 2 crores in bank accounts, generating Rs 18 lakhs per year in interest. Renting your shop will add another Rs 10 lakhs per year. This gives you a total annual income of Rs 28 lakhs.

Evaluating Income Needs

You plan to retire and rely on rental income and interest. You want Rs 30 lakhs per year for a comfortable life. This includes travel, buying a new car every 5 years, and family expenses. Your current income of Rs 28 lakhs is close to your target but slightly short.

Building an Emergency Fund

An emergency fund is crucial. You should have at least 6-12 months of expenses in a liquid fund. This fund will cover unexpected costs and provide peace of mind. For you, this should be around Rs 15-30 lakhs.

Investment Strategy

To ensure a stable income and growth, consider diversifying your investments. You can look into the following options:

Mutual Funds: Actively managed mutual funds can provide better returns than direct funds. They are managed by professionals and offer growth potential.

Debt Funds: These are less volatile than equity funds and can provide steady returns. They are suitable for a part of your portfolio.

Fixed Deposits: While not the highest in returns, they provide safety and liquidity.

Retirement Planning

Calculate Expenses: Estimate your monthly and annual expenses post-retirement. Include all regular and occasional costs.

Adjust Investments: If your expenses exceed Rs 28 lakhs, adjust your investments to fill the gap. You might need to increase your corpus or look for higher-yield investments.

Tax Efficiency

Tax Planning: Consult a tax advisor to optimize your tax liabilities. Invest in tax-efficient instruments to maximize your post-tax income.
Insurance Coverage

Health Insurance: Ensure you have adequate health insurance. Medical costs can be significant, especially as you age.

Life Insurance: If you plan to start a family, life insurance is crucial. It will provide financial security to your family in case of any unforeseen events.

Lifestyle and Leisure

Travel Budget: Allocate a specific budget for your annual holidays. Plan in advance to get the best deals and manage costs effectively.

Car Purchase: Budget for a new car every five years. Include maintenance and insurance costs in your annual expenses.

Monitoring and Review

Regular Review: Regularly review your financial plan. Adjust your investments and expenses as needed. Keep track of market changes and new investment opportunities.

Certified Financial Planner: Consult a Certified Financial Planner to ensure your plan remains on track. They can provide personalized advice and help you adjust your strategy as needed.

Final Insights

Your current financial situation is strong and supports your retirement plan. With proper planning and investment, you can achieve a comfortable and peaceful life. Ensure you have an emergency fund, diversify your investments, and review your plan regularly. This will help you maintain financial stability and meet your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |5092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 2024

Hi Sir, I am 46 years old, married, with a 12-year-old daughter. We live in Bangalore and own a loan-free flat in Mumbai valued at 90 lakhs. Currently, we are in the process of buying a flat in Bangalore for 90 lakhs, of which 50 lakhs has already been paid. Here is a summary of our financial assets: - EPF: 1 crore approx - Mutual Funds (via SIP): 90 lakhs (invested 55 lakhs) Blend of Large, Small, flexi and some in aggressive hybrid funds - Land: 18 lakhs - PPF: 25 lakhs - Gold and other assets: 30 lakhs I have a net monthly income of 3 lakhs, but my job is somewhat risky. My wife also works & earns 38,000 per month. Our average monthly expenses are between 80,000 and 90,000. Regarding our investments, we currently allocate 125,000 per month to SIPs, an increase from the previous Rs 70,000. Given our savings and investments, we have a total corpus of around 3 crores. I am fairly conservative in my financial approach and seek advice on whether this corpus is sufficient for maintaining a decent living standard, especially if I were to lose my job now.
Ans: You have done a commendable job of building a substantial financial portfolio. Let’s go through your financial situation in detail and strategize for maintaining a decent living standard, especially considering the risk associated with your job.

Current Financial Overview
EPF: Rs. 1 crore approximately.
Mutual Funds (via SIP): Rs. 90 lakhs (invested 55 lakhs) with a blend of large, small, flexi, and aggressive hybrid funds.
Land: Rs. 18 lakhs.
PPF: Rs. 25 lakhs.
Gold and other assets: Rs. 30 lakhs.
Loan-free Flat in Mumbai: Valued at Rs. 90 lakhs.
New Flat in Bangalore: Rs. 90 lakhs, Rs. 50 lakhs paid.
Net Monthly Income: Rs. 3 lakhs.
Wife’s Income: Rs. 38,000 per month.
Average Monthly Expenses: Between Rs. 80,000 and Rs. 90,000.
Monthly SIP Allocation: Rs. 1,25,000, increased from Rs. 70,000.
Financial Analysis and Recommendations
Evaluating Your Financial Safety Net
Your monthly income is substantial, but the job risk needs to be mitigated. Your total corpus is approximately Rs. 3 crores, a robust foundation. Let’s ensure this corpus can sustain your family’s needs if you lose your job.

