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Vivek

Vivek Lala  | Answer  |Ask -

Tax, MF Expert - Answered on Oct 09, 2023

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Kannan Question by Kannan on Oct 09, 2023Hindi
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Hello, I am 39 years old and have just started to invest in MF. Aim is to have good retirement life and funds for son’s education in the next 6-7 years. I am good to invest 1-1.2lacs a month and currently started investing in below funds: Mirae large and Mid cap funds Nippon small cap Kotak emerging funds ICICI Pru blue chip Axis Mid Cap Axis Multi cap SBI Magnum Midcap Quant Mid Cap

Ans: Hello, you are on the right path. Keep the discipline and you will reach your goal as decided by you
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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Hardik

Hardik Parikh  | Answer  |Ask -

Tax, Mutual Fund Expert - Answered on Apr 07, 2023

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Hello Sir , My Self Manoj ,I am 40 years old a salaried person , and investing in MFs Since 5.5 years I have below current ongoing investments Aditya Birla FlexiCap Fund -- 7000 p.m.(SIP) HDFC Midcap Opportunities fund ---4000 p.m.(SIP) HDFC Hybrid Equity Fund ----2000 p.m.(SIP) DSP mid cap fund ---2000 p.m.(SIP) DSP Select Focus Fund ---2000 p.m.(SIP) DSP Small Cap Fund 3000 p.m.(SIP) Kotak Equity Opportunities Fund ---2000 p.m.(SIP) SBI Blue Chip Fund -----64000 (lumpsome) SBI Small cap fund ----2000 p.m.(SIP) Nippon India small cap fund ----2000 p.m.(SIP) Invesco Small cap fund ---1000 p.m.(SIP) Tata Small cap fund ----1000 p.m.(SIP) Mahindra Unnati Emerginf Business yojana ----2000 p.m.(SIP) Tata Balanced Advantage Fund -----50000 Mirae Asset Mid cap Fund ---2000 p.m.(SIP) ICICI Flexicap fund -----70000 (lumpsome) DSP Equity and Bond Fund---- 32000 (lumpsome) DSP Dynamic Asset Allocation Fund ----23000 (lumpsome) Sundaram Emerging small cap series1---17000 (lumpsome) Sundaram Services Fund---500 p.m.(SIP) Tata Flexicap Fund ----17400 (lumpsome) Baroda BNP Paribas Flexicap Fund ----50000 (lumpsome) Icici Blue chip Fund ---400 p.m.(SIP) Edelweiss small cap fund ----2000 p.m.(SIP) Axis Flexicap Fund ----19000 (lumpsome) Sundaram Small cap fund ----98000 (lumpsome) ICICI mnc fund---- 6000 (lumpsome) Axis mid cap fund ---500 p.m.(SIP) Canara Robeco small cap fund -----1000 p.m.(SIP) BOI small cap fund ----1000 p.m.(SIP) Aditya birla multicap fund----50000 (lumpsome) Kotak Multicap fund -----25000 (lumpsome) HDFC world indexes fund of fund---10000 (lumpsome) SBI Multicap fund ---1000 p.m.(SIP) PGIM India mid cap oppportunities fund ---1000 p.m.(SIP) Axis small cap fund ----500 p.m.(SIP) Edelweiss focused equity fund ---21000 (lumpsome) UTI flexicap fund ---3000 p.m.(SIP) Quant Large cap fund ---25000 (lumpsome) IDFC mid cap fund ---25000 (lumpsome) White Oak mid cap fund ---20000 (lumpsome) Sundaram Flexicap fund ---700 (lumpsome) Canara Robeco mid cap fund ---2000 p.m.(SIP) Mahindra small cap fund---2000 p.m.(SIP) Total amount of SIP is roughly around 45k per month, Since December 2016 till the date now my investment corpus in Mutual Fund has been now 30.5 lakhs , also i have 30k invested in direct stocks in Indian equity Market. I have 3 LIC policies and 1 term insurance policy of 1 crore cover,I have Bank FDs in nationalised bank for about 27 lakhs , and 3 lakhs in PPF My Goals are 1) 2 crores for my children's marriage and education 2) 2 crores for buying home 3) 4 crores for retirement life (after 10 years) In total i want to generate 8 crores in next 10 years. Kindly suggest if i would be able to achieve the goals in next 10 years,and changes if required any Regards Manoj
Ans: Hello Manoj,

It's great to see that you've been disciplined with your investments and have built a sizable corpus already. To assess if your current investments will help you achieve your goals of 8 crores in the next 10 years, let's take a closer look at your financial situation and goals.

