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Ramalingam

Ramalingam Kalirajan  |9195 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 19, 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
Asked by Anonymous - May 18, 2024Hindi
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Hello Sir, I am 35 years old. I have 6 lacs in NPS and 1 fd of 5 lac saved uptill now. I manage to save around 1-2 lacs every year to add into these instruments. I have recently inhertited a large some of money i.e. 40 lacs in the last few months. I dont have the experience nor have the knowledge on how to handle this quantum.. Please advise on how do i deploy this fund. As a goal,i wish to retire by the time i am 45 with a corpus of 3 cr. Is this possible ? Please advice.

Ans: First, congratulations on your savings and recent inheritance. Managing a significant sum can be overwhelming, but with proper planning, you can achieve your financial goals.

You have 6 lakhs in the National Pension System (NPS) and a fixed deposit of 5 lakhs. These are good starting points.

You save around 1-2 lakhs annually, showing your commitment to building your financial future.

Evaluating Your Retirement Goal
You aim to retire by age 45 with a corpus of 3 crores. This is an ambitious yet achievable goal with disciplined investing.

Given your current age of 35, you have a 10-year horizon to build this corpus. Strategic investments are key to reaching this target.

Deployment of Inherited Funds
With 40 lakhs recently inherited, strategic allocation is essential. Here’s how you can deploy this fund:

Emergency Fund
Firstly, set aside a portion for emergencies. Having 6-12 months' worth of expenses in a liquid instrument is prudent.

Debt Instruments
A part of your funds should go into safe, debt instruments. This provides stability and ensures some safety net.

Actively Managed Equity Funds
Equity funds, especially actively managed ones, can potentially offer higher returns. They can outperform the market through strategic stock selection.

Hybrid Funds
Hybrid funds, which mix equity and debt, provide a balanced approach. They reduce risk while offering growth potential.

Diversified Portfolio
Ensure your portfolio is diversified across different sectors and asset classes. This reduces risk and improves potential returns.

Regular Investments and SIPs
Continue with your annual savings of 1-2 lakhs. Investing this regularly through Systematic Investment Plans (SIPs) can benefit from rupee cost averaging.

SIPs in diversified equity and hybrid funds can provide consistent growth and reduce market volatility impact.

Importance of Active Fund Management
Actively managed funds have professional managers aiming to outperform the market. Unlike index funds, they can adapt to market changes and select high-potential stocks.

This active management can lead to better returns over time, aligning with your goal of a 3-crore corpus.

Professional Guidance
Consulting a Certified Financial Planner (CFP) can provide tailored advice. A CFP can help you select suitable funds, monitor your portfolio, and make adjustments as needed.

Investing through a CFP ensures you benefit from expert guidance, crucial for achieving long-term goals.

Disadvantages of Index Funds
Index funds, while low-cost, simply replicate an index. They lack the flexibility to react to market conditions and can't outperform the index.

Actively managed funds, however, strive for better returns through strategic decisions and active asset allocation.

Reviewing and Rebalancing
Regularly review your portfolio to ensure it aligns with your goals. Market conditions change, and periodic rebalancing is essential.

A diversified portfolio with active management and regular reviews can help you stay on track to achieve your retirement goal.

Conclusion
With disciplined investing and strategic allocation of your inherited funds, retiring with a corpus of 3 crores by age 45 is possible.

Focus on a balanced and actively managed portfolio, and seek professional guidance for the best outcomes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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  |9195 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 02, 2024

Asked by Anonymous - Apr 14, 2024Hindi
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Greetings ! I have the following question for your expert advice: I am 43 + by age and currently into private sector service. I have no obligation towards any loan or EMI. At present I have around 10 Lac corpus into different MFs (with current market value of 14L) through monthly SIP of around 20,000. In terms of financial back up I have FDs (10 Lac.), EPF (5L), PPF (Both Self & Spouse 14L) and NPS (5L). In terms of obligation, my son is in 9th standard and his education costs is secured through LIC policies. Apart from that I have Health Insurance (15L) and Term Insurance (1 Cr.) I am planning to retire after 10 years and wanted to know what will be the ideal amount of corpus fund for a happy retirement and how to achieve that in next 10 years.
Ans: It's commendable that you're planning ahead for your retirement. To determine the ideal corpus for a happy retirement, you'll need to consider factors such as your desired lifestyle, expected expenses, inflation, and life expectancy. A certified financial planner can help you calculate a personalized retirement corpus based on these factors.

To achieve your retirement goals in the next 10 years, consider the following steps:

Evaluate Current Investments: Review your current investment portfolio, including MFs, FDs, EPF, PPF, and NPS. Assess their performance, risk profile, and alignment with your retirement goals.
Set Retirement Goals: Determine your desired retirement lifestyle and estimated expenses. Factor in inflation and other potential costs such as healthcare and leisure activities.
Calculate Required Corpus: Work with a financial planner to calculate the required retirement corpus based on your goals, expenses, and expected returns. Consider factors like inflation and longevity risk.
Optimize Savings and Investments: Maximize contributions to retirement-focused investment vehicles such as EPF, PPF, and NPS. Consider increasing SIP amounts or diversifying into other investment avenues to accelerate wealth accumulation.
Monitor and Adjust: Regularly review your investment portfolio and make adjustments as needed to stay on track towards your retirement goals. Consider rebalancing your portfolio periodically and reassessing your risk tolerance.
Remember that retirement planning is a dynamic process, and it's essential to adapt your strategy as your circumstances change. By starting early and seeking professional advice, you can build a robust retirement corpus and enjoy a financially secure future.

