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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 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

Asked by Anonymous - Jul 17, 2025Hindi

Hello sir, I am 46 year old IT employee, having two kids (14 yrs old girl and 5 yrs old boy), earning 2.5 lakh take home salary per month. Currently I have around 29 lakh in stocks, 19 lakh in MF, 50 lakh in FD, 5 lakh in NPS, around 40 lakh in PF and will get 30 lakh from LIC on maturity in 2035. I live in my own apartment and have my own car (both are fully paid and loan free). I have around 7 lakh in SSY account of my daughter. My current expenses is around 1 lakh per month for daily routine, 30k per month in MF SIP, 30k per month in PF, 1.5 lakh per year in NPS, 40k per year in LIC, around 50K per month in education OD my kids. I have 50 lakh group term insurance and 8 lakh group health insurance cover from my employer. I am planning to increase 10% topup in SIP every year till I retire. Please suggest if I can retire at 55 yrs of age with some decent corpus assuming life expectancy of 80 yrs. regards

Ans: You have built a solid base over the years.
Your financial discipline truly stands out.
It reflects clarity and thoughtful planning.

At 46, with 9 years to retirement, your goal is realistic.
But early retirement at 55 needs careful and balanced execution.
Let us review your current position and give a complete 360° strategy.

? Understand Your Retirement Goal Clearly

– You plan to retire at 55.
– That gives 9 more earning years.
– You need to live from 55 till 80.
– That’s 25 retirement years without salary.

– So your investments must create enough income.
– It should handle inflation and emergencies too.
– You need to cover regular lifestyle and healthcare also.

– A structured retirement corpus is required.
– Current planning looks promising.
– But some parts need refinement and tightening.

? Evaluate Your Current Investment Position

– Rs.29 lakh is in stocks.
– Rs.19 lakh is in mutual funds.
– Rs.50 lakh is in FDs.
– Rs.5 lakh is in NPS.
– Rs.40 lakh in PF.
– Rs.30 lakh expected from LIC in 2035.

– Total corpus today is strong.
– Around Rs.1.73 crore is already parked.
– Plus, SIPs and PF contributions are ongoing.
– SSY and LIC maturity are future inflows.

– Still, active cash flow planning is needed.
– Growth and liquidity must be balanced well.

? Asset Allocation Requires Rebalancing

– Rs.50 lakh in FD is too much.
– FD returns are low and taxable.
– It won’t beat inflation in long run.

– You are still 9 years from retirement.
– Equity exposure should be higher.

– Your equity+mutual fund holding is around Rs.48 lakh.
– That is less than 50% of your net assets.

– Increase allocation to mutual funds slowly.
– Shift from FDs to equity hybrid or large-cap mutual funds.
– Do it in a phased way, not all at once.

– FDs can be kept for short-term needs only.
– Don’t make it main retirement tool.

? SIPs Are On Right Track – Add More Growth

– Rs.30k SIP per month is a good start.
– You plan to increase it by 10% yearly.
– That is very healthy and effective.

– Ensure you invest in actively managed mutual funds.
– Avoid index funds and ETFs.
– Index funds just follow market.
– They do not protect in downturns.

– Actively managed funds try to beat the index.
– Good fund managers make tactical shifts.
– This boosts long-term returns.

– Don’t choose direct plans.
– Direct plans lack guidance and rebalancing support.

– Regular plans via MFD with CFP give better monitoring.
– They offer behavioural coaching and re-alignment.

? LIC Policy Should Be Reassessed

– You will receive Rs.30 lakh in 2035.
– Check if this is a traditional endowment plan.
– If yes, then return is usually very low.

– These plans offer poor wealth creation.
– They are better replaced by mutual funds.

– Since maturity is near and payout is confirmed,
you may hold it till maturity.
– But don’t buy new LIC or ULIP plans.
– Keep investment and insurance separate.

? Children’s Education Needs Separate Planning

– Rs.50k monthly in kids' education loan is a key expense.
– This must be closed before retirement.