Current Investments:
Mutual Funds: ~30.5 lakhs
Direct stocks: 30k
LIC policies and term insurance: Not considered for investment purposes
Bank FDs: 27 lakhs
PPF: 3 lakhs
Total: ~60.5 lakhs
Monthly SIP investments: ~45k
Now let's analyze your goals:

Children's marriage and education: 2 crores
Buying a home: 2 crores
Retirement life (in 10 years): 4 crores
Total: 8 crores
Assuming an average annual return of 12% on your equity investments, here's a rough projection of your portfolio's growth:

Current investments (60.5 lakhs) in 10 years: ~1.87 crores
Monthly SIPs (45k) in 10 years: ~1.05 crores
Total: ~2.92 crores
Based on this calculation, you would not reach your goal of 8 crores in the next 10 years. However, you can consider making some changes to improve your chances:

Reassess your goals: Consider if your goals are realistic and if there's any flexibility in the amounts or timelines.
Increase your SIP investments: As your salary increases, try to increase your SIP investments to accelerate your portfolio's growth.
Rebalance your portfolio: Regularly review your portfolio to ensure it's aligned with your risk appetite and financial goals. This may involve reducing the number of funds or shifting the allocation between equity and debt.
Monitor fund performance: Keep an eye on the performance of your funds and consider replacing underperforming ones.
Remember that financial planning is an ongoing process, and it's essential to periodically review and adjust your strategy. It's also a good idea to consult with a professional financial advisor to get personalized advice for your specific situation. While it might be challenging to achieve 8 crores within 10 years, these suggestions may help you get closer to your goals.

Best regards,

..Read more

Ramalingam

Ramalingam Kalirajan  |8934 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2024

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I am 48 yrs old l am investing 7k per month in MF from last 2 years. Rs 1000 each in DSP Multi Asset allocation fund. Canara robeco bluechip equity fund. Mirae asset large and midcap fund. Motilal oswal nifty next 50 index fund. Kotak Emerging equity fund. Quant smallcap fund. Parag parikh flexi cap fund. My horizon is 10 yrs.
Ans: That's a great start! Investing Rs. 7,000 monthly for the past 2 years shows discipline. Let's analyze your portfolio for your 10-year investment horizon.

Diversification is Key

Your portfolio has a good mix of fund types:

Multi-Asset: Provides diversification across asset classes for stability.
Large & Mid-Cap: Offers growth potential with established and growing companies.
Small-Cap: Carries more risk but has the potential for high returns.
Index Fund: Tracks a market index, offering market-related returns.
Actively Managed vs. Index Funds

While your Motilal Oswal Nifty Next 50 is an index fund, your other choices are likely actively managed. These funds have managers who try to outperform the market. This approach can be beneficial, but also carries inherent risks.

10-Year Timeframe Advantage

A 10-year horizon allows you to ride out market ups and downs. Equity funds, though volatile in the short term, have the potential for higher growth over the long term.

Points to Consider:

Overall Asset Allocation: Review the percentage allocation across each fund type to ensure it aligns with your risk tolerance.
Fund Performance: Track the performance of each fund and compare it to its benchmark.
Role of a CFP Professional

A Certified Financial Planner (CFP) professional can offer a more personalized assessment. They can help you:

Analyze Asset Allocation: Ensure your portfolio mix matches your risk tolerance and goals.
Review Fund Performance: Identify any underperforming funds and suggest adjustments.
Rebalance Regularly: Periodically rebalance your portfolio to maintain your desired asset allocation.
Remember:

Market performance can impact your returns. However, your diversified portfolio and long-term focus are positive steps.