..Read more

Ramalingam

Ramalingam Kalirajan  |9195 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 2024

Asked by Anonymous - May 23, 2024Hindi
Money
Hi, I am 34 years old working in PSU Bank. Present Status of Investment is NPS- ? 20 lacs FDs- ? 4 lacs PPF (9 Financial years completed) - ? 9 lacs SIP- ? 1.65 lacs (Mirae Asset Midcap- 5k, Canara Robeco Small Cap- 2k, Quant Small Cap- 2k, DSP Next 50 index- 1k) LIC- ? 20 lacs SI (Guaranteed Bonus for 8 years- ? 5.84 lacs) Term Insurance and Health Insurance policy taken. Major Liabilities include Fresh Housing Loan- ? 50 lacs Car loan outstanding - ? 8 lacs I want to retire early and want to create a purely liquid corpus of ? 5-7 Cr by the age of 45 . Request you to provide financial advise in this regard.
Ans: Understanding Your Financial Situation
Your dedication to financial planning is admirable. At 34, you have already made substantial investments and have a clear goal of early retirement. Your current investments include Rs 20 lakh in NPS, Rs 4 lakh in FDs, Rs 9 lakh in PPF, and Rs 1.65 lakh in SIPs. Additionally, you have Rs 20 lakh in LIC and significant term and health insurance coverage.

Evaluating Current Investments
Your investment portfolio shows a diverse mix of instruments. Each has its strengths and contributes to your financial security. Let's evaluate each component to ensure it aligns with your early retirement goal.

NPS Investments
Your Rs 20 lakh investment in NPS is a strong foundation. NPS offers a mix of equity and debt exposure, balancing growth and stability. However, it has a lock-in period until retirement, limiting liquidity.

To create a liquid corpus, consider diversifying into more liquid investments. Consulting a Certified Financial Planner (CFP) can help optimize your NPS allocation to align with your retirement timeline.

Fixed Deposits (FDs)
FDs offer security and guaranteed returns, but they often yield lower returns compared to other investments. With Rs 4 lakh in FDs, you have a secure base. However, consider balancing this with higher-return investments to achieve your retirement goal.

Public Provident Fund (PPF)
Your Rs 9 lakh in PPF is a wise choice for tax-free, long-term savings. PPF provides stable returns and is government-backed, ensuring safety. However, like NPS, it has a lock-in period, limiting liquidity.

To reach your goal, ensure other investments are more liquid. This strategy provides both growth and accessibility.

Systematic Investment Plans (SIPs)
Your SIPs in mutual funds are a dynamic component of your portfolio. Investing Rs 1.65 lakh in various mutual funds shows your commitment to growth. Actively managed funds can offer better returns compared to index funds. Fund managers adjust portfolios based on market conditions, optimizing performance.

Direct mutual funds have lower expense ratios but require significant knowledge and time. Investing through a Certified Financial Planner (CFP) ensures professional management and better outcomes.

Life Insurance Corporation (LIC)
Your Rs 20 lakh in LIC provides a safety net for your family. However, traditional LIC policies often yield lower returns compared to other investments. Surrendering your LIC policy and reinvesting the premium amount in mutual funds can potentially yield higher returns. Mutual funds offer better growth prospects and flexibility, enhancing your financial goals. Consulting with a CFP will help you make an informed decision and optimize your investment strategy.

Managing Liabilities
Your fresh housing loan of Rs 50 lakh and car loan of Rs 8 lakh are major liabilities. Managing these loans effectively is crucial for your financial health.

Housing Loan
Housing loans typically have lower interest rates and tax benefits. Prioritize paying off high-interest debt first. Ensure your EMI payments are manageable and align with your income.

Car Loan
Car loans usually have higher interest rates. Consider paying off your car loan faster to reduce interest costs. This strategy frees up more funds for investment, helping you reach your retirement goal.

Creating a Liquid Corpus
To achieve a liquid corpus of Rs 5-7 crore by age 45, you need a strategic investment plan. Here are key steps:

Increase SIP Contributions
Increasing your SIP contributions can significantly boost your corpus. Regular, disciplined investments in mutual funds can yield substantial returns. Aim to increase your SIP amounts annually, aligning with income growth.

Diversify Investment Portfolio
Diversification spreads risk and enhances potential returns. Invest in a mix of equity and debt instruments. Actively managed funds can provide better growth opportunities. Diversify across sectors and geographies for balanced growth.

Focus on High-Return Investments
Equity mutual funds and stocks offer higher returns but come with higher risk. Balance your portfolio with a mix of high-return and low-risk investments. This strategy optimizes growth while managing risk.

Regular Review and Adjustments
Regularly reviewing and adjusting your investment plan is crucial. Monitor your portfolio's performance and make necessary changes. Stay informed about market trends and economic conditions. Consulting a CFP ensures your plan remains effective and aligned with your goals.

Building an Emergency Fund
An emergency fund covering 6-12 months' expenses provides financial security. Ensure this fund is easily accessible and separate from your main investments. This strategy protects your savings from unexpected expenses.

