Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 08, 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 05, 2025Hindi

Good evening Reetika.I am 59 years old working in a private limited company.I will be retiring in July27.My retirement corpus will be 1 crore 20 lakhs at that time.My monthly exp Rs 80000 .How Rs 1.20 crores can be invested so that Rs 80000 can be generated monthly.

Ans: You are 59 now and will retire in July 2027. Having a retirement corpus of Rs 1.20 crores is a good base. You have also been clear about your expected monthly expense of Rs 80,000. That clarity itself is a strong step. But there are challenges here. Let me explain in detail.

» Current Expense and Corpus Balance
– Your corpus target is Rs 1.20 crores at retirement.
– Monthly expense is Rs 80,000, which is Rs 9.6 lakhs yearly.
– This is around 8% withdrawal rate from your corpus.
– Sustainable withdrawal rate in India is normally 4–5%.
– At 8%, corpus may not last till life expectancy.
– You must therefore design the corpus to grow even during retirement.

» Why Simple Fixed Income Will Not Work
– If you invest the whole amount in fixed deposits, yield may be 6–7%.
– This generates about Rs 7–8 lakhs yearly only.
– That falls short of your Rs 9.6 lakhs need.
– Also, FD interest is fully taxable as per slab.
– Inflation will further reduce real value of income.
– Relying only on FD or savings instruments will create risk of depletion.

» Role of Equity in Retirement
– Many feel equity is risky in retirement.
– But without equity, corpus fails to beat inflation.
– A part of your corpus must be in equity funds.
– Equity growth supports long-term sustainability.
– Active mutual funds can adapt and deliver better than index funds.
– Index funds simply follow the market and cannot adjust to risks.
– For retirement, active equity is a must for controlled growth.

» Debt Allocation and Stability
– Debt funds, hybrid funds, and short-term funds are useful for stability.
– These give regular income and low volatility.
– A balanced allocation between equity and debt protects both needs.
– Debt portion can cover 4–5 years of expenses in advance.
– This prevents panic selling in market corrections.
– Debt instruments are also more tax efficient than FDs if planned well.

» Cash Flow Structuring
– Create a Systematic Withdrawal Plan (SWP) from mutual funds.
– SWP allows fixed monthly withdrawal to meet your Rs 80,000 need.
– Withdrawals are partly capital, partly gains.
– This reduces tax impact compared to FD interest.
– Withdrawals also keep the rest of corpus invested and growing.
– This way, inflation impact is managed for long years.

» Taxation Considerations
– Equity mutual fund LTCG above Rs 1.25 lakh taxed at 12.5%.
– STCG on equity taxed at 20%.
– Debt mutual funds gains taxed as per slab.
– But through SWP, only small units are redeemed each month.
– This makes tax more efficient than FD interest.
– Certified Financial Planner can structure withdrawals for maximum tax efficiency.

» Insurance and Risk Protection
– Retirement is not only about income.
– Adequate health insurance is critical at this age.
– Without health cover, medical bills can eat into corpus.
– Term insurance may not be as relevant now.
– But medical cover and emergency buffer are essential.
– At least Rs 10–15 lakhs must be kept liquid for emergency.

» Inflation Impact Over Time
– Rs 80,000 today will not remain same value in future.
– In 10 years, at 6% inflation, need may rise to Rs 1.40 lakhs.
– In 20 years, need may touch Rs 2.5 lakhs.
– Hence, your Rs 1.20 crore corpus must continue to grow.
– Without equity growth, this inflation will break the plan.
– Careful asset mix is the only way to keep pace.

» LIC, ULIPs or Insurance-Cum-Investment Products
– If you hold any LIC or ULIP, they usually give low returns.
– Surrendering them and shifting to proper funds is better.
– Such products mix protection and investment poorly.
– Retirement corpus should not be trapped in these policies.

» Realistic Assessment
– With Rs 1.20 crores, generating Rs 80,000 per month is tight.
– It is possible only with balanced allocation and SWP discipline.
– But risk of shortfall exists if spending rises too fast.
– Lifestyle control is also a part of retirement planning.
– Corpus must be reviewed every year and adjusted if needed.

» Practical Roadmap for You
– Allocate corpus into three parts: equity funds, debt funds, liquid funds.
– Keep 3–4 years’ expense in debt and liquid funds.
– Keep rest in equity for long-term growth.
– Start SWP for Rs 80,000 per month.
– Review yearly with Certified Financial Planner for rebalancing.
– Keep medical insurance and emergency buffer separate.
– Avoid locking full corpus into fixed or annuity plans.
– Keep flexibility to adapt as expenses and inflation change.

» Finally
Your retirement plan is possible but needs very careful structuring. Rs 1.20 crores must be invested in a way that gives both income and growth. Pure fixed income is not enough. Equity exposure and SWP discipline are the key to sustaining income till age 85 and beyond. With balance and review, you can enjoy financial security in retirement without worrying about running out of money.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

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

Asked on - Sep 22, 2025 | Answered on Sep 22, 2025

Can you pls guide in which fund will I invest how much amt so that I can get rs 80000 monthly and also my capital does not erode

Ans: I understand your requirement. For scheme-specific recommendations and exact allocation guidance, I’d suggest you reach out directly to a Mutual Fund Distributor (MFD), a Certified Financial Planner (CFP), or connect with me through the website link provided in my signature below.

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.