Next Steps:

Consider consulting a CFP professional for a detailed portfolio review.
Monitor your fund performance and rebalance as needed.
Keep investing for the long term!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8934 Answers  |Ask -

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

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Hello sir, I am 48 yrs old, salaried, just stared to invest in MF. I selected the following funds for monthly SIP of rs 10000 each... 1. Nippon India large cap fund direct growth 2. Motilal Oswal midcap fund direct growth 3. Quant large & Mid cap fund direct growth Please advice all these choices are ok? Also pl advice two more funds to invest sip of rs 10000 each and likely to invest lumpsum of 2 lakhs every 6 months....expecting carpus of 3cr during my retirement age of 60yrs old. Advance thanks
Ans: You are 48 years old and have started investing in mutual funds. You plan to invest Rs 10,000 per month in three selected funds. Additionally, you are looking to invest Rs 10,000 per month in two more funds and a lump sum of Rs 2 lakhs every six months. Your goal is to accumulate a corpus of Rs 3 crore by the time you retire at age 60.

This is a critical time in your financial journey, and it's essential to make informed decisions. Your choices will significantly impact your retirement corpus.

Evaluating Your Current Fund Selections
Nippon India Large Cap Fund (Direct Growth): Large-cap funds offer stability and are generally less volatile. However, direct plans require you to manage the investments yourself. This might be challenging without regular market insights. It’s advisable to invest in regular plans through a Certified Financial Planner (CFP) who can provide ongoing guidance and support.

Motilal Oswal Midcap Fund (Direct Growth): Midcap funds can offer higher growth but come with increased risk. Again, managing direct funds on your own can be complex. A CFP can help you navigate market changes and ensure your investments align with your goals.

Quant Large & Mid Cap Fund (Direct Growth): This fund provides a balance between stability and growth. However, the same concerns apply here regarding the direct plan. A CFP can help you maximize returns while managing risk.

Disadvantages of Direct Funds
Direct funds have lower expense ratios, but they lack the professional advice and management that comes with regular funds. This can lead to missed opportunities or increased risks, especially if you lack the time or expertise to monitor your investments closely.

Investing through a CFP in regular funds ensures that your investments are regularly reviewed and rebalanced. This approach aligns your portfolio with your financial goals and risk tolerance.

Recommendations for Additional Funds
To complement your existing investments and achieve your retirement goal, consider the following:

Diversification: It's crucial to diversify your portfolio across different asset classes and fund categories. This strategy helps in managing risk and improving potential returns.

Balanced or Hybrid Funds: Consider adding a balanced or hybrid fund to your portfolio. These funds invest in both equity and debt instruments, offering a mix of growth and stability. They can be an excellent addition, especially as you approach retirement.

Flexi-Cap Funds: Flexi-cap funds invest across large, mid, and small-cap stocks. This flexibility allows the fund manager to shift investments based on market conditions, potentially enhancing returns while managing risk.

Regular Plans with CFP Guidance: As mentioned earlier, it's advisable to invest in regular plans with the guidance of a CFP. This will ensure that your investments are well-managed and aligned with your retirement goal.

Investing Lump Sum Every Six Months
Lump sum investments can be a great way to boost your corpus. However, investing the entire amount at once can expose you to market volatility. Here’s how to approach it:

Systematic Transfer Plan (STP): Instead of investing the lump sum directly into equity funds, consider using a Systematic Transfer Plan (STP). Start by investing the lump sum in a debt fund, and then gradually transfer it to your equity funds. This strategy helps in averaging the purchase cost and reduces the impact of market volatility.

Diversification Across Funds: Spread your lump sum investments across different funds rather than concentrating it in one. This approach reduces risk and increases the potential for growth.

Achieving Your Rs 3 Crore Retirement Goal
Your goal of accumulating Rs 3 crore by the time you turn 60 is achievable with disciplined investing and proper planning. Here’s how to ensure you stay on track:

Consistent SIPs: Continue with your SIPs diligently. The power of compounding will significantly enhance your corpus over time.

Regular Reviews: Schedule regular reviews of your portfolio with your CFP. This will help in making necessary adjustments based on market conditions and your evolving financial goals.

