Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 20, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Purushottam on Aug 20, 2025Hindi

Hello, I am 41 year old . My monthly expenses are 3 lakhs a month. Corpus till date is 10 crores . Doing business . Can I retire by the age of 45 accumulating a total of 15 crores by that age . Have one home loan of 65 lakhs . Wife earning 1 lakh a month . Daughter in primary school. Want to live a lavish life and fulfill all the obligations like studies/marriage. Have own house . Considering the life expectancy till 85 and inflation etc. can I retire by 45 . Is the amount sufficient. How much can the corpus grow to realistically over a 20 year period with mutual funds ? If managed by a professional what is the realistic return expectation if I invest from age 45 to 65 along with doing SWL. I can invest the entire corpus after 45 as per the ask

Ans: You have built a strong base already. At 41, with Rs.10 crores corpus, Rs.3 lakhs monthly lifestyle, and an active business, you are ahead of many. Wanting to retire at 45 with Rs.15 crores corpus is a bold but possible plan if handled well. Let me assess your situation step by step in a clear manner.

» Appreciation for your financial discipline
– You have saved Rs.10 crores by 41. That is outstanding.
– Your lifestyle cost is high, but still proportionate to your wealth.
– Having a house already makes your retirement plan easier.
– Wife earning Rs.1 lakh adds stability.
– Daughter’s future is being thought of early. This is wise.

» Current financial picture
– Age: 41 years
– Corpus: Rs.10 crores
– Monthly expenses: Rs.3 lakhs (Rs.36 lakhs per year)
– Target corpus at 45: Rs.15 crores
– Home loan: Rs.65 lakhs
– Other income: Wife’s Rs.1 lakh per month

You are in a comfortable situation now. The key question is whether Rs.15 crores will sustain 40 years of lavish living, inflation, child’s future, and medical costs.

» Expenses and lifestyle assessment
– Current lifestyle is Rs.3 lakhs per month.
– With 6% inflation, expenses double every 12 years.
– At age 53, your cost may be Rs.6 lakhs per month.
– At age 65, cost may reach Rs.12 lakhs per month.
– At age 77, cost may touch Rs.24 lakhs per month.
– By age 85, lifestyle may need Rs.40 lakhs monthly.

This shows why retirement planning needs large wealth and growth investments.

» Obligation for daughter
– Primary schooling now, future costs are big.
– Higher education in India or abroad can cost Rs.50 lakhs to Rs.1.5 crores.
– Marriage can cost another Rs.50 lakhs to Rs.1 crore.
– Inflation will increase these costs if planned after 10-15 years.
– Your corpus must handle these obligations without stress.

» Home loan aspect
– Rs.65 lakhs home loan is small compared to Rs.10 crores corpus.
– You may continue EMI if interest rate is low.
– Or close the loan early for mental peace.
– This decision will not affect long-term retirement plan significantly.

» Retirement at 45 with Rs.15 crores
– Rs.15 crores at 45 seems strong at first look.
– But actual test is sustaining lifestyle for 40 years.
– Withdrawal rate will matter.
– Inflation will stress the money.
– Growth of corpus after retirement is critical.

If you retire at 45, you must manage money professionally for at least 40 years.

» Growth potential of corpus before 45
– You still have 4 years of active business income.
– Business profits can add to corpus.
– Mutual funds can give strong growth in this period.
– Realistically, with professional management, equity mutual funds may deliver 11% to 13% CAGR over long term.
– Debt funds may give 6% to 7%.
– With right mix, portfolio CAGR can be 9% to 11%.

So, your Rs.10 crores can reach Rs.15 crores by 45 if invested wisely and if business income adds more.

» Why not index funds
– Index funds are often promoted as low cost.
– But in India, markets are not fully efficient.
– Skilled fund managers beat index returns over long term.
– Actively managed funds give flexibility in market cycles.
– They also help with risk control and dynamic sector allocation.
– Hence, actively managed mutual funds are better choice than index funds.

» Post-retirement investment strategy
– At 45, Rs.15 crores corpus needs strong growth.
– You cannot keep all money in safe assets.
– Inflation will destroy value if growth is low.
– You need mix of equity mutual funds, debt mutual funds, and hybrid funds.
– Around 60% to 65% in equity funds for growth.
– 25% to 30% in debt for stability.
– 5% to 10% in liquid/short term funds for emergency.
– This mix should be reviewed regularly.

» SWP for lifestyle
– You will use Systematic Withdrawal Plan (SWP) for expenses.
– SWP allows fixed monthly cash flow.
– Equity and hybrid funds can generate long-term returns.
– Debt and liquid funds provide stability for withdrawals.
– Withdrawals must be planned to last till 85.

» Realistic return expectation post-retirement
– If managed by professional, 9% to 11% CAGR is possible for 20 years.
– This is after balancing equity and debt.
– Returns will not be linear. Some years higher, some lower.
– But over long horizon, compounding will help sustain lifestyle.

» Taxation aspects
– Equity mutual funds: LTCG above Rs.1.25 lakh taxed at 12.5%. STCG taxed at 20%.
– Debt mutual funds: Taxed as per income slab.
– Planning withdrawals and rebalancing can reduce tax impact.
– Professional handling ensures efficiency.

» Risk factors to watch
– Medical inflation can be higher than lifestyle inflation.
– Daughter’s overseas education may cost more than expected.
– Business exit value may be uncertain.
– Market volatility will affect short-term portfolio values.
– Wrong asset allocation may erode wealth.

» Why professional management matters
– Portfolio needs constant review.
– Asset allocation must be adjusted based on markets and age.
– Tax planning is required each year.
– Inflation-adjusted spending must be tracked.
– Without certified financial planner support, mistakes can be costly.

» Psychological aspects of retirement
– Retiring at 45 means 40 years of life without salary.
– Mental adjustment is needed.
– Many face fear of running out of money.
– Staying engaged in part-time or advisory role can reduce pressure.
– Corpus grows better if you delay large withdrawals.

» Wealth growth over 20 years
– If Rs.15 crores invested at 45, and grows at 10% CAGR, corpus can cross Rs.90 crores at 65 even after lifestyle withdrawals.
– If growth is lower, say 8%, it can still be Rs.50-60 crores.
– The key is not just growth but discipline in spending.
– Even with SWP, equity growth outpaces inflation.

» What can go wrong if not managed
– Keeping all corpus in safe deposits will destroy value.
– Inflation will eat wealth quickly.
– Overspending in early retirement may drain corpus.
– Chasing quick returns may risk capital.
– Lack of monitoring can disturb balance.

» Finally
– Your Rs.15 crores target at 45 is ambitious yet realistic.
– Corpus is enough if invested properly for 40 years.
– Equity mutual funds must be core of portfolio.
– Debt mutual funds provide support and liquidity.
– SWP can give you regular cash flow with tax efficiency.
– Daughter’s education and marriage can be met without stress.
– Medical cover and contingency fund must be strong.
– With professional handling, corpus can keep growing even during retirement.

You are in a powerful financial position. With right planning and discipline, you can retire at 45, live lavishly, support daughter, and still see wealth grow over decades.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.