Hello, i am aniket age 27 currently working with pvt company with monthly 35k salary and side income of around 40k,i have mutual fund lumpsum around 22 lakh and FD of 45 lakh and real estate 70 lakh,my question is i want to retire at 40 age so how i can plan accordingly to that?? I have no debt

Ans: You are 42 years old.

You are working in a Middle Eastern country.

You have two children in 10th and 8th standard.

Monthly income allows you to save Rs. 3 lakhs.

You are already investing Rs. 97,500 in SIPs.

Your total financial assets include:

PMS investments: Rs. 1.10 crore

Personal stock portfolio: Rs. 48.87 lakhs

Mutual fund portfolio: Rs. 50 lakhs

FD and savings: Rs. 15 lakhs

Rental income: Rs. 53,000 per month

Insurance:

Term insurance: Rs. 1 crore

ULIP: Rs. 1 crore

Health insurance: Rs. 15 lakhs (Star) + Rs. 10 lakhs (Care)

Let us now build a 360-degree strategy for the surplus Rs. 3 lakhs monthly.

Emergency Fund Planning
Maintain 12 months of total expenses as emergency fund.

Include school fees, household spends, travel costs, etc.

Rs. 25–30 lakhs can be parked as emergency reserve.

Use ultra-short debt mutual funds or sweep-in fixed deposits.

Ensure this money is highly liquid and safe.

Emergency fund gives mental comfort during uncertainty.

You may already have some allocation here from FDs.

Reassess and top up if needed.

Review and Reallocate ULIP
ULIP often has higher charges than mutual funds.

Returns also depend on insurance company performance.

These products combine investment with insurance.

Mixing both is not an efficient way to grow wealth.

If ULIP is not recent, assess current surrender value.

If ULIP performance is weak, consider surrender.

Redeploy proceeds into mutual funds via monthly STP.

This improves transparency, flexibility and performance tracking.

Mutual Fund Expansion
You are already investing Rs. 97,500 monthly in SIP.

Increase mutual fund SIP to Rs. 2 lakhs monthly.

Choose mix of large cap, multi cap, mid cap funds.

Use actively managed funds via Certified Financial Planner.

Avoid index funds due to these reasons:

No downside protection during market fall

No active rebalancing

Rigid allocation with no flexibility

Underperformance during sideways markets

No fund manager intelligence in stock selection

Actively managed funds help generate alpha over index.

They allow periodic fund review and course correction.

Invest through regular plans via qualified professionals.

Avoid direct funds unless you have full-time expertise.

Regular funds offer human support, reviews, discipline.

PMS and Stocks Evaluation
Rs. 1.10 crore in PMS is significant.

Ensure PMS is benchmarked and evaluated yearly.

Look for consistency and reasonable risk profile.

Some PMS schemes have higher drawdowns.

Discuss risk appetite with your Certified Financial Planner.

Similarly, your stock portfolio is Rs. 48.87 lakhs.

Review holdings for concentration and duplication.

Avoid investing fresh money in direct stocks now.

Instead, shift focus to mutual funds for safer diversification.

Children’s Education Corpus Planning
Higher education for 2 children in next 5–8 years.

Target corpus should be Rs. 60–80 lakhs.

Allocate Rs. 40,000–50,000 monthly for this goal.

Use a dedicated mutual fund with balanced exposure.

Choose moderate-risk funds to avoid volatility.

Rebalance yearly as goal approaches.

Shift to ultra-short debt funds two years before use.

This ensures safety from market downturn.

Retirement Planning Focus
You are currently 42.

Retirement target should be Rs. 6–7 crore corpus minimum.

Allocate Rs. 50,000 monthly for this goal.

This can be via actively managed mutual funds.

Include large cap and flexi cap funds for long term.

Plan to continue till age 55 or beyond.

Track this goal annually with performance reports.

Don't rely on property sale or pension alone.

Focus on creating a liquid retirement corpus.

Monthly Surplus: Recommended Allocation
Rs. 3 lakh surplus should be split as follows:

Rs. 2 lakh in mutual fund SIP (active, regular plans)

Rs. 50,000 for education corpus (goal-based funds)

Rs. 50,000 towards retirement portfolio

Review allocations annually with a Certified Financial Planner.

Rebalance based on asset performance and goals.

