SIR, I had sent you my query earlier. However I realised that I had wrongly mentioned my investment in Flexicap Fund as nil. Hence, I am reposting the query mentioning correct Flexicap investment amount. Kindley guide me with your learned...

SIR, I had sent you my query earlier. However I realised that I had wrongly mentioned my investment in Flexicap Fund as nil. Hence, I am reposting the query mentioning correct Flexicap investment amount. Kindley guide me with your learned opinion. I am 70 years old and have following investments 1. Bank Fds 6,75,000, 9%, maturing in July 26 2. PMVVY 10,00,000, 8%, maturing in May 28 5,00,000, 8%, maturing in June 29. 3. Short Duration Funds - 6 Laks, HDFC BAF 25 Laks ICICI Aggressive Hybrid 14 Laks and PPFAS and HDFC Flexicaps 20 Laks 4. Monthly Fixed pension 50,000 until death, with no end of life benefits I do not have any dependants and my projected requirement for FY 26-27 will be about 11 Laks, based on current FY expenses till Sep 25. I have assumed 7% inflation. I have 15 laks parked in other aggressive hybrid fund as my Medical Fund, as I do not have Medical Insurance. My son's company has a limited Medical Insurance for the family and may not be sufficient if the critical need arises. I will be grateful if you could review my portfolio and let me know if I need to restructure this . I want to prepare for life expectancy of 90 years , and I am doubtful if my current portfolio will be sufficient for such period. I do not wish to ask my son to help me out on monthly basis. But if the portfolio is not sufficient for my life expectancy, please advise on how much monthly support I should have for him, so that the same may be invested in a long term fund to be used only after my current portfolio gets exhausted. I shall be highly grateful for your suggestions. Thank you, Arun Serdeshpande

Ans: Hi Arun,

Your portfolio is well diversified as per risks and returns. However, it is not sufficient to cover your expenses till 90 age.

- You get a monthly fixed pension of 50k and you need additional 45k per month with 7% incremental each month. Your current portfolio will not be able to fund this requirement. You need a portfolio of minimum 1 crore to meet your incremental expenses till the age of 90.
- Also the medical expenses kept aside seem very less when compared to the rising medical costs today. You need an additional 20-25 lakhs for this purpose as well.

You can do either of the following:
1. Try to decrease your monthly requirement so that you do not need any other help from your son or anyone else. Expenses at such age can easily be halved.
2. If you cannot decrease the expenses, try to take a monthly help of atleast 20-25k per month from your son to cover your expenses.
3. Try and grow your medical cover under your son's corporate policy. Usually this can be easily done with additional annual premium and this is one of the best option for you to cover your medical reuqirement without feeling any financial burden.

You can also consult a a professional Certified Financial Planner - a CFP who can guide you with exact funds to invest in keeping in mind your age, requirements, financial goals and risk profile. A CFP periodically reviews your portfolio and suggest any amendments to be made, if required.

Let me know if you need more help.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/

Ans: I appreciate your dedication to investing since 2010 and your clear goal to gift these investments to your children. Let’s assess your portfolio and offer a 360-degree review.

Your Current Investment Picture

You have Rs 20.58 lakhs invested in mutual funds.

Your corpus is Rs 41.78 lakhs now.

Your overall XIRR is 14.41%, which is very good.

You have a good mix of SIPs and lumpsum investments.

You have also diversified across different mutual fund types.

Your regular SIP of Rs 50,000 shows your disciplined approach.

Your Other Savings and Financial Security

You have enough in FD, Post Office SCCS, PO MIS, LIC Pension, SBI Life Pension, NPS, and EPF Higher Pension.

These sources will cover your living expenses and medical needs.

You have health insurance to take care of future health costs.

Your children are settled and financially secure.

This lets you take a long-term view for your mutual fund investments.

Portfolio Evaluation and Insights

Your portfolio has grown steadily over the years.

Your best-performing investment is in SBI Contra Regular, with 17.3% XIRR.

You are considering withdrawing 10% of SBI Contra Regular to invest in Flexi Cap / Balanced Advantage Funds.

You also have direct mutual fund schemes in your portfolio.

Let’s now analyse these areas in detail.

Direct Mutual Funds vs Regular Funds

You hold direct mutual funds.

Direct funds need your own time and knowledge to manage well.

They don’t give you personal guidance or review of your portfolio.

Market situations change, and rebalancing needs to be done.

