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Ramalingam

Ramalingam Kalirajan  |8092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 18, 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
Rajiv Question by Rajiv on Nov 19, 2023Hindi
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Dear Sir,my current expenses are Rs 2.6 lacs per month,how much money do I need to retire considering life expectancy till 100 years ?

Ans: To retire with expenses of Rs 2.6 lacs/month till age 100, you'll need approximately 7.8 crores. This calculation assumes inflation, investment returns, and doesn't account for any other income sources or unexpected expenses. Regularly review and adjust your retirement corpus based on changing financial conditions.
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

Ramalingam Kalirajan  |8092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 07, 2024

Asked by Anonymous - Apr 29, 2024Hindi
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Iam 45 year old ,i want to retire know my mothly expenses is 55ooo thousand per month,how much money required to survive till the age of 80
Ans: It's great that you're thinking about your retirement and planning ahead. Here are some steps to help you determine how much money you'll need to retire comfortably:

Calculate Your Retirement Expenses: Start by listing down all your current monthly expenses, including essentials like housing, utilities, groceries, healthcare, and discretionary spending. Add an inflation buffer to estimate future expenses.
Determine Your Retirement Age: Decide at what age you want to retire. Since you're 45 now, consider how many years you have until retirement.
Estimate Your Retirement Income: Assess all potential sources of retirement income, such as pensions, annuities, Social Security, and investment income.
Calculate the Gap: Subtract your estimated retirement income from your projected retirement expenses to determine how much additional income you'll need from savings and investments.
Determine Required Corpus: Once you have the annual shortfall in retirement income, multiply it by the number of years you expect to be retired. This will give you an estimate of the total corpus required to cover your retirement expenses.
Adjust for Inflation: Remember to account for inflation when calculating your retirement corpus. Inflation can erode the purchasing power of your savings over time, so it's crucial to plan for it.
Consult a Financial Planner: Consider seeking guidance from a Certified Financial Planner to help you create a personalized retirement plan. A professional can provide valuable insights and recommendations tailored to your financial situation and goals.
By following these steps and consulting with a financial planner, you can determine how much money you'll need to retire comfortably and develop a strategy to achieve your retirement goals. Remember, it's never too late to start planning for retirement, and taking proactive steps now can help secure your financial future.

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Ramalingam

Ramalingam Kalirajan  |8092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 21, 2024Hindi
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Hi sunil sir iam 45 year old i want to retire next year my monthly expense 50000 per month, how much money need to sustain at the age of 80
Ans: Understanding Your Retirement Needs
Sunil sir, planning for retirement is a critical step. I understand your need for a comfortable and secure retirement. Retiring next year at age 46 and sustaining until age 80 requires careful financial planning.

Estimating Future Expenses
Your current monthly expense is ?50,000. This amount will likely increase due to inflation. It's important to account for this in your retirement plan. Inflation can erode the value of money over time. For instance, what costs ?50,000 today will cost much more in the future.

Creating a Retirement Corpus
To maintain your lifestyle, you need to accumulate a substantial retirement corpus. This corpus should generate enough returns to cover your monthly expenses adjusted for inflation. The goal is to ensure you do not outlive your savings.

Investment Strategy
A well-diversified investment portfolio is essential. Diversification reduces risk and enhances returns. Focus on a mix of equity and debt funds. Equity funds provide growth, while debt funds offer stability.

Benefits of Actively Managed Funds
Actively managed funds can outperform the market with the expertise of fund managers. They adjust portfolios based on market conditions. This dynamic management can yield better returns than index funds.

Professional Guidance
A Certified Financial Planner can help tailor an investment strategy to meet your retirement goals. They offer personalized advice considering your financial situation and risk tolerance. Their expertise ensures a well-structured retirement plan.

Importance of Regular Review
Regularly reviewing your retirement plan is crucial. Financial markets and personal circumstances change. Annual reviews with your planner can help adjust your investments to stay on track.

Emergency Fund
Maintain an emergency fund to cover unexpected expenses. This fund should be easily accessible and separate from your retirement corpus. It ensures you don't have to dip into your retirement savings for emergencies.

Health Insurance
Adequate health insurance is vital. Medical expenses can be significant in retirement. A comprehensive health insurance plan protects your savings from unforeseen medical costs.

