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Ramalingam Kalirajan  |4803 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 06, 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 31, 2024Hindi

Hello Sir,I am 47,wife,42,working,son 13 yrs. I have two house with loan emi 70K .have elderly parents. Have term plan of 50 lac each for both of us other than traditional insurance of roughly 20 lac.Both of us put together earning 3 lacs net in a month.we have 50 lacs in FD, PF and PPF put together 50 lacs , shares in PMS portfolio for 1.50 Cr. Equity MF portfolio of roughly 2.50 Cr . I plan to retire by 50 to take care of our sons studies while my wife will continue to work as she has favorable conditions at job than me .Would like to get a monthly pension of 2 lac at current inflation.How to plan.thanks

Ans: Retirement planning requires a detailed understanding of your financial situation and goals. Given your current financial details, let's create a strategy to ensure you achieve a monthly pension of Rs. 2 lakh adjusted for inflation.

Understanding Your Current Financial Situation
Income and Expenses

Combined Monthly Income: Rs. 3 lakh
EMI for House Loans: Rs. 70,000
Net Monthly Income After EMI: Rs. 2.3 lakh
Assets and Investments

Fixed Deposits (FD): Rs. 50 lakh
Provident Fund (PF) and Public Provident Fund (PPF): Rs. 50 lakh
Shares in Portfolio Management Services (PMS): Rs. 1.5 crore
Equity Mutual Fund (MF) Portfolio: Rs. 2.5 crore
Insurance Coverage

Term Plan: Rs. 50 lakh each for you and your wife
Traditional Insurance Policies: Total coverage of Rs. 20 lakh
Family Details

Wife's Age: 42, currently working with favorable job conditions
Son's Age: 13, will need funds for higher education
Elderly Parents: Potential healthcare expenses
Setting Your Retirement Goals
Target Monthly Pension

You desire a monthly pension of Rs. 2 lakh to maintain your lifestyle. To account for inflation, we need to adjust this amount for the future.

Estimating Required Corpus
Inflation Adjustment

Assuming an average inflation rate of 6% per annum, we calculate the future value of your monthly pension requirement.

Future Value Calculation:

Present Value (PV): Rs. 2 lakh
Rate of Inflation (r): 6% or 0.06
Number of Years (n): 3 years (from age 47 to 50)
Future Value (FV) = Rs. 2,00,000 × (1 + 0.06)^3
Future Value ≈ Rs. 2,00,000 × 1.191
Future Value ≈ Rs. 2,38,200

So, your monthly pension requirement at retirement will be approximately Rs. 2,38,200.

Corpus Required to Sustain Pension
Using the 4% withdrawal rule to determine the corpus required:

Annual Pension = Rs. 2,38,200 × 12
Annual Pension = Rs. 28,58,400

Required Corpus = Rs. 28,58,400 / 0.04
Required Corpus ≈ Rs. 7.15 crore

Current Assets and Additional Savings
Current Assets

Total Current Investments:
FD + PF + PPF + PMS + MF
Rs. 50 lakh + Rs. 50 lakh + Rs. 1.5 crore + Rs. 2.5 crore
= Rs. 5 crore
Future Savings Until Retirement

Assuming you save Rs. 1 lakh per month after other expenses, your total savings will be:

Monthly Savings × Number of Months
Rs. 1,00,000 × 36
= Rs. 36 lakh

Total Corpus by Retirement

Adding current assets and future savings:
Rs. 5 crore + Rs. 36 lakh
= Rs. 5.36 crore

Analyzing the Gap
Required Corpus: Rs. 7.15 crore

Projected Corpus by Retirement: Rs. 5.36 crore

Gap: Rs. 7.15 crore - Rs. 5.36 crore = Rs. 1.79 crore

Strategies to Bridge the Gap
Optimizing Investments

Reallocate Assets: Shift a portion of your FD and low-yield investments to higher growth options like equity mutual funds and PMS to potentially increase returns.

Maximize Equity Exposure: Given your three-year horizon, carefully increase exposure to equity to benefit from higher returns, but ensure to rebalance to reduce risk as you approach retirement.

Detailed Investment Strategies
Equity Mutual Funds

Investing in equity mutual funds offers significant growth potential. Focus on large-cap and diversified equity funds to manage risk while aiming for higher returns.

Hybrid Mutual Funds

Hybrid funds provide a balanced approach by combining equity and debt. They offer growth with reduced volatility, making them a stable addition to your portfolio.

