Hello, I am 40 yrs old. My savings balance is 10 crore with a CAGR of approx. 6%. My monthly expenses are no more than 2 lacs, mostly spent on travel, food, and rent. I have Zero debt and no other financial obligations or commitments. I rent and...

Ans: Your clarity of thought is very good.
You have no debt.
You have good savings.
And you understand your expenses well.
This gives you a great starting point.

Let us now go into every aspect deeply.
You want peace of mind.
You want financial security.
We will look at every angle to build that for you.

? Current Assets and Liabilities

– Mutual funds: Rs. 60 lakh.
– No loans or EMIs.
– One house fully paid off.
– Properties worth Rs. 4 crore.
– Health insurance cover: Rs. 10 lakh.
– Term insurance cover: Rs. 50 lakh.
– Medical condition: Chronic kidney issue.
– Monthly expenses: Rs. 30,000 approx.
– Yearly lifestyle expense: Rs. 5–6 lakh.

Your asset base is quite strong.
Your lifestyle needs are limited.
This makes early retirement a possible goal.
But we must plan it very carefully.

? Your Real Retirement Goal

You are 38 years old now.
You want to retire by 40.
That means financial freedom for 40+ years.
From age 40 to 85 or 90.
That’s around 45–50 years of no active income.

You must prepare for:
– Regular income.
– Inflation.
– Medical expenses.
– Unplanned needs.
– Market ups and downs.

With that clarity, we’ll plan every element.

? Dependence on Real Estate

You wish to sell Rs. 4 crore of property.
You want to reinvest in rent-yielding properties.
But rental yield in India is very low.

Even at 4% rental yield:
– Rs. 4 crore gives only Rs. 13.3 lakh per year.
– That is around Rs. 1.1 lakh per month.
– This rent is not fixed.
– There will be vacancy periods.
– There will be maintenance costs.
– Rental laws are complex.
– Property is not liquid in emergencies.

Also note:
– Real estate does not give compounding growth.
– Real estate does not beat inflation reliably.
– Property income is taxable fully.
– Reinvestment also involves stamp duty, GST and legal fees.

Instead of property, we need a more fluid and tax-efficient plan.

? Better Way to Generate Regular Income

You already have Rs. 60 lakh in mutual funds.
Mutual funds grow faster than rent.
They are more flexible.
They offer compounding growth.
They give better liquidity.

You may follow this route:
– Divide your corpus into two buckets.
– Bucket 1: Emergency + short-term (liquid + arbitrage + conservative hybrid funds).
– Bucket 2: Long-term growth (equity + balanced advantage + large & midcap funds).

From year 1 to 5:
– Use Bucket 1 for monthly income.
– Use SWP (Systematic Withdrawal Plan) to get Rs. 50,000 monthly.
– Adjust yearly for inflation.

From year 6 onward:
– Start withdrawing from Bucket 2 (which grew meanwhile).
– This plan can last 40+ years.
– Keep reviewing funds with a Certified Financial Planner.

This approach is safer than property.
Also better tax-wise and return-wise.

? Your Health Insurance Gap

You already have Rs. 10 lakh health insurance.
But your kidney issue limits new policy chances.

Still, you can do these:
– Check if your insurer offers top-up policy on existing cover.
– Check if your existing policy allows critical illness add-on.
– Start building your own “Health Corpus” in mutual funds.
– Keep Rs. 15–20 lakh for future medical use.
– This fund should be in short duration debt and hybrid funds.
– Do not use it for any other purpose.

You must keep upgrading your medical buffer.
This protects your peace during retirement.

? Your Term Insurance and Estate Plan

You have Rs. 50 lakh term cover.
But you don’t have dependents.
You don’t want kids.

So term insurance is not really needed now.
Let it lapse at the end of the term.
Instead, make a clear will.
Write down who will get your assets.
Nominate someone responsible.
Also choose a healthcare nominee.
This avoids future legal hassles.

A good estate plan brings clarity and peace.

? Why Real Estate May Not Be Ideal

As said before, rental income looks attractive.
But it has many hidden costs.
Also rental returns are flat for years.

Let’s look at its limitations:
– Property values don’t grow fast now.
– Selling takes time and effort.
– Rent is taxable at slab rate.
– Property attracts maintenance, tax, legal issues.
– Natural disasters or tenant damage is risky.