Ensuring Adequate Insurance Coverage
Adequate health and life insurance coverage is crucial. Review your existing policies and consider additional coverage if needed. Insurance protects your savings from unforeseen medical and life events.

Planning for Inflation
Inflation erodes purchasing power over time. Plan for inflation by investing in instruments that provide inflation-adjusted returns. Actively managed funds and equity investments can offer higher returns to combat inflation.

Conclusion
Your disciplined saving and investment approach is commendable. Balancing fixed-income investments, mutual funds, and managing liabilities ensures stability and growth. Consulting a Certified Financial Planner ensures expert guidance and optimization.

Regularly review and adjust your financial plan to stay on track. Building an emergency fund and ensuring adequate insurance coverage provide financial security. Your goal of a liquid corpus of Rs 5-7 crore by age 45 is achievable with a strategic, disciplined approach.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9195 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 2024

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I am 39 male. I have a current corpus as follows. MF 15L, PF 23L, PPF 5L, company share 7L, NPS 8 lakhs (10k per month), 60L stock trading earning 2% per month, loan outstanding 15L, earning 3L per month and adding 50k per month into trading capital. I have a home of 1 crore and one kid . I continue 36k per month MF SIP, 28k per month MF, 40kvhome loan emi. After 7 years all these will accumulate to these numbers PF 75 lkhs Company share 40lakgs MF 80 lakhs EL & gratuity 15 lakhs LIC 35 lakhs I want to retire at 45 and wishing and confident to accumulate 7 crores in total. These are my plans for retirement. 1. Planning to do a MF SWP for 60k per month or 5% per anum from a corpus of 1.5 Cr. Will that 1.5 crore grow and last beating inflation till the rest of my life? 2. I wish to put these amounts in MF .50lakhs for emergency fund, 50lakhs kids education and marriage. 3. Will keep on trading with the remaining 4-5 crores cautiously till I attain 60 years of age. Is there any suggestions on asset allocation, or any other way of putting funds now and after retirement?
Ans: Planning for retirement is a significant financial decision, especially when aiming to retire early. You have a clear vision for your financial future, and your detailed plan shows that you have given it a lot of thought. Let's evaluate your current situation and future plans, and provide suggestions to help you achieve your retirement goals by age 45.

Current Financial Snapshot
You have a diverse portfolio with various investments. Your assets and monthly contributions are:

Mutual Funds: Rs 15 lakhs
Provident Fund (PF): Rs 23 lakhs
Public Provident Fund (PPF): Rs 5 lakhs
Company Shares: Rs 7 lakhs
National Pension System (NPS): Rs 8 lakhs (contributing Rs 10,000 monthly)
Stock Trading: Rs 60 lakhs, earning 2% monthly
Loan Outstanding: Rs 15 lakhs
Monthly Earnings: Rs 3 lakhs
Monthly SIP in Mutual Funds: Rs 36,000
Additional Monthly Mutual Fund Investment: Rs 28,000
Monthly Home Loan EMI: Rs 40,000
Your home is valued at Rs 1 crore, and you have one child.

Future Projections
In seven years, you expect your investments to grow as follows:

PF: Rs 75 lakhs
Company Shares: Rs 40 lakhs
Mutual Funds: Rs 80 lakhs
Employee Provident Fund (EPF) and Gratuity: Rs 15 lakhs
LIC: Rs 35 lakhs
You aim to accumulate a total corpus of Rs 7 crores by the age of 45.

Retirement Income Strategy
You plan to implement a Mutual Fund Systematic Withdrawal Plan (SWP) for Rs 60,000 per month or 5% per annum from a corpus of Rs 1.5 crores.

Assessing the SWP Plan
Using a SWP for a steady income is a popular strategy. However, the sustainability of this plan depends on the growth of your corpus and inflation.

Growth and Longevity: If your mutual fund investments grow at a rate higher than your withdrawal rate (5%), your corpus can sustain and even grow over time. However, this requires choosing actively managed funds with a good track record of beating inflation and market returns.

Inflation Impact: Over the years, inflation can erode the purchasing power of your withdrawals. Ensure your investments are in funds that consistently outperform inflation.

Asset Allocation for Safety and Growth
Diversifying your investments is crucial to managing risk and ensuring growth. Let's assess your proposed allocations:

Emergency Fund (Rs 50 lakhs): Having a substantial emergency fund is wise. Ensure this is kept in a highly liquid, low-risk investment, such as a money market fund or a high-interest savings account.

Child’s Education and Marriage (Rs 50 lakhs): Investing this amount in mutual funds for long-term goals is prudent. Consider equity-oriented funds with a history of good performance.

Trading Strategy
Continuing with stock trading cautiously till 60 years of age can be lucrative. However, trading involves significant risk.

Risk Management: Ensure you have a robust risk management strategy. Never risk more than you can afford to lose, and maintain a diversified trading portfolio.

Consistent Earnings: Achieving a consistent 2% monthly return is ambitious. Regularly review and adjust your trading strategies based on market conditions.

Recommendations for Asset Allocation
Diversify Investments: Diversify between equity, debt, and hybrid funds to balance risk and return.

Regular Review: Regularly review and adjust your portfolio to align with market conditions and life changes.

Professional Guidance: Consider periodic consultations with a Certified Financial Planner to ensure your strategy remains sound and aligned with your goals.