Debt Mutual Funds

Debt funds are less volatile and provide stable returns. Include a mix of short-term and medium-term debt funds to preserve capital and generate regular income.

National Pension System (NPS)

Continue contributing to NPS, which offers tax benefits and market-linked returns. At retirement, use a portion for annuities and withdraw the rest to support your income needs.

Rebalancing Fixed Deposits
Consider moving a portion of your fixed deposits to mutual funds or other growth-oriented investments. FDs offer safety but lower returns compared to mutual funds.

Medical Insurance Coverage
Your medical insurance coverage of Rs. 1.5 crore is sufficient. Ensure it continues post-retirement and consider adding top-up plans if needed.

Regular Review and Rebalancing
Regularly review your investment portfolio and rebalance it to maintain the desired asset allocation. Adjust based on market conditions and your financial goals.

Risk Management
Emergency Fund

Maintain an emergency fund equivalent to 6-12 months of expenses to ensure liquidity for unforeseen expenses.


Diversify your investments across asset classes to reduce risk and avoid putting all your money in one type of investment.

Monitoring Expenses
Track Expenses

Keep track of your expenses and adjust your budget if needed to ensure you stay within your retirement income.

Manage Lifestyle Inflation

Be cautious of lifestyle inflation. As your income grows, avoid unnecessary expenses that can erode your savings.

Tax Planning
Tax-Efficient Withdrawals

Plan your withdrawals to minimize tax liability by using systematic withdrawal plans (SWP) from mutual funds for regular income.

Utilize Tax Benefits

Take advantage of tax-saving investments under Section 80C, 80D, and other applicable sections to reduce your taxable income.

Retirement planning requires careful analysis and strategy. With your current savings and planned investments, you’re on the right track. By optimizing your investments, increasing savings, and managing expenses, you can build a sufficient retirement corpus.

Ensure regular review and rebalancing of your portfolio. Work with a Certified Financial Planner (CFP) to tailor your strategy and achieve your retirement goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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 Kalirajan  |4803 Answers  |Ask -

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

Asked by Anonymous - Apr 14, 2024Hindi
Hello sir, I am 42 years old and want to retire by age of 55. My current savings is 303L in EPF. 307L in equity, 9.6L in nps. Investment I does as follows 1. Epf - 45000 by employer and same contribution by me as well which combined around 90000/- 2. 27000/- monthly sip , Nippon small cap 6000, axis small cap 6000, quant infrastructure fund 6000/-, quant small cap 6000/-l miarae asset blue chi large cap 3000/- all started very soon having corpus of 4L as of today. 3. Investing 25000/- in nps monthly. 4. Around 50k monthly in equity I have a liability of 50L home loan which I have planned to get rid off by 2028. I have another home loan which will be closed by end of 2025. I have a daughter which is doing CA and for marriage it will be required around 1 cr. I have a son who are going to persue medical which will cost me 50-75L. How I can plan my retirement to get atleast 3L monthly by age of 55. My current monthly take home salary is 3L around.
Ans: Given your goal to retire by 55 with a monthly income of ?3L, you have a comprehensive plan with a mix of investments and savings. Here's a suggested strategy:

EPF: Continue the contribution as it offers tax benefits and stable returns.

SIPs: Your SIPs in small and large-cap funds are good for growth. Consider adding a diversified equity fund for balance. Monitor and rebalance annually.

NPS: Since you're investing ?25,000 monthly, ensure you choose the auto-choice option for a balanced allocation between equity, corporate bonds, and government securities.

Home Loans: Prioritize closing the higher interest rate loan first while maintaining EMIs for both.

Children’s Education and Marriage: Start separate SIPs or investments earmarked for these goals to reach 1 cr for your daughter's marriage and 50-75L for your son's medical studies.

Emergency Fund: Maintain an emergency fund of at least 6 months' expenses.

Retirement Corpus: Aim to build a corpus that can generate ?3L/month. Based on a conservative estimate, a corpus of around ?6-7 crores by 55 might be needed. Regularly review and adjust your investments to align with this target.

Professional Advice: Consult a financial advisor to fine-tune your plan and ensure you're on track to meet your retirement and other financial goals.