Adjusting Contributions: As your income grows, consider increasing your SIP amounts. Even a small increase can have a significant impact over the long term.

Focus on Long-Term Growth: Avoid the temptation to withdraw from your investments for short-term needs. Keep your focus on the long-term goal of building a substantial retirement corpus.

Final Insights
You have made a good start by choosing to invest in mutual funds. However, moving forward, it’s crucial to seek guidance from a Certified Financial Planner. This will ensure that your investments are aligned with your goals and are managed effectively.

By diversifying your portfolio, utilizing STPs for lump sum investments, and regularly reviewing your investments, you can achieve your goal of Rs 3 crore by the time you retire. Your commitment to consistent investing will pay off, securing a comfortable retirement for you.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8934 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 18, 2025

Asked by Anonymous - Jun 18, 2025
Money
Hi, I am 57+ years old with 2 yrs left for retirement from pvt firm. My take home salary is 2.15L after tax, corporate insurance and VPF deduction. I have accumulated 2cr in PF, 40 L in PPF, 20 L in FD, 40 L in retiral benefits when due. SIP of monthly10k in Equity MF started recently valued at only 5L. Own house, 40k loan monthly emi ending just before retirement. Self and family sufficiently insured . Monthly expense 1.8L . Eligible for 1L pension post retirement. I need to ensure a total retirement corpus of 5 cr by next 2 yrs. Fall in Single income bracket. Pls advise.
Ans: You have already taken some key steps in the right direction. Let me guide you towards achieving your Rs 5 crore corpus goal with a structured, 360-degree plan. This advice comes with your short 2-year time frame, income flow, and existing assets in mind.

Current Financial Snapshot – Assessment

You are already on a stable base:

Age: 57+ years, 2 years from retirement.

Monthly net salary: Rs 2.15 lakh.

Existing savings:

PF: Rs 2 crore.

PPF: Rs 40 lakh.

FD: Rs 20 lakh.

Retiral benefits (due at retirement): Rs 40 lakh.

MF SIP (started recently): Rs 5 lakh value, Rs 10,000/month.

EMI of Rs 40,000 ending just before retirement.

Own house – no rent burden.

Monthly expense: Rs 1.8 lakh.

Post-retirement pension: Rs 1 lakh/month.

Well-insured family and self.

This gives a very good head-start. You are already financially disciplined. Your lifestyle is well-planned. You are consistent in saving. But the target of Rs 5 crore in 2 years is slightly tight. So, every rupee now must work harder.

Goal Feasibility – Analysis of Rs 5 Crore Target

Let’s review if this goal is realistic:

Current accumulated wealth: Rs 3.05 crore (PF + PPF + FD + MF).

Retiral benefits in 2 years: Rs 40 lakh more.

Total likely corpus in 2 years without new investments: Rs 3.45 crore.

Gap to Rs 5 crore: Rs 1.55 crore.

Your income surplus is approx. Rs 35,000 per month (Rs 2.15 lakh income – Rs 1.8 lakh expense – Rs 40,000 EMI). EMI will stop in 2 years. That will free more cashflow, but not now. With just Rs 35,000/month savings, achieving Rs 1.55 crore extra in 2 years needs very high returns. That is not advisable near retirement.

Hence, you need:

Clear cost management.

Smarter savings redirection.

Enhanced allocation in high potential assets.

Realistic goal adjustment if needed.

Action Plan – Smart Steps for Next 2 Years

Let us now break down what to do.

1. Re-align Your Monthly Budget
Current surplus is Rs 35,000/month.

Cut monthly lifestyle spend from Rs 1.8 lakh to Rs 1.5 lakh.

Free up Rs 65,000+ per month for investments.

This increase is key to reach your Rs 5 crore goal.

2. Increase Equity Exposure Strategically
You started SIP in equity MF. Good beginning.

Rs 10,000/month is very low for your goal.

Increase it to Rs 50,000/month if possible.

Invest in well-managed diversified mutual funds.

Use regular plans through a Certified Financial Planner.

Avoid direct plans. They offer no guidance or risk management.

Regular plans allow you access to a certified MFD + CFP support.