Taxation Considerations
New capital gains tax rule applies:

For equity mutual funds:

LTCG above Rs. 1.25 lakh taxed at 12.5%

STCG taxed at 20%

For debt mutual funds:

Both LTCG and STCG taxed as per income slab

ULIP maturity is tax-free only if premium is below cap.

FDs are taxable at slab rate.

Stocks attract STT and capital gains taxes.

Keep detailed record of transactions and redemption years.

Plan systematic withdrawals for tax efficiency.

Insurance Assessment
Term insurance of Rs. 1 crore is good.

You may increase to Rs. 2 crore based on liability.

ULIP insurance should not be part of your coverage.

Health insurance Rs. 25 lakhs combined is decent.

Ensure it covers NRI and India both if needed.

Add global health cover if settling abroad later.

Real Estate: No More Exposure Suggested
You already have rental income from existing property.

Do not add more real estate.

Avoid tying more money into illiquid assets.

Focus on market-based, liquid financial instruments.

Risk Management Tips
Maintain a clear goal-wise investment structure.

Set up SIPs in different goals to track separately.

Monitor PMS and stock volatility quarterly.

Use automatic STP from liquid fund to equity fund.

Don’t chase high returns or unregulated investments.

Avoid peer-to-peer lending and crypto assets.

Discuss investment changes only with a Certified Financial Planner.

Finally
Your financial base is strong and structured.

With Rs. 3 lakh monthly surplus, you are in a powerful position.

Prioritise long-term goals like education and retirement.

Avoid over-concentration in direct stocks or PMS.

Grow your mutual fund SIP and link to goals.

Eliminate underperforming products like ULIPs if needed.

Let your Certified Financial Planner review your total portfolio annually.

Focus on liquidity, diversification, and simplicity in all decisions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

Ans: Understanding Your Current Financial Situation

Your monthly salary is Rs 1.25 lakh with 10% annual increment.

You pay Rs 55,000 as EMI for a Rs 55 lakh home loan over 20 years.

Your flat is rented at Rs 15,000 per month.

Your effective income after rent and deductions is Rs 1.4 lakh.

You invest Rs 1 lakh annually in a ULIP for your daughter.

Savings and mutual fund investments have paused due to EMI burden.

Your situation is common among salaried officers with home loans. Let’s explore ways to maximize savings and meet your Rs 50 lakh target.

Loan Management and EMI Optimization

High EMI is restricting your savings capacity.

Review if prepayment or partial loan refinancing is possible to reduce interest burden.

Increasing EMI to reduce tenure is good but may affect liquidity.

Consider using increments or bonuses to make lump-sum prepayments.

Smaller tenure reduces interest, increasing net savings over time.

Avoid loan restructuring that increases tenure or lowers EMI without interest benefits.

Reviewing Your ULIP Investment

ULIPs combine insurance and investment but have higher charges.

Rs 1 lakh per year in ULIP may not give optimal investment returns.

Assess surrendering the ULIP once the lock-in period is over.

Reinvest surrender proceeds into mutual funds via MFD to optimize returns.

Mutual funds provide better liquidity, flexibility, and cost efficiency.

Maintain term insurance separately for risk cover, not ULIP.

Restarting and Maximizing Mutual Fund Investments

Mutual funds can help grow wealth with moderate risk.

Restart monthly SIPs with affordable amounts without straining your budget.

Increase SIP amount annually with your salary increments.

Prefer diversified and balanced funds managed by professionals (MFD).

Avoid direct funds if not monitoring regularly; professional advice helps.

Balanced funds reduce volatility compared to pure equity.

Budgeting and Expense Control

Track monthly expenses carefully.

Prioritize savings by treating them as non-negotiable expenses.

Avoid lifestyle inflation despite salary increments.

Use rent income wisely; consider increasing rent after contract expiry.

Reduce discretionary spending to free up funds for SIPs and prepayments.

Emergency Fund and Insurance

Maintain an emergency fund of 6 months expenses in liquid instruments.

Continue adequate health and term insurance coverage.

Do not divert emergency funds to investments.

Investment Time Horizon and Goal Setting

Your 10-year goal is achievable with disciplined investing.

Growth comes from systematic investments and reinvestment of returns.

Avoid impulsive withdrawals; stay invested for long-term gains.

Tax Planning Benefits

Use tax-saving instruments wisely within your investment portfolio.

Utilize deductions under relevant sections for investments and loan interest.

Efficient tax planning increases your effective savings.