Instead, mutual funds offer:
– Tax-efficiency.
– Diversification.
– Liquidity.
– Passive income via SWP.
– Better visibility of returns.
– Option to rebalance anytime.

You don’t need to block Rs. 4 crore into property.
Keep your assets fluid and productive.

? Asset Allocation Plan

You can retire with peace if assets are well divided.
This kind of allocation may suit you:

Rs. 30 lakh – Short-term & medical corpus (in hybrid & debt funds).

Rs. 1 crore – Long-term equity corpus (flexi cap, large & midcap, balanced advantage).

Rs. 30 lakh – Opportunity fund (in dynamic asset allocation + gold + global equity).

Rs. 50 lakh – Health buffer + SWP support (in hybrid conservative funds).

From age 40, start SWP from Rs. 60 lakh gradually.
The remaining grows for later years.
A Certified Financial Planner can optimise this plan yearly.

? Tax Planning and Capital Gains

Your mutual fund gains have new tax rules:
– LTCG above Rs. 1.25 lakh taxed at 12.5%.
– STCG taxed at 20%.
– Debt fund gains taxed as per your slab.

You must plan your withdrawals smartly.
Use funds where gains are under threshold.
Split redemptions smartly to minimise tax.

A Certified Financial Planner can guide this in detail.
Real estate has less tax flexibility.
Mutual funds give better post-tax returns.

? Mental Peace After Retirement

You are tired of work.
You want to relax, travel, and enjoy your hobbies.
You want no financial pressure.

That means your income must:
– Be predictable.
– Be tax-efficient.
– Grow with inflation.
– Be flexible.

Only actively managed mutual funds with SWP offer this.
Rent cannot match this.
Rental is fixed and does not adjust to inflation.
Also, if property is vacant, your income stops.

So build your post-retirement life around flexible income.
Mutual fund route is better for that.

? Lifestyle Budgeting

You spend Rs. 30,000 monthly.
Annual travel: Rs. 1–2 lakh.
Total: Rs. 5–6 lakh per year.

Even if we account for inflation:
– Rs. 8–10 lakh per year after 10 years.
– Plan to withdraw this much through SWP.
– Corpus must grow more than inflation.
– Fund selection and review is key here.

A Certified Financial Planner can review every year.
They keep your portfolio aligned to lifestyle changes.

Don’t depend on fixed income like rent alone.
You need flexible wealth.

? Avoiding Index Funds or Direct Funds

Some people may suggest index funds or direct mutual funds.
But those are not ideal for your case.

Here’s why:
– Index funds mirror the market blindly.
– They don’t protect downside.
– They give no active management.
– Direct funds give no advisor support.

In your case, you need safety, growth and personal advice.
So regular funds through a CFP or MFD is better.
You get expert support.
You get help in withdrawals, taxes, rebalancing.
You can’t afford mistakes during retirement.

Always go with actively managed regular plans.

? Emergency Planning

Keep Rs. 15–20 lakh in short-term funds.
Use only for medical, travel or family needs.
Do not mix with lifestyle fund.

Emergency planning is essential in your case.
It avoids stress and unwanted debt.
It gives peace during health issues.

? Portfolio Review and Execution

Once you retire, you must review portfolio every 6 months.
Funds may underperform.
You may need to switch assets.
Inflation may rise faster.
Tax rules may change.

A Certified Financial Planner tracks this for you.
They adjust things proactively.
That gives confidence for 40+ years of retired life.

? Final Insights

– You have a solid base to retire by 40.
– You don’t need rental properties.
– Sell your existing real estate slowly and smartly.
– Reinvest in mutual funds across buckets.
– Use SWP for monthly income from age 40.
– Plan Rs. 6–8 lakh yearly income for 45+ years.
– Avoid direct or index funds.
– Avoid annuities.
– Do not over-rely on rental income.
– Build a health corpus of Rs. 20 lakh.
– Keep Rs. 15 lakh as emergency fund.
– Let Rs. 1.5–2 crore grow in equity for long-term.
– Get help from a CFP every year.
– Your journey can be peaceful and safe.

Stay consistent.
Stay invested.
Stay reviewed.
Early retirement is not a dream.
It is a plan.

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