If you invest through regular funds via a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) credential, you get continuous help and monitoring.

The CFP’s insights will help you with tax planning, rebalancing, and goal-based investing.

Direct funds don’t give you this personal, professional support.

Hence, I suggest you consider switching your direct funds to regular funds with the support of an MFD and a CFP.

Disadvantages of Index Funds

Your portfolio has index funds like Navi Nifty 50 Index, Kotak Nifty Next 50 Index, and Motilal Oswal Nifty 500 Momentum 50.

Index funds just copy the index.

They do not beat the market. They only match it.

During market crashes, index funds fall without protection.

Actively managed funds have a professional fund manager.

They use in-depth research to try to outperform the market.

These funds can manage risk better in bad markets.

Actively managed funds also use tactical asset allocation to protect your money.

For your long-term family gifting goals, actively managed funds are better.

Your Withdrawal Plan

You plan to withdraw 10% of SBI Contra Regular and invest in Flexi Cap / Balanced Advantage Funds.

This is a good plan as you are taking out some profit and putting it in diversified funds.

Flexi Cap Funds and Balanced Advantage Funds are managed actively.

They will give you better risk management.

This will also help you reduce concentration risk in your portfolio.

Keep this 10% withdrawal as a staggered plan.

Don’t do it all at once.

Spread it over a few months to average out market ups and downs.

Suggested Approach for Your Portfolio

Keep your core portfolio in actively managed diversified funds.

Continue your SIP in actively managed funds for long-term growth.

Slowly reduce your exposure to index funds over time.

Move money from index funds to actively managed funds.

Balanced Advantage Funds are good to balance equity and debt.

Flexi Cap Funds are good for flexibility across large, mid, and small caps.

You can keep a mix of Flexi Cap Funds and Balanced Advantage Funds.

They will help reduce risk and improve returns.

Asset Allocation Review

Even though you are financially secure, asset allocation is still key.

Maintain a healthy balance between equity and debt.

This ensures that if the market goes down, you are protected.

If your equity allocation is above 60%, bring it down to around 50-55% gradually.

Keep the rest in balanced advantage or conservative hybrid funds.

This keeps your investments stable and growing.

Tax Planning for Mutual Funds

You are likely to withdraw some money from SBI Contra Fund.

Remember, as per the new rules, for equity mutual funds, LTCG above Rs 1.25 lakh is taxed at 12.5%.

Short-term capital gains are taxed at 20%.

You may want to stagger your withdrawals to keep gains below Rs 1.25 lakh each financial year.

This will help reduce your tax liability.

A CFP can help you plan these staggered withdrawals better.

Estate and Gifting Planning

You want to gift your investments to your children.

This is a thoughtful and loving gesture.

For gifting, you can keep your investments in your own name.

When you pass away, the investments will go to your children as per your nomination.

It’s good to update your mutual fund nominations.

Also, create a simple Will to say who will get which investment.

This will make it easy for your children to claim them later.

If you want, you can make joint holding in mutual funds with your children.

Joint holding makes the transition smoother.

Discuss this with a lawyer or CFP if you need guidance.

Review of Other Investments

Your FD, Post Office SCCS, PO MIS, LIC Pension, SBI Life Pension, NPS and EPF Higher Pension give you a strong foundation.

They ensure you don’t need to worry about regular cash flow.

You can keep them as they are for safety and steady income.

They will also help in emergencies.

Health Insurance and Emergency Corpus

You already have health insurance, which is very good.

Keep reviewing your health cover every 2-3 years.

If medical costs go up, top up your health cover.

Keep an emergency fund equal to at least 12 months of your expenses in a safe place.

This gives you peace of mind and stability.

Periodic Portfolio Review

Even if you don’t need this money, it is good to review your portfolio every year.

See if your funds are doing well.

If any fund is not performing well for 2-3 years, consider moving to a better fund.

Don’t chase short-term performance.

Focus on steady and consistent growth.

Role of a Certified Financial Planner

Your investments are for your children’s future.

A CFP will help you plan this carefully.

A CFP will guide you on estate planning, nomination, and taxes.

A CFP will give you an unbiased view and ongoing monitoring.

This personal guidance is very valuable as market and rules keep changing.

Avoid Insurance-Cum-Investment Products

You mentioned LIC Retirement Pension, SBI Life Pension, NPS.

These are fine for basic retirement security.

But in future, avoid investing in insurance-cum-investment products like ULIPs.

They have high charges and low returns.