Emergency Fund
An emergency fund is essential, especially given the job risk. You should have 6-12 months' worth of expenses in a liquid, accessible form. With expenses around Rs. 90,000 per month, an emergency fund of Rs. 10-12 lakhs is advisable. This fund can be in a high-yield savings account or a liquid mutual fund.

Optimizing Existing Investments
Your current investments are diversified, which is good. Let's see how to optimize them:

1. Mutual Funds:

Continue your SIPs in mutual funds. The blend of large, small, flexi, and hybrid funds is beneficial.

Avoid index funds due to their passive nature and potential underperformance in volatile markets. Actively managed funds can offer better returns through professional management.

Regular funds through a Certified Financial Planner can offer personalized guidance and active monitoring of your portfolio, unlike direct funds.

2. EPF and PPF:

EPF and PPF provide safety and assured returns, which is good for a conservative approach.

Continue contributing to PPF, considering its tax benefits and guaranteed returns.

3. Gold and Other Assets:

Gold can act as a hedge against inflation.

Consider reviewing other assets for their performance and potential.

4. Land and Real Estate:

Real estate is already a significant part of your portfolio.

Focus on liquid assets rather than further real estate investments.

Children's Education Fund
Your daughter’s education is a critical goal. Here’s how you can plan for it:

1. Estimate Future Costs:

Education costs are rising, so factor in inflation.

Plan for higher education expenses, both in India and abroad.

2. Create a Dedicated Education Fund:

Use mutual funds for long-term growth.

Equity mutual funds can be beneficial due to their high return potential over long periods.

Start a SIP dedicated to your daughter’s education.

3. Regular Review and Adjustment:

Monitor and adjust the fund based on performance and changing needs.

Rebalance your portfolio periodically to align with your goals.

Retirement Planning
You need to ensure your retirement is secure:

1. Assess Retirement Corpus:

Calculate the corpus needed to maintain your lifestyle post-retirement.

Consider inflation and increasing medical costs.

2. Continue SIPs:

SIPs in mutual funds can help build your retirement corpus.

Diversify within equity and hybrid funds for balanced growth.

3. EPF and PPF:

EPF is a significant part of your retirement corpus.

Continue contributing to PPF for assured returns and tax benefits.

4. Health Insurance:

Adequate health insurance is crucial to cover medical expenses.

Consider increasing your health cover as you age.

Risk Management
Given the job risk, managing risk is crucial:

1. Insurance:

Adequate term insurance is essential to cover liabilities and secure your family’s future.

Health insurance covers unexpected medical expenses.

2. Diversification:

Diversify investments to reduce risk.

Balance between equity, debt, and other asset classes.

3. Contingency Planning:

Prepare a plan in case of job loss.

An emergency fund, liquid assets, and a low expense ratio can help.

Tax Planning
Effective tax planning can enhance your savings:

1. Tax-Efficient Investments:

Use tax-saving mutual funds (ELSS) under Section 80C.

EPF, PPF, and insurance premiums offer tax benefits.

2. Long-Term Investments:

Long-term capital gains on equity mutual funds are tax-efficient.

Utilize tax exemptions and deductions to minimize tax liability.

Financial Goals and Milestones
Set clear financial goals and milestones:

1. Short-Term Goals:

Complete the payment for the Bangalore flat.

Maintain an emergency fund.

2. Medium-Term Goals:

Fund your daughter’s education.

Plan for any significant upcoming expenses.

3. Long-Term Goals:

Build a retirement corpus.

Ensure financial security and independence.

Power of Compounding
Leverage the power of compounding in your investments:

1. Start Early:

The earlier you invest, the more you benefit from compounding.
2. Regular Investments:

Consistent SIPs help in rupee cost averaging and compounding.
3. Long-Term Horizon:

Stay invested for the long term to maximize returns.
Final Insights
Your current financial status is strong, with a diversified portfolio. Continue with your disciplined approach to savings and investments. By optimizing your portfolio, planning for your daughter’s education, and securing your retirement, you can ensure a comfortable future. Regularly review and adjust your investments to stay aligned with your goals. Consulting a Certified Financial Planner can provide personalized guidance and help you make informed decisions. Keep up the good work, and stay focused on your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner


..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.


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