Conclusion
Your detailed planning and disciplined approach are commendable. With a focus on maintaining diversified investments and managing risks, you are well-positioned to achieve your retirement goals. Your proactive planning for an emergency fund and child’s education ensures financial security for unforeseen events and important milestones.

Final Thoughts
Stay Informed: Keep abreast of market trends and economic changes.
Be Flexible: Be ready to adjust your strategies as needed.
Prioritize Security: Ensure your investments align with your risk tolerance and long-term goals.
Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9195 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 28, 2024

Asked by Anonymous - Aug 18, 2024Hindi
Money
I am 44 with monthly income of 1.9 L per month. My current portfolio is Mutual Fund - 5 L { SIP - Rs 15000 per Month } Equity - 3 L PF - 12 L FD - 6 L NPS / PPF - 2 L Sukanya - 2 L Old Insurance policies & Ulip - Around 5 L Medical Insurance covered for family Home Loan pending - 38 L { EMI of 53000 per month } I am planning to retire by 55 and looking for a corpus of 4 Cr. Please suggest how do i proceed?
Ans: You are 44 years old with a stable income of Rs. 1.9 lakh per month. Your portfolio consists of:

Mutual Funds: Rs. 5 lakh, with a SIP of Rs. 15,000 per month.

Equity: Rs. 3 lakh in direct equity.

Provident Fund: Rs. 12 lakh, offering steady, risk-free growth.

Fixed Deposit: Rs. 6 lakh, providing secure, low-risk returns.

NPS/PPF: Rs. 2 lakh in these long-term retirement-focused instruments.

Sukanya Samriddhi Yojana: Rs. 2 lakh, a good plan for your daughter’s future.

Old Insurance Policies & ULIPs: Around Rs. 5 lakh, combining insurance and investment.

Medical Insurance: Adequate coverage for your family.

Home Loan: Rs. 38 lakh pending, with an EMI of Rs. 53,000 per month.

You aim to retire by age 55, with a target retirement corpus of Rs. 4 crore. This is an ambitious yet achievable goal with disciplined planning.

Evaluating Your Current Portfolio
Your portfolio is diversified across various asset classes. Here’s a brief assessment:

Mutual Funds: You have Rs. 5 lakh invested, with a SIP of Rs. 15,000 per month. This is a solid start, but you’ll need to increase your SIP over time to reach your goal.

Equity: Rs. 3 lakh in direct equity offers growth potential. However, direct equity requires active management and carries higher risk. Consider whether you have the time and expertise to manage this actively.

Provident Fund (PF): Rs. 12 lakh in PF provides a safe and steady return. It’s a good foundation for your retirement planning, but it alone won’t suffice to reach your Rs. 4 crore target.

Fixed Deposit (FD): Rs. 6 lakh in FD is low-risk but offers limited growth. This is useful for emergencies or short-term needs, but it won’t help much in wealth accumulation.

NPS/PPF: Rs. 2 lakh here is beneficial for long-term tax-efficient growth. Continue contributing to these, as they will form part of your retirement corpus.

Sukanya Samriddhi Yojana: Rs. 2 lakh is a smart investment for your daughter’s education and marriage expenses. This is a long-term, tax-free investment, which is beneficial.

Old Insurance Policies & ULIPs: Rs. 5 lakh here may not be optimally allocated. ULIPs often have high costs and suboptimal returns compared to mutual funds. These should be reviewed and possibly restructured.

Medical Insurance: You’ve ensured coverage for your family, which is essential. This helps safeguard your financial planning from unexpected medical expenses.

Home Loan: Rs. 38 lakh pending with an EMI of Rs. 53,000 per month is a significant commitment. This is manageable given your income but impacts your monthly cash flow. Paying this off before retirement would ease financial pressure.

Steps to Reach Your Rs. 4 Crore Retirement Corpus
To achieve a retirement corpus of Rs. 4 crore by age 55, a structured approach is necessary. Let’s break it down:

1. Increase Your SIP Contributions
Current Situation: You invest Rs. 15,000 per month in SIPs. While this is good, it’s not enough to reach your Rs. 4 crore goal.

Recommended Action: Gradually increase your SIP contributions. Aim to increase by at least 10-15% every year. As your income grows, channel a portion of the increments into your SIPs. This helps in capitalizing on the power of compounding.

Focus on Actively Managed Funds: Actively managed funds are preferable over index funds due to their potential for higher returns. Work with an MFD with CFP credentials to choose the best funds.

2. Review and Restructure Old Insurance Policies & ULIPs
Current Situation: You have Rs. 5 lakh in old insurance policies and ULIPs. These may not be the most efficient investments for wealth creation.

Recommended Action: Review these policies with your Certified Financial Planner. If they are underperforming or carrying high costs, consider surrendering them and reallocating the funds to mutual funds. This will give you better returns in the long run.

Shift Focus to Term Insurance: If you don’t have term insurance, consider getting it. Term insurance offers high coverage at a low cost, ensuring your family’s financial security without mixing insurance and investment.

3. Maximize Contributions to PPF and NPS
Current Situation: You have Rs. 2 lakh in PPF and NPS combined. These are long-term, tax-efficient investment vehicles.