Final Insights

You have the capacity to grow Rs 50 lakh in 10 years with a focused plan. Manage your loan efficiently, consider surrendering ULIP for better alternatives, restart and increase SIPs gradually, control expenses, and maintain insurance and emergency funds. Consult a Certified Financial Planner regularly for adjustments.

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

Ans: Planning early for children’s education is very wise.

Your son is 11 years old. Daughter is 3.5 years old.

MBBS is one of the costliest education choices in India today.

Even if they choose another path, having a solid fund helps.

Let’s create a complete 360-degree plan for both kids' education.

Understanding the Education Timeline
Your son has 6–7 years until college begins

Your daughter has 13–14 years to reach higher education

Professional courses like MBBS, law, architecture are very expensive

Even normal graduation and post-graduation now cost in lakhs

Private MBBS colleges can cost Rs. 1 crore or more

Government MBBS colleges cost less, but seats are very limited

You must plan for the highest cost scenario now itself

Why You Must Start Planning Immediately
Education inflation is very high — around 9% to 11% annually

Rs. 20 lakh today may become Rs. 45–50 lakh in 10 years

If you delay planning, SIP amounts will become too high later

Loans may be needed if you don’t plan early now

Education loans create pressure on the child and family

Starting now helps you avoid such burdens later in life

Setting Target Corpus for Each Child
Let’s assume you want to be prepared for MBBS costs

For your son, target around Rs. 50 lakh by age 18

For your daughter, target around Rs. 75 lakh by age 18

These numbers can cover private or government MBBS as per selection

If they choose another stream, this fund will still support them

Being overprepared is always better for children’s education

Asset Allocation Strategy for Education Planning
You need a mix of growth and safety for these goals

Use equity mutual funds for higher returns over long term

For son’s goal, add short-term hybrid debt portion after 3 years

For daughter’s goal, you can continue full equity for 7–8 years

Avoid RDs and FDs for long-term goals — they reduce wealth

Don’t invest in real estate for children’s future — low liquidity

Keep each child’s goal in separate mutual fund portfolios

Monthly Investment Needed Based on Timeline
For your son: you have 6–7 years to build Rs. 50 lakh

For your daughter: you have 13–14 years for Rs. 75 lakh

You will need to save in two different SIPs with different durations

A certified financial planner can help calculate SIP amounts accurately

Start as early as possible with even small monthly investments

Investment Types You Should Use
1. Regular Mutual Funds with Active Fund Management

Don’t use index funds — they have no human decision-making

Index funds copy the market, so they fall when the market crashes

Children’s future cannot depend on passive products

Use actively managed funds with lower downside risk

These offer better growth and smart handling in bad markets

2. Avoid Direct Mutual Funds

Direct funds give no guidance or review support

Most investors in direct plans stop SIPs during volatility

Wrong fund selection can damage the full education plan

Use regular plans through a Certified Financial Planner and MFD

They ensure right schemes, tax planning and rebalancing

Paying for guidance is safer than losing lakhs in poor fund choices

3. Use Child-Specific Fund Categories

Some funds are made specifically for child education goals

They have lock-ins and defined maturity timelines

These ensure money is used only for the child’s future

You can use a portion of SIP in such schemes for discipline

This avoids early withdrawal and keeps the money intact

Review of Common Mistakes to Avoid
Starting late and then investing too aggressively

Choosing FDs or insurance plans for children’s education

Not monitoring SIP growth and pausing during market crashes

Using education loans at the last minute with no plan

Keeping child’s fund in savings account or RD

Stay away from insurance-cum-investment schemes for this goal

If You Hold LIC, ULIP or Insurance-Based Investments
If you have any ULIP, traditional LIC or child plans

Please surrender those and reinvest into mutual funds

They give low returns and have poor liquidity and flexibility

ULIPs have high charges and maturity restrictions

LIC returns are often below inflation over long term

Switching now can double your fund value by the time child enters college

How to Manage Two Different Education Timelines
Your son’s corpus is required much earlier than daughter’s

Start two separate SIPs: one for son, one for daughter

For son, build equity corpus now and shift to hybrid after 3–4 years

For daughter, build full equity corpus over next 10 years

Don’t mix both goals — this creates confusion and stress

Label the SIPs clearly so you never stop them accidentally

Tracking them separately builds better focus and accountability

What If Child Studies Abroad or Does Not Choose MBBS
If your child goes abroad, cost could be higher than MBBS