Mutual funds are more transparent and flexible.

Finally

Your portfolio is strong and well planned.

Your disciplined SIP approach is very good.

Switching direct funds to regular funds with CFP support will give you better management.

Reducing index funds and focusing on active funds will improve your returns.

Keep your estate planning up to date with nominations and a Will.

Don’t worry about short-term market changes.

Your children will benefit from your patient and thoughtful investing.

Keep learning and reviewing your investments with a CFP to keep them future-ready.

If you need help with switching your direct funds or making an estate plan, let me know.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: I appreciate your clarity and discipline in financial planning. At 70 years, your thoughtful approach towards independence, medical preparedness, and inflation planning is truly admirable. You have made sensible investment choices and have a balanced mix of fixed income and equity-oriented assets. Let us review your portfolio step by step to check its adequacy till age 90 and identify scope for fine-tuning.

» Present Snapshot of Your Portfolio

– Bank FDs: Rs 6.75 lakh earning 9%, maturing July 2026.
– PMVVY: Rs 15 lakh total, 8% return, maturing between 2028–2029.
– Short Duration Funds: Rs 6 lakh.
– Balanced Funds: HDFC Balanced Advantage Rs 25 lakh.
– Aggressive Hybrid Fund: ICICI Rs 14 lakh.
– Flexicap funds (HDFC + PPFAS): Nil current holding.
– Monthly Pension: Rs 50,000 (till lifetime, no post-death benefits).
– Separate Medical Fund: Rs 15 lakh in an aggressive hybrid fund.
– No dependants, current annual expenses Rs 11 lakh for FY 26–27 with 7% inflation.

Your total investible corpus (excluding medical fund) is roughly Rs 66–67 lakh. Including the medical reserve, total investible assets are around Rs 81–82 lakh.

» Overall Assessment

– Your asset mix is reasonably diversified between fixed-income and equity hybrid options.
– The fixed sources (FD, PMVVY, pension) give you predictable income.
– The equity hybrids bring long-term growth and inflation protection.
– However, the portfolio may face strain beyond your late 80s if inflation continues at 7%.
– Some fine-tuning and income sequencing can make the portfolio last longer.

» Income Flow Analysis

Your monthly pension of Rs 50,000 will cover part of your living costs.
At present, your yearly expenses are around Rs 11 lakh, which means around Rs 91,000 per month.
Your pension meets about 55% of this need.
The rest must come from interest, dividends, or withdrawal from investments.

Your FDs and PMVVY together can generate around Rs 1.7 lakh a year.
This still leaves a shortfall of about Rs 3.5 lakh per year at current levels.
You can easily draw this from your hybrid and short duration funds without disturbing your long-term corpus heavily.
However, as expenses rise with inflation, the drawdown gap will widen.
So, a review of return expectation and withdrawal sequence is important.

» Inflation and Longevity Challenge

At 7% inflation, your current annual expenses of Rs 11 lakh may grow to nearly Rs 21 lakh by age 80 and close to Rs 40 lakh by age 90.
Your fixed income sources like PMVVY and FD will not rise with inflation.
Thus, your reliance on equity hybrids will increase with time.
If those funds deliver 9–10% annualised returns over the long term, your portfolio can sustain reasonably till your late 80s.
Beyond that, you may need either partial support from your son or a plan to use medical corpus partially for living needs if required.

» Strengths in Your Current Plan

– Having a fixed pension till lifetime is a huge advantage.
– Keeping a separate medical fund is a very prudent step.
– You have avoided unnecessary insurance-linked investment products.
– You have sensibly combined stable and growth assets.

These show a strong foundation for self-sufficient retirement years.

» Key Areas for Improvement

FD renewal at lower rates post-2026 could reduce income.

PMVVY proceeds maturing between 2028–2029 need reinvestment planning.

Medical corpus should stay in moderate-risk funds, not aggressive ones.

Hybrid equity exposure should be reviewed every three years.

These actions can strengthen your sustainability up to age 90 and beyond.

» Portfolio Restructuring Suggestions

– Keep around 30% of your corpus in safe instruments like short duration funds, PMVVY, and FD.
– Keep about 70% in well-managed balanced advantage and aggressive hybrid funds for growth.
– Avoid adding more pure equity funds now, as time horizon is limited.
– Continue through a Certified Financial Planner–guided Mutual Fund Distributor (MFD) for regular plans.