Recommended Action: Maximize your contributions to PPF each year. It’s a risk-free, tax-free option with a decent return. NPS is also beneficial, especially for its tax advantages. Consider increasing your NPS contributions, especially if your employer offers matching contributions.

Diversify Within NPS: Choose an asset allocation within NPS that aligns with your risk tolerance. A mix of equity and debt within NPS can provide balanced growth and safety.

4. Pay Down Your Home Loan Strategically
Current Situation: You have Rs. 38 lakh left on your home loan, with a hefty EMI of Rs. 53,000 per month.

Recommended Action: Paying off your home loan before retirement should be a priority. You don’t want a large liability hanging over your head post-retirement. Consider making additional payments towards the principal whenever possible. This will reduce the loan tenure and the interest paid over time.

Balance Between Investment and Loan Repayment: While it’s important to pay down your loan, don’t compromise on your investments. Find a balance where you can continue to grow your wealth while reducing debt.

5. Emergency Fund and FD Utilization
Current Situation: You have Rs. 6 lakh in FD, which is good for emergencies.

Recommended Action: Keep at least 6-12 months’ worth of expenses in your FD as an emergency fund. If you have excess funds beyond this, consider moving them to higher-yield investments, such as mutual funds or PPF, which offer better growth prospects.

Liquidity Needs: Ensure your emergency fund is easily accessible. Don’t tie up all your savings in long-term investments without having liquid reserves.

6. Direct Equity and Risk Management
Current Situation: You have Rs. 3 lakh in direct equity. This carries higher risk and requires active management.

Recommended Action: Evaluate your equity portfolio with your Certified Financial Planner. Ensure your stock picks align with your risk tolerance and retirement goals. If managing direct equity is overwhelming, consider shifting some of these funds to mutual funds, where professional managers can handle your investments.

Diversification: Avoid over-concentration in any one sector or stock. Diversify your holdings to reduce risk.

7. Consider Additional Retirement Vehicles
Current Situation: Your retirement savings are spread across various instruments.

Recommended Action: Explore additional retirement vehicles such as Voluntary Provident Fund (VPF) or Senior Citizens Savings Scheme (SCSS) when you approach 55. These provide secure, government-backed options for retirement savings.

Don’t Rely Solely on One Source: Ensure your retirement corpus is spread across multiple sources to reduce risk and provide flexibility.

8. Regular Portfolio Review and Rebalancing
Current Situation: Your portfolio needs to be regularly monitored to stay aligned with your goals.

Recommended Action: Schedule regular reviews with your Certified Financial Planner. Adjust your portfolio based on market conditions and your evolving financial situation. As you approach retirement, gradually shift from high-risk to lower-risk investments to preserve your capital.

Stay Disciplined: Avoid making emotional decisions based on short-term market fluctuations. Stick to your long-term plan, and make adjustments only when necessary.

9. Estate Planning and Will Creation
Current Situation: While your focus is on retirement, it’s also essential to think about estate planning.

Recommended Action: Create a will to ensure your assets are distributed according to your wishes. This will prevent legal complications for your family later. Consider discussing with your Certified Financial Planner the need for a trust if your estate is substantial.

Nomination Updates: Ensure all your investments, insurance policies, and retirement accounts have updated nominations. This simplifies the process for your beneficiaries.

Finally
Your goal of a Rs. 4 crore retirement corpus by age 55 is achievable. It requires a disciplined approach, increasing your SIP contributions, optimizing your existing portfolio, and paying down debt. Work closely with your Certified Financial Planner to ensure your investments align with your goals. Regular reviews and adjustments will keep you on track towards a secure and comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9195 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 04, 2024

Asked by Anonymous - Nov 04, 2024Hindi
Money
Hi I am 44 years old and have 5 cr in FD,s , 1.5 cr in MF with over 1 lac monthly SIP investing in flexi cap , balanced fund , large caps, mid cap and small cap funds with an investment horizon of 10 years. Have 20 lacs in stocks , investing 7 lacs annually in annuity plan HDFC sanchay, and around 4 lacs in various insurance policies for tax free(ICICI and sriram) returns. Also I have started a sip(2k each ) for my 2 kids aged 5 and 12 in mid cap funds ..looking to increase this every year time horizon 30 years .. I would like to retire now and am looking at a swp of atleast 3-4 lacs per month after 6 years from my MF's. And annuity returns . Till that time my FD,s will also mature.. Would it be possible to earn 4 lacs through swp after 6 years...and I would like to build a corpus of around 30 cr after 15 years.. please suggest if I am on the right track.. Would it be possible to generate
Ans: Your current investments reflect thoughtful planning with multiple assets like mutual funds, FDs, annuities, and insurance. You are aiming for a substantial retirement corpus of Rs 30 crores and plan to generate a monthly income of Rs 3-4 lakhs through SWP in six years. Let's evaluate if you’re on track and explore recommendations to enhance your strategy.

1. Evaluating Your Mutual Fund Investments for SWP Needs
Your current SIPs are in flexi-cap, balanced, large-cap, mid-cap, and small-cap funds, which align well with your growth and SWP goals. Here’s how these investments can work towards achieving your objectives:

High-Return Potential in Equity Funds: Over 10 years, your equity-oriented funds (large-cap, mid-cap, small-cap) can provide growth, supporting your monthly withdrawal goals.

Balanced Funds for Stability: Balanced funds add stability to your portfolio, reducing market volatility's impact on withdrawals.