This fund will still help with tuition and living costs

If they choose commerce or arts, you’ll have surplus money

You can reinvest surplus for marriage or other goals

Planning with the highest-cost goal ensures full readiness

Periodic Review of Your Plan is Important
Every 12 months, review fund performance and SIP progress

See if you are on track for target corpus for each child

Make corrections in fund type, amount or timeline if needed

A Certified Financial Planner can help with this annually

Financial planning is not “once done, forget forever”

Don’t Depend on Real Estate for Children’s Education
Real estate has poor liquidity and unpredictable returns

You cannot sell it fast during admission season

Children’s education fund must be easily accessible

Property prices don’t rise regularly like equity mutual funds

Keep education planning completely separate from property investments

Don't Use RDs or FDs for Long-Term Education Goals
FDs give 6–7% returns and are fully taxed

Inflation in education is around 9–11%

So your real return becomes negative in long term

RDs are worse due to monthly compounding restrictions

Mutual funds are more tax-efficient and inflation-beating

Avoid short-term products for long-term goals like education

What Happens If You Delay Saving by 3–4 Years
Monthly SIP amount will need to be 2x to reach the same goal

You may need to cut expenses or break long-term funds later

Loans or credit card usage may increase for fees

You may be forced to skip daughter’s SIP due to money pressure

Delaying saving puts double pressure on future income

How to Start Immediately and Stay Consistent
Set up SIPs on a fixed date — same as salary credit date

Don’t pause SIPs during market dips — they help you accumulate more units

Increase SIP amount by 10% every year

Label SIPs with child name — this adds emotional discipline

Track fund values every 6 months for confidence

This gives clarity, consistency and peace of mind

Taxation Planning for Withdrawals Later
Equity mutual funds above Rs. 1.25 lakh profit are taxed at 12.5%

Short-term gains are taxed at 20%

Plan withdrawal in staggered way to reduce tax impact

Use SWP (Systematic Withdrawal) method in final year

Your Certified Financial Planner can design this in final stage

Finally
You have the right mindset to prepare your children’s future.

MBBS or any career path — your role is to stay financially ready.

Start two SIPs separately — one for each child’s education need.

Avoid index funds, direct plans, and insurance-based products.

Use mutual funds with active management via a Certified Financial Planner.

Let your SIPs grow quietly, while your children grow confidently.

This is the most loving gift you can give them.

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

Ans: Hello Nayan
Unable to predict about a particular name of IISER. But she has chance to get admission to IISER
Best of luck to you.
Follow me if you like the reply. Thanks.
Radheshyam

Ans: You have handled your finances with discipline.

Your current passive income is Rs. 64,000 per month.

Your monthly need is Rs. 80,000 or more (Rs. 50,000 for household + Rs. 30,000 for education).

You aim for Rs. 1 lakh per month.

Let us now create a detailed plan to achieve your goal.

Current Income and Expense Assessment
You are getting Rs. 40,000 per month from Axis Bank FD (Rs. 87 lakh).

You also get Rs. 24,000 per month as rent.

Monthly household expense is Rs. 50,000.

Education cost is Rs. 30,000 or more per month.

Your current monthly income is Rs. 64,000.

Your monthly shortfall is around Rs. 16,000 now.

Your target income is Rs. 1 lakh per month.

You want to bridge the gap of Rs. 36,000 per month.

Detailed Investment Assessment
FD in Axis Bank: Rs. 87 lakh

FD in Axis Bank: Rs. 8 lakh

FD in SBI: Rs. 34 lakh

Mutual Funds: Rs. 4 lakh

Properties (excluding own flat): Rs. 3 crore+

Gold: Rs. 20 lakh

Insurance: Rs. 20 lakh (needs further checking if these are LIC/traditional plans)

Health Insurance: Rs. 5 lakh (family floater)

Family Responsibility Consideration
Son is 17 years old and preparing for JEE.

His college cost can rise sharply.

Daughter is 10 years old, currently in 6th.

Her higher education cost will hit in about 7–8 years.

You are the main financial manager as you are jobless now.

FD income and rent income are currently helping.

Cash Flow Optimisation Plan
You have too much locked in FDs.

Rs. 129 lakh in FDs is not efficient.

FD interest post-tax is not matching inflation.

You can keep only Rs. 40–45 lakh in FDs.

This should be for 3 years expenses and emergencies.

Balance Rs. 85 lakh from FDs can be redirected.