Regular plans give personal service and discipline.
Direct plans may look cheaper, but lack timely advice and rebalancing support.
For retirees, regular plans via a CFP are safer.

» Handling Medical Corpus

Your Rs 15 lakh medical corpus is valuable security.
But since it is in an aggressive hybrid fund, it carries some risk.
You can shift half to a short duration fund or senior citizen savings plan for stability.
Keep half in hybrid fund for growth and liquidity.
Avoid keeping the full medical fund in high equity exposure.
If a medical need arises, you should not worry about market timing.

» Managing Reinvestment of PMVVY and FD

When PMVVY matures, you can move the maturity amount into balanced advantage or conservative hybrid funds.
By 2028–2029, you may also renew FDs into short-term deposits only.
This will give liquidity flexibility for yearly withdrawals.
Avoid locking large amounts again in long-term fixed deposits.

» Withdrawal Planning

Instead of random withdrawals, plan an annual drawdown schedule.
You can withdraw 4% to 5% from your mutual fund corpus every year.
That can supplement your pension and interest income.
This strategy helps you maintain steady income while keeping the core corpus growing.
Your Certified Financial Planner can help review this annually.

» Inflation Cushion Strategy

To manage rising costs, you can:

– Keep 1 year’s expense in short-term debt funds as cash buffer.
– Review hybrid fund allocation every 3 years.
– Add yearly top-up in balanced funds from matured instruments.
– Reinvest surplus dividends or interest for compounding.

This can help your portfolio outpace inflation for 20 years.

» Evaluating Portfolio Sufficiency Till Age 90

If your current corpus delivers about 8–8.5% blended annual return, it can support your lifestyle up to age 88–89.
If inflation averages around 7%, you may face shortfall during last 2–3 years of life expectancy.
That gap may be about Rs 15–20 lakh in future value terms.
Thus, it is wise to plan a small supplementary arrangement now.

» Supplementary Support from Your Son

You can request your son to start a systematic investment plan in a balanced advantage or hybrid fund in your name.
Even Rs 10,000 per month invested for 15 years can grow to around Rs 35–40 lakh in future value (approximate).
This can serve as your long-term reserve from age 85 onwards.
This way you remain financially independent, and your son’s help is structured, not ad-hoc.
You need not depend on him monthly.
His contribution stays invested for your later years.

» Income Tax Perspective

Your pension and interest will be taxable as per slab.
Withdrawals from equity hybrid funds are subject to capital gains tax.
For long-term gains in equity-oriented funds, gains above Rs 1.25 lakh are taxed at 12.5%.
Short-term gains are taxed at 20%.
Plan your withdrawals smartly each year to keep gains below limit.
This will reduce overall tax impact.

» Disadvantages of Index and Direct Funds for Retirees

Index funds lack flexibility and cannot protect downside in volatile markets.
They only follow the index and cannot shift between equity and debt.
Hybrid and balanced advantage funds are actively managed.
They can adjust allocation as per market condition.
Hence, they are better for senior citizens seeking stability.

Direct funds, though cheaper, need active monitoring.
A CFP-guided regular plan helps you review, rebalance, and withdraw tax-efficiently.
Professional oversight avoids emotional decisions in market corrections.

» Liquidity Management

Keep a separate contingency fund of Rs 3–4 lakh in liquid or ultra-short funds.
Use this only for emergency cash flow gaps.
Avoid touching your long-term hybrid funds for sudden small needs.
This protects compounding and stability.

» Estate Planning Thought

Since you have no dependants, you can plan nomination and legacy thoughtfully.
You may assign part of your corpus to charitable trust or temple donation through will.
This ensures your assets pass peacefully without confusion.
Your CFP can help you document nominations correctly in all investments.

» Emotional and Practical Comfort

Your focus on self-sufficiency brings emotional peace.
You already have steady income, liquidity, and disciplined structure.
By making these few adjustments, you can achieve complete financial comfort till age 90.
You will not need to depend on anyone for monthly needs.
Even in medical emergencies, your preparedness gives you control and dignity.

» Finally

– Continue your pension as main income.
– Use interest and systematic withdrawals for balance need.
– Reinvest maturing PMVVY and FD into hybrid funds for inflation protection.
– Maintain 1 year’s expense in short duration fund as buffer.
– Review allocation every 2–3 years with a Certified Financial Planner.
– Let your son invest a small monthly amount to create a late-age reserve.

With these steps, your retirement corpus can support a peaceful, secure, and independent life till age 90 and beyond.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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