This handholding is vital at your stage.

Disadvantage of Direct Plans:

No portfolio review.

No exit strategy support.

No emotional handholding in market volatility.

You might choose wrong funds.

Saving 0.5%-1% fee is not worth big risk at this stage.

Instead, pay a small trail fee and get full guidance. That is safer and more profitable in the long run.

3. Lumpsum Allocation from FD + PPF
PPF and PF are debt-heavy.

FD returns are taxable and low.

You need growth assets now.

Action:

Move Rs 10 lakh from FD into 2 lumpsum tranches of Rs 5 lakh each.

Use them in equity mutual funds via Systematic Transfer Plan (STP).

STP gives gradual market exposure.

This protects you from sudden market crashes.

PPF: Continue till maturity. Don’t break. It's safe and tax-free.

FD: Don’t increase allocation. Use only as emergency buffer.

4. Retiral Benefits to Be Invested Wisely
Rs 40 lakh expected on retirement.

Don’t keep it in savings account or FD.

Split into 2 parts:

Rs 15 lakh into hybrid or balanced mutual funds.

Rs 25 lakh in short duration debt mutual funds for 2–4 year needs.

Use mutual funds, not bank products.

Bank products give lower return and are taxable. Mutual funds give better growth and flexibility.

5. Monthly SIP Discipline and Staggering
Increase SIP gradually each quarter if possible.

Target Rs 75,000–80,000/month within 12 months.

Use diversified equity mutual funds across large, mid and flexi-cap categories.

Avoid sector funds or thematic funds. Too risky.

Avoid index funds:

No active management.

Cannot avoid loss in falling markets.

Underperforms in sideways or volatile markets.

Lack flexibility and safety in retirement stage.

Advantage of actively managed funds:

Can shift to cash or debt when needed.

Expertly curated by experienced fund managers.

Less risk in volatile times.

This is important for your risk profile.

Post Retirement Strategy – Manage Withdrawal and Income Smartly

After retirement:

Monthly pension: Rs 1 lakh.

Your current monthly need: Rs 1.8 lakh.

Monthly gap: Rs 80,000.

So, your corpus should generate Rs 80,000/month = Rs 9.6 lakh/year.

Step-by-step plan:

Use debt and hybrid funds to generate fixed withdrawals.

Use equity fund growth for long-term needs.

Keep 1 year of expenses in ultra short-term fund.

Replenish it every 12 months from equity/debt growth.

Don’t withdraw from equity funds in loss phase.

Use buffer funds instead. This avoids selling in down markets.

Tax Impact Planning – Avoid Surprises

Equity mutual fund long term capital gain (LTCG) over Rs 1.25 lakh is taxed at 12.5%.

Short term gains (STCG) taxed at 20%.

Debt mutual funds taxed as per your slab.

Plan redemptions carefully with your CFP.

Spread out withdrawals to reduce tax burden.

Avoid fixed deposits for income. They are taxed at your slab rate.

Emergency and Contingency Plan

Keep Rs 10 lakh in liquid fund or ultra-short duration debt fund.

This is for health emergency or family needs.

Don’t touch your retirement corpus for this.

Emotional and Family Considerations

Talk to spouse and family about spending reduction for next 2 years.

Avoid lifestyle upgrades.

No unnecessary gifting or lending.

Involve family in investment discussions.

This helps them manage better later.

What Not to Do Now

Don’t invest in real estate. It lacks liquidity.

Don’t buy new insurance policies.

Don’t invest in NPS or ULIPs now.

Don’t go for annuities. Poor returns and no growth.

Don’t keep big cash in bank FDs.

Finally – Key Insights and Recommendations

Rs 5 crore goal is possible with smart moves.

Cut spending. Increase savings.

Use equity mutual funds more.

Avoid FDs and other low-yield products.

Work closely with a Certified Financial Planner.

Avoid emotional investing decisions.

Keep health insurance active always.

Build a withdrawal strategy from day one after retirement.

Revisit and re-balance portfolio every 6 months.

Protect capital. Grow smartly. Spend wisely.

Your financial discipline is already strong. With better strategy, the final stretch will be successful.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

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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