How to Use Excess FD Funds
Shift Rs. 50 lakh to hybrid mutual funds via monthly STP.

Invest Rs. 25 lakh in balanced advantage and equity-oriented hybrid funds.

Rs. 10 lakh can go to short-duration debt funds.

Keep Rs. 4–5 lakh in a liquid fund for sudden education needs.

Invest only through regular funds via MFD with CFP.

Avoid direct funds.

Why to Avoid Direct Funds
Direct funds need regular tracking and fund switching.

They have no guided support or help.

A Certified Financial Planner reviews goals and realigns funds every year.

Regular plans bring disciplined long-term gains.

Mutual Fund Selection Based on Goals
For monthly income, choose funds with SWP options after 3 years.

For daughter’s college, use 10-year hybrid SIPs from now.

For son’s engineering, set aside Rs. 12–15 lakh in short-term funds.

Do not depend only on FD for child’s education.

Mutual funds beat FD returns over longer periods.

Creating a Monthly Withdrawal Income
Shift Rs. 50 lakh gradually from FDs to mutual funds.

After 3 years, start SWP (systematic withdrawal plan).

You can draw Rs. 35,000 to Rs. 45,000 per month via SWP.

This will be more tax efficient than FDs.

Add this to your FD and rental income.

This will bring your income to Rs. 1 lakh monthly.

Managing Existing Mutual Fund Holdings
You have Rs. 4 lakh in mutual funds.

These are too low compared to your total corpus.

Increase this allocation as described above.

Do not redeem these unless urgently required.

LIC or Insurance Review
You said Rs. 20 lakh is invested in insurance policies.

If they are ULIPs or traditional plans, please stop future premiums.

Check surrender value.

Redeem and shift to mutual funds with guidance.

Insurance should be only for protection, not investment.

Gold Holding
You hold Rs. 20 lakh in gold.

Gold gives no monthly income.

Keep only Rs. 5–7 lakh in gold as reserve.

You can sell part of the remaining and invest in mutual funds.

This can be used for daughter’s education after 6–7 years.

Property Portfolio Insight
You own property worth Rs. 3 crore or more.

Please don’t consider buying more.

Real estate does not help in monthly income.

It has poor liquidity.

Hold these for asset diversification, not income generation.

You may sell one property in future for daughter’s marriage or education.

Risk Management and Safety
Your current health cover is Rs. 5 lakh.

This may not be enough for a family of 5.

Increase cover to Rs. 10 lakh via top-up health plan.

Hospital costs are rising rapidly.

Ensure each member is protected.

Do not depend only on employer health cover (if applicable).

Emergency Fund Allocation
Create a separate emergency fund of Rs. 10 lakh.

Keep it in liquid mutual fund or sweep FD.

This should not be touched for regular expenses.

Use only in jobless phase, illness, or sudden home repair.

Passive Income Vision
You already earn Rs. 64,000 per month passively.

With SWP and MF income, you can reach Rs. 1 lakh monthly.

Keep reviewing the investment plan every 12 months.

Use Certified Financial Planner for guidance.

Don’t self-manage large corpus without expert help.

Investment and Tax Efficiency
Mutual fund withdrawals are taxed more favourably than FDs.

FD income is taxed at your slab.

In mutual funds, LTCG tax above Rs. 1.25 lakh is just 12.5%.

STCG is taxed at 20%.

Hybrid funds give better after-tax returns.

Plan SWP carefully to avoid heavy tax in one year.

Education Goal Planning
Your son’s higher education is very near.

You may need Rs. 20–30 lakh depending on college.

Keep Rs. 15 lakh in low-risk mutual fund.

Keep rest in bank savings for easy access.

Daughter’s higher education will need Rs. 40–50 lakh in 8–10 years.

Start monthly SIP for this goal now.

Final Insights
You have built a strong base.

But your investments are not efficient now.

Too much is kept in FDs.

Gold and property are not giving income.

Shift part of FDs and gold to mutual funds.

Plan education funds separately.

Focus on monthly SWP income after 3 years.

Review health cover.

Surrender non-performing insurance.

Create SIPs for daughter’s future.

Keep emergency funds untouched.

Achieving Rs. 1 lakh per month is very much possible.

