I am 47 yr old IT Professional. I have diversified my porfolio across MF - 60L , Direct Equity - 15 L, Gold (SGB - 20L, Physical - 50L) , Real Estate - 2 CR(Flat), Independent home (2.5CR) which fetching 30K Monthly Rental. EPF - 90L, NPS - 20 L, FD - 90L, Sukanya Samridhi for 2 Daughters - 14L Each till date. I am contributing upto 1.5 L monthly into NPS, Equity MF. My MF is diversified into Flexi, mid and small cap fund (Total 8 Funds in portfolio). I am looking to build retirement corpus of 8 Cr based on my current monthly expenses.
Ans: You have a well-diversified portfolio. It includes real estate, mutual funds, equity, gold, EPF, NPS, and FDs. This balance reflects thoughtful planning.
Your rental income of Rs. 30,000 adds stability. Contributions to Sukanya Samriddhi Yojana secure your daughters’ futures.
Your focus on NPS and diversified mutual funds is commendable. These build long-term wealth efficiently.
You aim for Rs. 8 crore as a retirement corpus. With careful adjustments, this is achievable.
Key Areas to Strengthen
1. Portfolio Consolidation
Your portfolio has eight mutual funds. This may lead to overlap and inefficiency.
Review these funds with a Certified Financial Planner. Ensure no duplication across asset categories.
Consider consolidating into 3–5 actively managed funds. This maintains diversification while improving focus.
2. Asset Allocation
Your portfolio is heavy in real estate and gold. These are illiquid investments.
Aim to rebalance toward financial assets like equity mutual funds. These provide liquidity and growth potential.
A Certified Financial Planner can assist in optimal asset reallocation.
3. Emergency Fund
Ensure liquid funds for 6–12 months of expenses.
This fund should not overlap with FDs or long-term investments.
Maintain this emergency fund in a liquid fund or savings account.
4. Mutual Fund Taxation
When selling mutual funds, consider capital gains tax:
Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.
Short-term gains are taxed at 20%.
Debt mutual funds are taxed as per your income slab.
Plan withdrawals with this tax implication in mind.
Actionable Strategies
1. Increase Equity Exposure
Your diversified mutual funds are strong.
Consider increasing equity mutual fund SIPs for long-term wealth.
Focus on flexi-cap, large-cap, and mid-cap funds for balanced growth.
Small-cap funds are volatile; limit exposure to 10–15%.
2. Optimise NPS Contributions
NPS is excellent for retirement. Its tax benefits under Sections 80C and 80CCD are helpful.
Invest up to Rs. 50,000 annually for additional tax savings.
However, review NPS as it locks in funds till retirement. Maintain flexibility elsewhere.
3. Rationalise FD Holdings
FDs are safe but offer low post-tax returns.
Shift a portion to debt funds for better returns and tax efficiency.
Debt funds balance portfolio risk without sacrificing liquidity.
4. Review Sukanya Samriddhi Yojana
Your contributions here are thoughtful. They offer assured returns for your daughters’ education.
Continue until the full maturity period. This ensures maximum benefit.
Retirement Planning
1. Expense Mapping
List all post-retirement expenses. Account for inflation at 6–7% annually.
Break these into essentials (medical, household) and discretionary (travel, hobbies).
Use this as a guide to calculate your future income requirement.
2. Corpus Building
Your current investments, including EPF and NPS, are solid.
Increase your mutual fund SIPs marginally to stay on track for Rs. 8 crore.
Continue Rs. 1.5 lakh monthly contributions strategically across financial instruments.
3. Health Coverage
Health insurance is critical post-retirement.
Review coverage for yourself and family. Ensure at least Rs. 50 lakh in coverage.
Consider adding a top-up plan for unforeseen medical costs.
Gold Portfolio Insights
Your gold portfolio is significant at Rs. 70 lakh.
SGBs are excellent for regular interest income and long-term growth.
However, physical gold is less efficient. Selling may involve lower liquidity and higher costs.
Convert a portion of physical gold into SGBs or financial assets.
Final Insights
You have made strong financial decisions so far.
Focus on reducing portfolio complexity and enhancing liquidity.
Rebalance your portfolio with a Certified Financial Planner. This ensures alignment with goals.
Stick to disciplined contributions toward NPS and mutual funds. This will help you reach Rs. 8 crore comfortably.
Ensure diversification without overextending into illiquid assets.
With this strategy, your retirement goals are well within reach.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment