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Ramalingam Kalirajan |10870 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 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 - Sep 09, 2025Hindi

My age is 30 no child married i have a corpus of 1lakh in sip and having monthly sip of 7000 please guide me for retirement planning

Ans: – You have started retirement planning at 30.
– This gives you a huge advantage.
– Compounding works best with time.
– Regular SIPs show strong financial discipline.
– Your early focus builds a secure future.

» Current investment position
– You have Rs.1 lakh corpus already invested.
– Monthly SIP of Rs.7,000 is running.
– This is a good beginning but small for retirement.
– Retirement needs a much larger fund later.
– Step-up in SIP is essential over time.

» Time horizon assessment
– You have around 28–30 years for retirement.
– This long period allows wealth growth.
– Equity exposure is important for this horizon.
– Volatility in short term will not matter.
– Long term focus ensures better results.

» Why equity should be the core
– Equity is best for wealth creation over decades.
– It beats inflation by a wide margin.
– FDs and PPF alone cannot match retirement needs.
– Hybrid funds add stability but lower growth.
– Equity-hybrid mix works well for long-term investors.

» Problems with index funds
– Index funds copy the benchmark passively.
– They cannot avoid weak companies in index.
– They fall completely during market downturns.
– No flexibility to manage risk.
– Active funds provide professional management.
– Active approach gives better safety and returns.

» Regular vs direct funds
– Direct funds look cheaper due to lower expense ratio.
– But they lack expert support and guidance.
– Investors may choose wrong funds or exit wrongly.
– Regular funds via Certified Financial Planner avoid such errors.
– Ongoing advice improves long-term outcome.
– Guidance matters more than small cost savings.

» Increasing SIP gradually
– Rs.7,000 monthly is good for start.
– But as income grows, SIP should increase.
– Even 10–15% yearly step-up makes big impact.
– Higher SIP ensures larger retirement corpus.
– Early increases are more powerful than late ones.
– Make SIP rise along with salary hikes.

» Retirement corpus requirement
– Retirement will need large funds due to inflation.
– Expenses will double every 10–12 years.
– Health costs rise faster than normal inflation.
– Without large equity portion, corpus may fall short.
– Goal must be a fund that supports 25–30 years post-retirement.
– Planning early makes this achievable.

» Role of debt and hybrid funds
– Debt funds offer stability but limited growth.
– Use them only for short-term needs.
– Hybrid funds balance equity and debt for medium-term.
– For retirement horizon, equity must dominate.
– Add hybrids only closer to retirement.
– This reduces risk before withdrawals begin.

» Tax efficiency in retirement planning
– Long-term equity gains above Rs.1.25 lakh taxed at 12.5%.
– Short-term gains taxed at 20%.
– Debt fund gains taxed as per slab.
– Equity-hybrid mix gives more tax efficiency.
– SWP from equity-hybrid funds is tax efficient in retirement.
– FD income will always be fully taxable.

» Insurance protection now
– Retirement planning must be protected with insurance.
– Life insurance is needed if spouse depends on you.
– Term insurance is best and cost effective.
– Health insurance must also be in place.
– This prevents withdrawals from retirement corpus for emergencies.
– Protection is foundation for long-term planning.

» Behavioural discipline
– Avoid stopping SIPs during market falls.
– Volatility is temporary, compounding is permanent.
– Regular review with Certified Financial Planner is vital.
– Avoid chasing quick high returns.
– Stick to a long-term asset allocation.
– Patience and discipline create wealth.

» Legacy and long-term vision
– Retirement plan must also include family security.
– Nominations should be updated in all investments.
– Later, estate planning through Will adds clarity.
– Think beyond your life, ensure spouse’s security.
– Long-term planning is not only about wealth.
– It is also about peace of mind.

» Finally
– You have started early, which is a huge strength.
– Present SIP is good but needs gradual increase.
– Equity allocation must be higher for long horizon.
– Avoid index and direct funds, choose active funds with CFP support.
– Protect plan with term and health insurance.
– Stay disciplined and review regularly.
– This path ensures a secure, inflation-proof retirement.
– You are on the right track, just keep stepping up.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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