But needs correct mix of safety and growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: Hello Ismit
With the mentioned score and category, you can hope, but not with certainty.
Best of luck to you.
Follow me if you like the reply. Thanks.
Radheshyam

Ans: Hello dear.
The chances of NITs are slim, but he can get admission to IIITs with a preferred branch of Mechanical or a related branch.
Best of luck to you.
Follow me if you like the reply. Thanks.
Radheshyam

Ans: It’s commendable that you've accumulated a corpus of Rs. 1 crore through disciplined SIPs in equity mutual funds. Your concern about sustaining a 6% annual withdrawal through SWP, especially during prolonged bear markets, is valid. Let's explore strategies to ensure the longevity of your corpus.

Understanding the Risks of SWP in Equity Mutual Funds

SWP involves redeeming units at regular intervals.

In a bear market, the NAV of equity funds declines, leading to more units being redeemed for the same withdrawal amount.

This accelerates corpus depletion.

Prolonged market downturns can erode capital faster than anticipated.

Relying solely on equity funds for SWP increases this risk.

Strategies to Mitigate Risks and Sustain SWP

Diversify Asset Allocation

Allocate a portion of your corpus to debt mutual funds.

Debt funds are less volatile and provide stable returns.

This creates a buffer during equity market downturns.

Implement a Bucket Strategy

Divide your corpus into three buckets:

Bucket 1: Short-term needs (1-2 years) in liquid or ultra-short-term debt funds.

Bucket 2: Medium-term needs (3-5 years) in balanced or hybrid funds.

Bucket 3: Long-term growth (5+ years) in equity funds.

This approach ensures liquidity and growth while managing risk.

Adjust Withdrawal Rate

Consider reducing the withdrawal rate from 6% to 4-5%.

This decreases the strain on your corpus during market downturns.

Use Dynamic SWP

Instead of fixed withdrawals, adjust the SWP amount based on market performance.

Withdraw more during bull markets and less during bear markets.

This preserves capital.

Maintain an Emergency Fund

Keep 6-12 months of expenses in a separate emergency fund.

This prevents the need to redeem investments during unfavorable market conditions.

Regular Portfolio Review

Periodically review and rebalance your portfolio with the help of a Certified Financial Planner.

This ensures alignment with your financial goals and market conditions.

Tax Implications

Be aware of the tax implications of SWP.

Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.

Short-term capital gains (STCG) are taxed at 20%.

Plan withdrawals accordingly to minimize tax liability.

Final Insights

Sustaining a 6% annual withdrawal from a 100% equity mutual fund corpus during prolonged bear markets is challenging. Implementing a diversified investment strategy, adjusting withdrawal rates, and maintaining an emergency fund can enhance the longevity of your corpus. Regular consultations with a Certified Financial Planner will provide personalized guidance tailored to your financial situation.

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

Ans: You are 42 years old with in-hand income of Rs. 1.5 lakhs.

You own three real estate assets, two of them on loan.

Your plan is to retire at age 55 and create Rs. 3 crore corpus.

Bengaluru flat has no loan. Market value is Rs. 1.2 crore. Rent is Rs. 22,000.

Chennai self-occupied flat is worth Rs. 63 lakhs. EMI is Rs. 38,000 for 240 months.

Residential plot in Chennai is worth Rs. 60 lakhs. EMI is Rs. 33,000 for 220 months.

Total EMI is Rs. 71,000 per month.

Your cashflow is under pressure because of EMIs and low rent yield.

Rent Yield Is Too Low
You are getting Rs. 22,000 rent from a Rs. 1.2 crore property.

That is around 2.2% annual yield on value.

Maintenance, tax, and repairs will reduce net income further.

Real estate yields in India are mostly low. So they don’t beat inflation.

Such a low-yield asset is not ideal when you carry two big loans.

With Rs. 1.2 crore value, this can be better utilized elsewhere.

Bengaluru Property: Time to Exit?
You don’t want to live in Bengaluru.

You plan to settle in Chennai.

There is no emotional attachment to this asset now.

Exit from a city where you don’t plan to live or retire is sensible.

Better to have fewer, well-utilised assets than more underperforming ones.

Pay Off Loan with Bengaluru Sale Proceeds
You can sell the Bengaluru flat and clear one or both loans.

Clearing the Rs. 38,000 EMI for 240 months will free up cash flow.

Or clear the Rs. 33,000 EMI for the plot.

Loan interest outgo is very high over long duration.

Early loan closure reduces interest burden and improves liquidity.

Better liquidity means you can start proper retirement investments.

Tax Considerations on Property Sale
You will pay long-term capital gains tax if holding is more than 2 years.

But you can reinvest gains in another property to save tax.

You can also invest in certain tax-saving bonds to avoid tax.

Please consult your CA to plan this part properly.

Avoid Holding Too Many Properties
You already have three properties. You want to keep only Chennai home.

That is perfect if you wish to settle down there.

Too much real estate can block your money.

They don’t give enough cash flow or flexibility.

Managing and selling later also becomes difficult.

Don’t Invest in More Properties
You already have enough exposure in physical assets.

More real estate will lock capital with poor liquidity.

Don’t invest in plots or flats anymore.

Instead, build your retirement corpus in financial assets.

Start with Retirement Planning
You are left with 13 years to retire at 55.

In 13 years, you must create Rs. 3 crore retirement fund.

You need consistent and increasing investment monthly.

Create a dedicated retirement plan through proper goal mapping.

Follow A Proper Retirement Planning Framework
Step 1: Define retirement lifestyle and expenses.

Step 2: Consider inflation-adjusted monthly need after 13 years.

Step 3: Create a retirement corpus matching that need.

Step 4: Allocate money monthly to a diversified financial portfolio.

Step 5: Review once every year with clear documentation.

Mutual Funds Are Best Long-Term Vehicles
You must start or increase SIPs in diversified mutual funds.

Choose a mix of large-cap, mid-cap, and multi-cap schemes.

SIPs bring discipline and average out market risk.

Mutual funds are managed by professionals. They are transparent.

Unlike real estate, they are easy to liquidate when needed.

Avoid Index Funds
Index funds follow the index passively. They don’t adapt to market changes.

They invest in overvalued stocks too. No active stock selection.

They underperform in volatile or falling markets.

Actively managed funds beat index over long term.

They are better for your retirement and goal-based planning.

Avoid Direct Mutual Fund Investing
Direct plans don’t come with handholding or reviews.

Investors miss opportunities because of poor scheme selection.

Many people invest randomly without asset allocation.

Regular plans through a Certified Financial Planner are better.

You get goal linking, reviews, and portfolio rebalancing.

Mistakes avoided early lead to better wealth over long run.

How To Structure Monthly Flow Now
In-hand salary is Rs. 1.5 lakh.

EMI is Rs. 71,000.

Balance is Rs. 79,000.

Household and lifestyle expense could be Rs. 40,000.

That leaves Rs. 39,000 to invest monthly.

Start SIP of Rs. 25,000 to Rs. 30,000 in mutual funds.

Use balance for yearly expenses and emergencies.

Emergency Fund Is Essential
Create emergency fund of 6 months of expenses plus EMIs.

In your case, around Rs. 6 lakhs to Rs. 8 lakhs.

Keep this in a liquid mutual fund or sweep FD.

Emergency fund avoids panic during income loss or medical shock.

Buy Pure Term Insurance If Not Done Yet
Check if you have term insurance of minimum Rs. 1 crore.

Don’t mix insurance and investment.

Don’t buy ULIPs or investment policies.

Buy pure term plan only.

Avoid LIC Investment Policies
If you have any traditional or investment LIC policies, review them.

These policies give poor returns of around 4% to 5% per year.

They don’t beat inflation.

They are not suitable for retirement planning.

If your policies are more than 3 years old, you can surrender.

Reinvest the maturity or surrender amount in mutual funds.

Tax Planning Should Be Integrated
PPF is good for tax saving and stability.

ELSS mutual funds are better for long-term and tax saving.

Avoid locking too much in fixed-return products.

Create tax plan every year with investment goals in mind.

Track Capital Gains from Mutual Funds
New tax rules apply from FY 2024-25.

Equity funds LTCG above Rs. 1.25 lakh taxed at 12.5%.

STCG on equity is taxed at 20%.

Debt fund gains are added to income slab.

You need to plan redemptions with this in mind.

Work with a Certified Financial Planner
Managing debt, retirement, and investments is complex.

A Certified Financial Planner helps in goal mapping.

They ensure you invest correctly based on time horizon.

They help you avoid big mistakes.

Work with one who is experienced and unbiased.

Finally
Sell the Bengaluru flat. Repay one or both loans.

Create emergency fund before doing fresh investments.

Start monthly SIPs in diversified mutual funds.

Avoid index and direct mutual fund investments.

Avoid more real estate. Focus only on financial instruments.

Review and rebalance your plan every year.

Goal-based investing is the key to a peaceful retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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