Flexi-Cap Diversification: Flexi-cap funds enhance flexibility, adjusting across large, mid, and small-cap stocks as per market conditions.

2. Systematic Withdrawal Plan (SWP) for Regular Monthly Income
Generating a SWP of Rs 3-4 lakhs after six years is achievable with a focused approach. Here’s a breakdown:

Establish a SWP Strategy: With a strong equity base, an SWP from your mutual funds can generate a monthly income. Reinvesting dividends or interest could further enhance your returns.

Aligning Fund Selection with SWP: Large-cap and balanced funds can be core SWP assets, as they are less volatile and provide stable growth.

Plan for Market Fluctuations: Market fluctuations could impact SWP withdrawals. You may consider moving a portion to debt funds closer to retirement for stability.

3. Increasing Your Kids' SIPs with Long-Term Vision
For your children, a 30-year horizon in mid-cap funds is promising. Increasing their SIPs regularly will amplify the impact of compounding:

Annual SIP Increase: Aim to raise the SIP amount yearly. Gradual increases, even by a few thousand rupees, can yield significant growth over 30 years.

Mid-Cap Growth Potential: Mid-cap funds can provide substantial returns over the long term. Diversifying with large-cap or flexi-cap funds could add stability.

Reinvestment in Tax-Efficient Funds: As your children reach different financial milestones, you can gradually move to tax-efficient funds or low-risk options for stability.

4. Reassessing Fixed Deposits and Annuities for Wealth Maximisation
Currently, a significant portion of your investments is in FDs and an annuity plan. Let’s evaluate the pros and cons of these investments:

Fixed Deposits for Short-Term Stability: FDs are stable but offer limited returns compared to mutual funds. Upon maturity, consider reinvesting in a mix of equity and debt mutual funds for higher growth potential.

Annuity Limitations: Annuity plans provide steady income but typically have lower returns. Since annuity returns are fixed, they may not keep up with inflation over the long term.

Shifting Focus to Equity Mutual Funds: Reinvesting your FD maturity and annuity corpus into mutual funds could help you achieve your Rs 30 crore target faster.

5. Optimising Insurance Plans for Better Returns
Your insurance plans provide tax-free returns, but it’s essential to assess whether they align with your overall goals. Here’s a perspective on your ICICI and Shriram policies:

Limited Growth in Traditional Insurance: Traditional insurance offers tax-free returns but often has limited growth potential.

Consider Surrendering for Higher Growth: If these policies underperform compared to mutual funds, you may consider surrendering them. Reinvesting in mutual funds could yield higher long-term returns.

Insurance for Protection, Not Investment: Moving towards term insurance for coverage and mutual funds for investment may be a more effective approach.

6. Building a Rs 30 Crore Corpus Over the Next 15 Years
Achieving a Rs 30 crore corpus in 15 years will require a strategic blend of high-growth investments. Here’s a suggested approach:

Focus on Equity Funds for Growth: Equity funds, especially mid and small-cap, can accelerate your portfolio growth. Increasing SIPs over time will enhance your corpus.

Reinvest Maturity Proceeds: As your FDs mature, reinvest them into equity and balanced mutual funds to benefit from compounding.

Balance with Debt Funds in Later Years: As you near your goal, gradually move funds to debt mutual funds. This will reduce risk and protect the corpus for withdrawal.

7. Disadvantages of Index Funds and Direct Plans
Although index funds and direct funds are popular, there are better options for your high-growth goals:

Index Funds’ Growth Limitation: Index funds simply track the market and don’t aim for higher returns. Actively managed funds, on the other hand, can outpace the market.

Direct Plans Lack Professional Guidance: With direct plans, there’s no personalised guidance. Investing through a Certified Financial Planner ensures regular monitoring and timely adjustments.

8. Tax Considerations on Mutual Fund Withdrawals
Tax-efficient planning is essential for maximising SWP returns:

Equity Fund Taxation: For equity mutual funds, LTCG over Rs 1.25 lakh is taxed at 12.5%. STCG is taxed at 20%. Plan withdrawals to stay within these limits for minimal tax impact.

Debt Fund Taxation: Debt mutual funds are taxed according to your tax slab. Using a mix of debt and equity can balance returns with lower taxes.

Final Insights
Your diversified portfolio places you on a solid path to a secure retirement and wealth creation. Increasing SIPs for your kids, reinvesting maturing FDs, and focusing on mutual funds over insurance and annuities will strengthen your approach. Working closely with a Certified Financial Planner will keep your investments aligned with your Rs 30 crore goal, ensuring a steady retirement income and lasting legacy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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Latest Questions
Nayagam P