..Read more


Ramalingam Kalirajan  |4803 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Asked by Anonymous - May 17, 2024Hindi
I'm 33 years old, I get 55k in hand and monthly liability of 25k home loan emi, having 8 lac in pf, 10.5 lac in ppf, investing 50k yearly in nps, have atal pension, not married but planning to get married in 1-2 years. How do I plan gor retirement so that i get 2 lac monthly pension in 2050. I'm skeptical about mutual fund but if i must i would invest only in nifty 50 index mf sip. Please suggest.
Ans: Given your current financial situation and retirement goal of receiving a monthly pension of Rs. 2 lakh in 2050, it's important to create a comprehensive retirement plan that accounts for your income, expenses, existing investments, and future needs. Here's a suggested plan to help you achieve your retirement goal:

Assess Current Financial Position
Income and Expenses: You have a monthly income of Rs. 55,000 and a monthly liability of Rs. 25,000 towards your home loan EMI. Ensure you have a budget in place to manage your expenses effectively.

Existing Investments:

Rs. 8 lakh in PF
Rs. 10.5 lakh in PPF
Investing Rs. 50,000 yearly in NPS
Atal Pension Yojana (APY)
Retirement Planning Strategy
Calculate Retirement Corpus: Determine the corpus required to generate a monthly pension of Rs. 2 lakh in 2050. Consider factors such as inflation, life expectancy, and post-retirement expenses.

Investment Strategy:

Continue contributing to your PF, PPF, NPS, and APY to build a retirement corpus.
Since you're skeptical about mutual funds, consider investing in Nifty 50 Index Mutual Fund SIPs for equity exposure. These funds offer diversification and long-term growth potential.
Allocate a portion of your investments to debt instruments like PPF and NPS for stability and fixed income.
Review and Adjust Investments:

Regularly review your investment portfolio and adjust your asset allocation based on changing market conditions, risk tolerance, and retirement goals.
Consider increasing your investment contributions over time to accelerate wealth accumulation.
Plan for Marriage Expenses:

Factor in the expenses related to your upcoming marriage when creating your financial plan. Allocate funds accordingly and adjust your savings and investment strategy as needed.
Retirement Income Streams
PF and PPF: Utilize the accumulated corpus in your PF and PPF accounts to generate a steady income stream during retirement. Consider options like annuity plans or systematic withdrawals.

NPS: Continue contributing to NPS to build a substantial retirement corpus. Opt for a suitable pension plan within NPS that offers regular pension payments post-retirement.

Atal Pension Yojana (APY): APY provides a guaranteed pension amount based on your contribution and age. Ensure you contribute regularly to maximize the benefits under the scheme.

Additional Income Sources: Explore additional income sources such as rental income, part-time employment, or freelance opportunities to supplement your retirement income.

Risk Management and Contingency Planning
Insurance Coverage: Ensure you have adequate health insurance and life insurance coverage to protect yourself and your dependents from unforeseen events.

Emergency Fund: Maintain an emergency fund equivalent to 3-6 months' worth of expenses to cover any unexpected expenses or financial emergencies.

Regular Monitoring and Review
Annual Review: Conduct an annual review of your retirement plan to track your progress towards your goals, adjust your investment strategy, and make any necessary changes.

Seek Professional Advice: Consider consulting with a Certified Financial Planner (CFP) who can provide personalized guidance and help you optimize your retirement plan based on your unique financial situation and goals.

By following this retirement planning strategy and staying disciplined with your savings and investments, you can work towards achieving your goal of receiving a monthly pension of Rs. 2 lakh in 2050 while also ensuring financial security for yourself and your future spouse.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |4803 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 22, 2024

Asked by Anonymous - May 17, 2024Hindi
Hi sir, I am 41 years old with 48 laks in pf, 33 lakhs in ppf, 8 lakhs in NPS and around 25 lakh of SGB. I invest 22000/mth in NPS.I have an appartment bought in 2011 for 55 lakh and 1800sqft plot bought in 2022 for 65 lakh, both in Blr. Currently earning 2.5 lakh/month. If i get retire by age of 50 how much corpus i need for 1lakh/mth pension. I have 2 kids age 9 and 4 and need to plan for their education as well. Please suggest a financial planner as well.
Ans: Planning for early retirement and ensuring a secure financial future for your children is a commendable goal. At 41, with a solid financial base and a clear objective, you are well-positioned to achieve your retirement dreams. Let's explore how you can build a retirement corpus that provides a comfortable pension and plan for your children's education effectively.