– You have SSY for your daughter.
– That is a good move for secured growth.

– However, plan higher education for both kids separately.
– Don’t mix this with retirement funds.

– Start parallel SIPs for children’s education.
– Use balanced and hybrid equity mutual funds.

– Track each child’s goal separately.
– You should not withdraw from retirement corpus for education.

? NPS Allocation Can Be Reviewed

– You invest Rs.1.5 lakh yearly in NPS.
– This gives tax benefit under Section 80CCD.
– However, NPS has restrictions at withdrawal.

– Partial amount is taxable on maturity.
– It also forces partial annuity purchase.

– You can continue investing for tax benefit.
– But don’t rely fully on NPS for retirement needs.
– Keep main focus on mutual funds and PF.

? Term and Medical Insurance Need Strengthening

– You have Rs.50 lakh group term cover.
– Also Rs.8 lakh group health insurance.
– These are offered by employer.

– But both are linked to your job.
– They stop once you retire or change jobs.

– You need independent term insurance till age 65–70.
– Consider Rs.1 crore term plan for your family’s safety.

– Also take separate family health insurance.
– Choose Rs.10–15 lakh base plan.
– Add top-up if needed.

– Health costs rise rapidly after 50.
– Don’t depend on group cover only.

? Emergency Fund Must Be Isolated

– Your expenses are Rs.1 lakh monthly.
– Build emergency fund of Rs.6–12 lakh.

– Use liquid or ultra-short debt mutual funds.
– Don’t park in savings account or FD.

– This gives better post-tax returns.
– Also gives liquidity when needed.

– Emergency fund is safety cushion.
– It should be kept separate from investments.

? PF Corpus Needs Goal Mapping

– Rs.40 lakh in PF is a strong base.
– You are also adding Rs.30k monthly.

– PF is a good tool for retirement.
– Safe and tax-free growth.

– Keep this corpus for post-retirement fixed income.
– Don’t use for short-term needs or loans.

– PF returns may drop in future.
– So, don’t depend only on PF.
– Supplement with equity mutual funds.

? Goal-Based Planning is Essential

– Retirement, children’s education, travel – all need planning.
– Create separate goals with timelines.

– Map every SIP to one goal.
– This keeps purpose and tracking clear.

– Don’t dip into long-term funds for short goals.
– That breaks compounding and weakens growth.

– Keep retirement fund untouched till 55.
– Rebalance it closer to retirement.

? Tax Efficiency in Future Withdrawals

– New mutual fund tax rules are important.
– Equity LTCG above Rs.1.25 lakh taxed at 12.5%.
– STCG is taxed at 20%.

– For debt funds, gains taxed as per income slab.

– Plan redemptions smartly after retirement.
– Spread them over years to lower tax impact.

– Take help from Certified Financial Planner for withdrawal strategy.
– Tax efficiency improves retirement sustainability.

? Real Estate and Gold Are Not Required

– You already have your house.
– There is no need for more real estate.

– Property gives low rental yield.
– It has poor liquidity and high tax on sale.

– Real estate is not ideal for early retirement.

– Gold is emotional and non-productive asset.
– It doesn’t create real long-term wealth.

– Limit gold to jewellery or small festive saving.
– Don’t count it in retirement planning.

? Finally

– You are in a strong financial position.
– Your income and savings discipline is inspiring.
– Rs.1.73 crore current investment gives a good start.
– But shift more from FD to mutual funds.
– Keep equity allocation higher till age 55.

– Increase SIP yearly and don’t skip any month.
– Don’t invest in index or direct plans.
– Use actively managed funds via CFP-MFD.
– Build separate SIPs for kids' education.
– Strengthen term and health insurance soon.
– Don’t rely only on employer cover.

– Keep emergency fund ready.
– Track progress every year.
– Rebalance funds at least once a year.
– You can retire at 55 with good preparation.
– Stay consistent, review, and adjust with time.
– Your goal is achievable with current momentum.

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

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