Managing Withdrawals
Plan your withdrawals carefully to avoid depleting your corpus too soon. A systematic withdrawal plan helps manage your finances efficiently. It ensures you have a steady income stream throughout retirement.

Tax Planning
Effective tax planning can enhance your retirement savings. Utilize tax-efficient investment options. A Certified Financial Planner can help optimize your investments to minimize tax liabilities.

Appreciating the Journey
Your foresight in planning for retirement is commendable. Taking steps now ensures a secure and comfortable future. It's important to stay informed and proactive about your financial health.

Conclusion
Sunil sir, your dedication to securing a stable retirement is inspiring. With a comprehensive plan and professional guidance, you can achieve your retirement goals. Remember, the key is to start early and stay disciplined.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Latest Questions
Janak

Janak Patel  |20 Answers  |Ask -

MF, PF Expert - Answered on Mar 11, 2025

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Hello Sir, I am 42 years old IT professional. I have one son of 6 years and in class 1. My wife also works and our combined MF portfolio is of 1.1 cr. We both invest 90k per month in various mutual funds. I have purchased one flat which has 60 lacs of home loan and 58000 emi. I have sold my current flat in 80 lacs. I am in confusion of what to do with this money. Should I part close my home loan, should i invest it in mutual funds or should i go for PMS. I am in no hurry to pre close home loan as I can close the loan in next 6-7 years from our salary and my PPF. My goal is to maximize my returns to create wealth as I want to retire by 50. I have monthly expenses of 75K including my child fees for now. Please suggest. Thank you.
Ans: Hi Shaks,

Your query will resonate with many working professionals.

First and foremost, please check/calculate if you have capital gains arising out of the sale of your current flat. This is important for tax implication and will also help make your decision for utilizing the funds.

Lets assume you have some capital gains from this sale, then you can again have to confirm if the capital gains can be utilized without paying tax on it - this is possible if you have purchased the new flat within the last 1 year. If so, then you can utilize/adjust the capital gains towards payments made for the new flat and save tax on it. If you have purchased the new flat earlier than the last 1 year, then you have 2 options - pay tax on the capital gains and then use the funds as you wish OR invest the capital gains amount in NHAI bonds (locked) for the next 5 years (pay tax only on the interest earned).

Once you have sorted the above, you will know what is the amount in hand to make your decision, so lets dive into it.
You have a loan of 60 Lacs and you can manage the EMI from your salaries. Over the next 6-7 years, your salary will also see an increment of approx 7-8% annually, so I suggest you utilize this excess amount each year to prepay/topup your EMI payments. This will help reduce the loan burden over time. At the time of retirement, your loan outstanding can be paid with available options at that time.
You mentioned PPF as an option - I would suggest you do not utilize PPF amount towards this loan closure. The reason is PPF is a completely tax exempt asset and can be utilized well towards retirement income. Of course depends on how much you have accumulated in PPF.

So lets now consider paying the loan amount with the sale proceeds of the current flat. You have a loan today (assuming interest rate applicable is 8-8.5%), which you can manage and you are keen to continue it till retirement, so also recommend you do so. Keep the sale proceed amount available for investment and wealth creation as there are opportunities that can generate returns at a same rate (conservative options) and higher returns (with a slightly higher risk associated).

As you do not have any major liability which is outstanding or cannot be managed, and also you are investing 90k per month in Mutual funds, you can consider wealth creation options for the sale amount available.
PMS is an option but I feel its risks will out weigh the returns in the time frame you have, unless you have a known and trust-worthy option you want to consider.
As you are looking to retire early, at age 50, you should target to create a corpus that will sustain your retirement life (consider at least 30 years post retirement) and your child's education requirements.
Hence my recommendation would be to invest in Mutual Funds and continue with your PPF until retirement. A well constructed portfolio to create a retirement corpus and your child's education requirements would be required.

You can consult a Certified Financial Planner to help you with this plan. They can guide you with your Investments and Retirement planning and provide options to consider and provide advise on risk management (Insurance requirements).

Thanks & Regards
Janak Patel
Certified Financial Planner.

...Read more

Dr Dipankar

Dr Dipankar Dutta  |954 Answers  |Ask -

Tech Careers and Skill Development Expert - Answered on Mar 11, 2025

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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