Nayagam P P  |6973 Answers  |Ask -

Career Counsellor - Answered on Jun 24, 2025

Career
Sir, My son got 95 percentile in MH CET, got 1450 rank in NMIMS in phase 2 and 16000 rank in Manipal. There is a possibility that he might get Btech (CSE) MBA in NMIMS, CPS in Manipal in last round of counselling. Should we go ahead with NMIMS or wait for Manipal and MHCET registration to start.We reside in Mumbai.
Ans: Monika Madam, With a 95 percentile in MHT CET, 1450 rank in NMIMS (Phase 2), and 16,000 rank in Manipal, your son is likely to get BTech (CSE)+MBA at NMIMS Mumbai, and may secure Computer & Physical Sciences (CPS) or lower-demand CSE specializations at Manipal in the final rounds, though CSE core at MIT Manipal typically closes below 1,600. NMIMS Mumbai’s integrated BTech+MBA program offers strong industry exposure, modern infrastructure, and a 90–100% placement rate for tech and management roles, with an average package of ?10.7 lakh for MBA Tech and a robust recruiter base. Manipal Institute of Technology is highly ranked, with a 98.6% CSE placement rate, average package of ?11.76 lakh, and over 230 recruiters, but CPS is a less mainstream course and CSE core is unlikely at your rank. MHT CET 95 percentile opens doors to reputable private Mumbai colleges (VESIT, Vidyalankar, Shah & Anchor, SIES GST) for CSE/IT, but not to top government colleges like VJTI or SPIT, whose CSE cutoffs are above 97–99 percentile.

The recommendation is to accept BTech (CSE)+MBA at NMIMS Mumbai for its strong placement record (however, please check its REFUND POLICY if you withdraw the seat), integrated management edge, and Mumbai location, while keeping an eye on Manipal’s final rounds for any CSE-related seat, and also participating in MHT CET counselling for private Mumbai colleges as a backup. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |6973 Answers  |Ask -

Career Counsellor - Answered on Jun 24, 2025

Career
My soon has been allotted electrical engineering (E1) at IIT delhi.in the subsequent rounds he may get computer science at IIT roorki.sholld he go for it.he has interest in both. Ashok
Ans: Ashok Sir, Both Electrical Engineering at IIT Delhi and Computer Science Engineering at IIT Roorkee are highly prestigious, offering excellent academic environments, strong alumni networks, and outstanding placement records. IIT Delhi’s Electrical Engineering program is ranked #2 in NIRF 2024, consistently achieves 90–100% placement rates, and provides broad opportunities in core engineering, software, analytics, and finance, with top recruiters like Texas Instruments, Siemens, and global tech firms. IIT Roorkee’s CSE program is also top-ranked, with nearly 96% placement, a median salary of ?19.7 lakh, and the highest number of software development offers in 2025, attracting leading recruiters such as Amazon, Microsoft, and Goldman Sachs. While IIT Delhi offers the advantage of location, interdisciplinary exposure, and a slightly higher institutional reputation, CSE at IIT Roorkee opens doors to the most in-demand tech roles, higher average packages, and strong industry connections, especially in software and data science. Both branches allow for interdisciplinary career shifts, but CSE generally offers broader and more lucrative opportunities in the current job market.

The recommendation is to opt for Computer Science Engineering at IIT Roorkee if allotted, as it provides greater flexibility, higher placement rates, and more diverse career prospects, while Electrical Engineering at IIT Delhi remains an excellent alternative for those interested in core engineering and interdisciplinary roles. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |6973 Answers  |Ask -

Career Counsellor - Answered on Jun 24, 2025

Career
Dear Sir, My daughter got admission into IPM at NALSAR University and a BBA admission in Symbiosis Nagpur and Hyderabad Campuses, which would be a better choice.
Ans: Murthy Sir,NALSAR University’s IPM is a five-year integrated BBA+MBA program designed to blend management education with legal, ethical, and interdisciplinary perspectives, offering rigorous coursework, industry exposure, and a strong alumni network. The curriculum emphasizes law, management, technology, and sustainability, with real-world projects, case competitions, and continuous engagement with business leaders. NALSAR’s placements for MBA/IPM average 80–90%, with top recruiters like Deloitte, KPMG, Reliance, and Tech Mahindra, and an average package of ?7–7.5 lakh. Symbiosis BBA at Nagpur and Hyderabad is a three-year program with robust infrastructure, international exposure, and 40–50% placement rates, averaging ?4–5 lakh, and offers good industry internships and a flexible curriculum. Symbiosis has a strong brand and network, but its BBA is an undergraduate-only degree, while NALSAR’s IPM leads to a master’s and is more academically intensive and interdisciplinary.

The recommendation is to choose IPM at NALSAR University for its integrated BBA+MBA structure, higher placement rates, and unique blend of management and legal education, which offers broader career prospects and a stronger foundation for leadership roles compared to the standalone BBA at Symbiosis Nagpur or Hyderabad. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

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Career Counsellor - Answered on Jun 24, 2025

Career
Sir my daughter got cse in iter soa and Etc Vlsi design at kiit for b.tech in 2025 which one she should prefer?
Ans: Pradipta Madam, ITER SOA’s CSE program in Bhubaneswar is well-regarded, offering 90–100% placement rates in recent years, with over 250 recruiters including Accenture, Deloitte, Amazon, TCS, Infosys, and Microsoft, and an average package of ?4–7 lakh. The campus hosts modern infrastructure, strong academic support, and a large student community, with robust internship opportunities (80–90% of students get internships) and a curriculum aligned with current IT industry needs. KIIT’s ETC VLSI Design program is specialized, focused on electronics and semiconductor design, and also boasts high placement rates (often 90–95%), with core companies like Bosch, Capgemini, and IBM participating. VLSI is a niche but rapidly growing field, offering lucrative roles in chip design and embedded systems, but the sector is more specialized compared to the broad IT/software opportunities available to CSE graduates. Both campuses are in Bhubaneswar and offer strong academic and placement support, but CSE at ITER SOA provides more diverse career options and a wider recruiter base, while KIIT’s VLSI design is best for those with a clear interest in electronics and chip design.