Assessing Your Current Financial Situation
Existing Investments

You have a diverse portfolio:

Provident Fund (PF): Rs. 48 lakhs
Public Provident Fund (PPF): Rs. 33 lakhs
National Pension System (NPS): Rs. 8 lakhs with a monthly contribution of Rs. 22,000
Sovereign Gold Bonds (SGB): Rs. 25 lakhs
Real Estate: Apartment valued at Rs. 55 lakhs and a plot worth Rs. 65 lakhs in Bangalore
Income and Savings

Your current monthly income is Rs. 2.5 lakhs, allowing you to save and invest a significant portion. This is a strong foundation for building a robust retirement corpus.

Determining Retirement Corpus
Monthly Pension Requirement

To achieve a monthly pension of Rs. 1 lakh post-retirement, consider the following:

Inflation Rate: Assume an average inflation rate of 6% per year.
Life Expectancy: Plan for at least 30 years post-retirement.
Withdrawal Rate: A safe withdrawal rate is typically 4% per year.
Corpus Calculation

Using the 4% rule, to generate Rs. 1 lakh per month (Rs. 12 lakhs per year): Rs 3 Crores

Building Your Retirement Corpus
Current Savings and Investments

Your total current investments amount to Rs. 1.14 crores (excluding real estate). This forms a substantial part of your retirement corpus.

Strategic Investment Plan

To bridge the gap and reach your target corpus, you need to strategically invest in growth-oriented instruments.

Equity Mutual Funds
Equity mutual funds are an excellent vehicle for long-term wealth creation due to their potential for high returns. Given your high risk appetite, a significant portion of your portfolio should be in equity mutual funds.

Benefits of Actively Managed Funds
Actively managed funds, overseen by experienced fund managers, aim to outperform the market. They offer potential for higher returns compared to index funds, which merely track market indices. Here are some key benefits:

Professional Management: Expert fund managers make informed decisions.
Flexibility: They can adapt to market conditions.
Potential for Outperformance: They aim to beat the market, not just match it.
Diversify your investments across different asset classes to mitigate risk:

Equities: High growth potential.
Debt Funds: Provide stability and reduce overall portfolio risk.
Gold: Acts as a hedge against inflation.
Disadvantages of Direct Funds
While direct mutual funds have lower expense ratios, they lack the guidance and expertise that come with investing through a Mutual Fund Distributor (MFD) with Certified Financial Planner (CFP) credentials. Here are the disadvantages:

Lack of Professional Guidance: Direct funds require you to make investment decisions on your own.
Complexity: Selecting the right funds and maintaining an optimal portfolio requires expertise.
Time-Consuming: Managing investments without professional help can be time-consuming and stressful.
Suggested Investment Strategy
Equity Mutual Funds

Allocate a significant portion of your SIPs to equity mutual funds, focusing on large-cap, mid-cap, and multi-cap funds. Actively managed funds can help achieve higher returns.

Debt Funds

Invest in debt mutual funds for stability and to balance the risk. These funds are less volatile and provide steady returns.


Maintain a portion of your investment in gold, preferably through Sovereign Gold Bonds (SGBs) for their added benefits like interest earnings and tax advantages.

Monthly Savings Allocation
Given your ability to save Rs. 40,000 per month, here's a suggested allocation:

Equity Mutual Funds: Rs. 25,000
Debt Funds: Rs. 10,000
Gold/SGB: Rs. 5,000
Children's Education Planning
Investment for Education

Start dedicated investments for your children's education. Consider child-specific mutual funds that focus on long-term growth.

Importance of SIPs
Systematic Investment Plans (SIPs) are a disciplined way to invest regularly. They help in averaging the cost and compounding returns over time.

Evaluating Your Real Estate Holdings
While real estate can be a good investment, it's not as liquid as other investment options. Consider the future potential and liquidity needs before relying heavily on real estate for retirement funding.

Reviewing Your Crypto Investments
Cryptocurrency is highly volatile and speculative. It’s advisable to limit exposure to such high-risk investments. Consider reallocating some of these funds to more stable investments like mutual funds or gold.

Role of NPS in Retirement Planning
The NPS is a valuable tool for retirement planning. Continue your contributions as it offers tax benefits and helps build a retirement corpus.

To achieve your goal of early retirement and a comfortable pension, a balanced and well-diversified portfolio is essential. Focus on equity mutual funds for growth, debt funds for stability, and gold for hedging against inflation. Regularly review and adjust your portfolio to stay aligned with your goals.