The recommendation is to choose CSE at ITER SOA for broader career opportunities, higher placement flexibility, and a strong IT/software orientation, unless your daughter has a specific passion for electronics and semiconductor design, in which case KIIT’s ETC VLSI Design is a strong specialized alternative. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |6973 Answers  |Ask -

Career Counsellor - Answered on Jun 24, 2025

Asked by Anonymous - Jun 24, 2025Hindi
Career
Sir, which one is best for CSE, bmsce or Jiit Noida main campus.
Ans: BMS College of Engineering (BMSCE) Bangalore is widely regarded as one of India’s top private engineering colleges, with a strong reputation for CSE, A++ NAAC accreditation, and consistent 80–100% placement rates for CSE, averaging ?8–13 lakh, and over 350 recruiters including Microsoft, Amazon, and Oracle. Faculty at BMSCE are highly qualified, supportive, and experienced, with a curriculum that emphasizes industry relevance and practical exposure, though some students note the need for more frequent curriculum updates. Jaypee Institute of Information Technology (JIIT) Noida’s CSE program also boasts high placement rates (88–99%), a robust IT infrastructure, and a faculty with over 50 PhDs in the CSE/IT department, but some students mention less interactive teaching styles. While JIIT offers excellent industry exposure and a modern campus, BMSCE’s legacy, placement consistency, and Bangalore’s tech ecosystem provide a significant edge for CSE aspirants.

The recommendation is to choose BMSCE Bangalore for CSE due to its superior placement record, highly qualified faculty, industry connections, and the advantages of being located in India’s technology capital, while JIIT Noida remains a strong alternative for those seeking a research-focused environment in North India. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |6973 Answers  |Ask -

Career Counsellor - Answered on Jun 24, 2025

Career
Sir my brother got 34400 rank in kcet and he want cse but he is ready to take core branch like AIML , IS etc but we are getting confusion will we get college or not if yes which college sir can u suggest plz and DSU have chance for 2nd round in getting AIML if we get this it will be good sir or any other option is their or not sir...
Ans: Deepti, With a KCET rank of 34,400, your brother has viable options for engineering admission, though CSE at top-tier colleges is challenging. The minimum qualifying KCET rank typically ranges between 40,001-50,000, making his rank well within the admission threshold. For CSE branches, cutoffs at top colleges like RVCE, BMSCE, and MSRIT close well below 8,000-10,000, placing them out of reach. However, AIML and Information Science branches at mid-tier colleges remain accessible, with AIML cutoffs extending up to 47,600-48,800 at various institutions.

For Dayananda Sagar University (DSU), the overall KCET cutoff ranges from 21,178-257,314 across all categories and rounds. DSU's B.Tech in Computer Science Engineering (AIML) had a last round closing rank of 33,135 for General category in 2024, making admission possible for your brother in Round 2 counselling. Alternative strong options include colleges like CMR Institute of Technology (AIML cutoff: 14,000-14,800), BMS Institute of Technology (AIML cutoff: 11,070-14,712), Global Academy of Technology (AIML cutoff: 23,200-23,300), and RNS Institute of Technology (AIML cutoff: 15,900-16,000). Private colleges generally accept ranks up to 80,000 for CSE and 90,000-100,000 for other branches.

The recommendation is to actively participate in Round 2 counselling for DSU's AIML program while simultaneously applying to CMR Institute of Technology, BMS Institute of Technology, Global Academy of Technology, and RNS Institute of Technology for AIML or Information Science branches, as these colleges offer strong placement records and industry exposure at your rank range. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |6973 Answers  |Ask -

Career Counsellor - Answered on Jun 24, 2025

Career
My son got 91.2 percentile in MH CET WHere can get admission in mumbai
Ans: With a 91.2 percentile in MHT CET 2025, your son’s expected rank is around 24,000–30,000, which is below the cutoff for top Mumbai colleges like VJTI, SPIT, and KJ Somaiya for CSE or IT, as these typically require 97–99 percentile. However, he can secure admission in reputable private and aided colleges in Mumbai for branches like IT, E&TC, Mechanical, or sometimes CSE in later rounds. Likely options include Vidyalankar Institute of Technology (VIT) Mumbai, Shah & Anchor Kutchhi Engineering College, SIES Graduate School of Technology, Fr. Conceicao Rodrigues College of Engineering (Bandra), Bharati Vidyapeeth College of Engineering (Navi Mumbai), Don Bosco Institute of Technology, and Atharva College of Engineering, all of which have CSE/IT cutoffs in the 88–95 percentile range for open category. These colleges offer good placement records and academic support, though CSE/IT may require waiting for later CAP rounds or considering related branches.

The recommendation is to prioritize Vidyalankar Institute of Technology, Shah & Anchor, SIES GST, Fr. Conceicao Rodrigues, and Bharati Vidyapeeth Navi Mumbai for IT, E&TC, or Mechanical, and keep CSE/IT as a preference in counselling, as these colleges offer strong placement and academic environments at his percentile. All the BEST for the Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |6973 Answers  |Ask -

Career Counsellor - Answered on Jun 24, 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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