Best Regards
K. Ramalingam, MBA, CFP

Chief Financial Planner


..Read more


Ramalingam Kalirajan  |4803 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 30, 2024

hello sir, Prem here. I am 60yrs. need the financial planning. Going to retire. I have NPS of 55 lakh, FD of 1.2 Cr, PPF 15lakh, MF 35lakh. Now need the pension 1.5lakh/month. Own house. no loan. all children settled. What to do and how to plan ahead. Please guide step by step. regards
Ans: Dear Prem,

Congratulations on reaching this significant milestone in your life. Retirement is a time to enjoy the fruits of your labor and ensure financial stability. You have a substantial portfolio, and with careful planning, you can achieve your goal of a Rs. 1.5 lakh monthly pension. Here’s a step-by-step guide to help you plan ahead.

Assessing Your Current Financial Position
You have a well-diversified portfolio:

NPS: Rs. 55 lakh
Fixed Deposit: Rs. 1.2 crore
PPF: Rs. 15 lakh
Mutual Funds: Rs. 35 lakh
This gives you a total corpus of Rs. 2.25 crore.

Step 1: Evaluate Your Monthly Expenses and Goals
Before we plan the investment, it’s crucial to understand your monthly expenses and financial goals.

Monthly Pension Requirement: Rs. 1.5 lakh
Other Goals: Healthcare, travel, and emergencies
Step 2: Creating an Income Stream
Systematic Withdrawal Plan (SWP)
SWP from mutual funds can provide a regular income while keeping your investment growing. Here’s how it works:

Select the Mutual Funds: Choose funds that have a good track record and match your risk profile.
Set the Withdrawal Amount: Decide on a fixed amount to withdraw monthly.
Benefit: This method allows you to get regular income while the remaining funds continue to grow.
Annuity from NPS
NPS offers an annuity option, which can provide a steady income. You can allocate a portion of your NPS corpus to an annuity plan. Here’s how:

Use 40% of NPS Corpus: Use at least 40% of your NPS corpus to buy an annuity.
Choose the Right Annuity Plan: Select an annuity plan that offers a lifetime payout.
Benefits: An annuity ensures a guaranteed monthly income for life.
Fixed Deposit and PPF Interest
Fixed Deposit Interest: The interest from your FD can provide a regular income. Reinvest the principal amount at maturity to continue receiving interest.
PPF Withdrawals: After retirement, you can start withdrawing from your PPF account as needed.
Step 3: Allocating Your Corpus
Diversify Your Investments
Debt Instruments: Allocate a portion of your corpus to debt instruments for stable and secure returns. This includes fixed deposits, PPF, and debt mutual funds.
Equity Instruments: To keep up with inflation, maintain a portion in equity mutual funds. This helps in growing your corpus over time.
Example Allocation
Equity Mutual Funds: Rs. 35 lakh (for growth and SWP)
Debt Mutual Funds: Rs. 20 lakh (for stability and SWP)
Fixed Deposits: Rs. 1 crore (for regular interest income)
PPF: Rs. 15 lakh (for secure returns)
NPS Annuity: Rs. 22 lakh (for guaranteed monthly income)
Step 4: Planning for Healthcare and Emergencies
Health Insurance
Ensure you have adequate health insurance to cover medical expenses. This will protect your savings from being depleted due to healthcare costs.

Emergency Fund
Maintain an emergency fund of at least 6-12 months of your expenses. This should be easily accessible and invested in liquid funds or a savings account.

Step 5: Regularly Review and Adjust Your Plan
Your financial needs and market conditions will change over time. Regularly review your investment plan and adjust it as needed. Here’s how:

Annual Reviews: Conduct annual reviews to assess the performance of your investments.
Rebalance Portfolio: Rebalance your portfolio to maintain the desired asset allocation.
Consult a Certified Financial Planner: A CFP can provide personalized advice and help you create a customized roadmap with specific analysis and calculations.
Benefits of Consulting a Certified Financial Planner
A CFP can help you:

Analyze Your Financial Situation: Assess your current financial status and future needs.
Create a Customized Plan: Develop a tailored plan that aligns with your goals.
Monitor and Adjust: Regularly monitor your investments and make adjustments as needed.
Provide Peace of Mind: Ensure that your financial future is secure and well-planned.
By following these steps, you can create a solid financial plan for your retirement. Diversify your investments, utilize SWP and annuities, and regularly review your plan. Consulting a Certified Financial Planner can provide additional guidance and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more

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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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