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Ramalingam Kalirajan  |3951 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 23, 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 22, 2024Hindi

Hello Dev, I require a financial planning guidance for next 20 years. At present - my age is 50 yrs & is unemployed.( Looking to start business but have doubt or opt for job ) Having term insurance of 1cr.health insurance of 10L. 50L in fd. Share market investment of 5l. Home Loan of 20l with emi 20k, for next 8 yrs. Wife ( 48age) is lecture earning 60k/month Daughter studing in 11 aspirant for engineering + PG at abroad. Having other asset of flat+ gold + plot will amount 50l. Thanking you- NN

Ans: Financial Planning Guidance for the Next 20 Years
Current Financial Situation and Goals
You are 50 years old, unemployed, and considering starting a business or opting for a job. Your wife is a lecturer earning Rs. 60,000 per month. You have a daughter aspiring for engineering and postgraduate studies abroad. You have Rs. 50 lakhs in fixed deposits, Rs. 5 lakhs in the share market, and a home loan of Rs. 20 lakhs with an EMI of Rs. 20,000 for the next eight years. You also have assets in the form of a flat, gold, and plot worth Rs. 50 lakhs.

Your detailed understanding of your current financial situation is commendable. You have taken significant steps by securing term and health insurance and investing in diverse assets.

Assessing Employment vs. Business
Job Stability
Opting for a job can provide a stable income stream, essential for meeting ongoing expenses, especially with a home loan EMI and your daughter's education.

Starting a Business
Starting a business involves risk but can offer higher returns. Evaluate your risk tolerance, potential business opportunities, and market conditions before deciding.

Insurance Coverage
Term Insurance
You have a term insurance of Rs. 1 crore, which is adequate. Ensure that the coverage remains sufficient as your financial situation changes.

Health Insurance
A health insurance cover of Rs. 10 lakhs is good. Consider increasing this coverage, given rising healthcare costs and your age.

Managing Existing Investments
Fixed Deposits
Fixed deposits provide safety but offer lower returns. Consider diversifying some of your FD investments into higher-yielding options.

Share Market Investments
With Rs. 5 lakhs in the share market, review the performance of these investments. Regular monitoring and rebalancing can enhance returns.

Home Loan Management
Reducing EMI Burden
Your home loan EMI is Rs. 20,000 for the next eight years. Consider making lump-sum payments towards the principal to reduce the EMI burden and interest outgo.

Balance Transfer
Explore the option of a home loan balance transfer to a lender offering a lower interest rate. This can reduce your EMI and overall interest burden.

Daughter’s Education Planning
Engineering and PG Abroad
Education costs, especially abroad, can be substantial. Start a dedicated education fund for your daughter, investing in diversified mutual funds to accumulate the required corpus.

Asset Management
Flat, Gold, and Plot
Your assets amount to Rs. 50 lakhs. Ensure they are effectively utilized or can be liquidated when needed for significant expenses like education or emergencies.

Investment Strategy
Diversify your investments across asset classes to manage risk and optimize returns. Consider a mix of equity, debt, and hybrid funds.

Regular Investments
Continue regular investments through SIPs. This will help in rupee cost averaging and building a substantial corpus over time.

Evaluating Direct vs. Regular Funds
Disadvantages of Direct Funds
Direct funds save on commissions but lack personalized guidance. Professional advice from a Certified Financial Planner (CFP) can provide strategic insights and help in making informed decisions.

Benefits of Regular Funds
Investing through regular funds ensures you receive expert advice, optimizing your portfolio for better returns and risk management.

Retirement Planning
Building a Retirement Corpus
Plan to build a substantial retirement corpus. Regularly invest in a mix of equity and debt funds, considering your risk tolerance and time horizon.

Systematic Withdrawal Plan
Consider a Systematic Withdrawal Plan (SWP) post-retirement. This will provide a steady income stream while keeping your investments growing.

Emergency Fund
Importance of Liquidity
Maintain an emergency fund equivalent to 6-12 months of expenses. This provides liquidity and financial stability during unforeseen events.

Professional Guidance
Certified Financial Planner (CFP)
Engage a Certified Financial Planner for personalized financial advice. They can help you navigate complex financial decisions and achieve your long-term goals.

Balancing immediate financial needs with long-term goals is crucial. Diversify investments, reduce debt, and plan for significant expenses like education. Regularly review and adjust your financial plan to stay on track.

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  |3951 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

Hello sir, Myself Prakash, age 31. I am a salaried person (married) working in private sector and my in hand salary is 50k. I have joint bank loan of 33L for 20 years for our house jointly by three of us (brothers) in which I am paying 9-9.5k per month (4 yrs already passed). My monthly expenses are approx 35k. I have a Emergency Corpus of 1.5L. I have a term insurance policy of 1 cr with a premium of 1.7k to be paid till 2032. I have health insurance also for my family with premium of 1.5k We also have covered our parents in separate health policy of premium 40-42k per year split equally between three of us. Pls suggest investment for my below mentioned goals. A. Short term goal 1. Small Car after 6 yrs of approx 7-8L 2. Own house after 15 years of approx 35-40L B. Long term goal 1. Child education fund after 17 yrs of 15L 2. Child marriage fund after 24 yrs of 25 L 3. Retirement fund after 24 yrs which would give me monthly 50k. Pls advise.
Ans: Dear Prakash,

It's great to see your proactive approach towards financial planning, especially with such diverse goals. Let's outline a comprehensive investment strategy to help you achieve your short and long-term objectives.

Your dedication to securing your family's future through meticulous financial planning is truly commendable and sets a strong example for responsible wealth management.

Short-Term Goals
Small Car Purchase (6 Years):
Savings Approach:
Allocate a portion of your monthly savings towards a dedicated fund for the small car purchase. Aim to save at least 7-8 lakhs over the next 6 years.
Own House (15 Years):
Investment Strategy:
Consider long-term investment options such as mutual funds or Public Provident Fund (PPF) to accumulate the required down payment for your future house. Aim for a corpus of 35-40 lakhs in 15 years.
Long-Term Goals
Child Education Fund (17 Years):
Systematic Investment Plan (SIP):
Start a SIP in equity mutual funds or balanced funds to build a corpus of 15 lakhs for your child's education over the next 17 years. Opt for a diversified portfolio to manage risk.
Child Marriage Fund (24 Years):
Strategic Investing:
Begin investing in equity-oriented instruments or a combination of equity and debt to accumulate 25 lakhs for your child's marriage expenses over 24 years. Review and adjust your investment portfolio periodically.
Retirement Fund (24 Years):
Retirement Planning:
To generate a monthly income of 50,000 post-retirement, focus on building a substantial retirement corpus through a mix of equity, debt, and other income-generating assets.
Diversified Portfolio:
Invest systematically in retirement-oriented mutual funds, National Pension System (NPS), and other retirement-focused investment avenues. Ensure a balanced allocation to minimize risk and maximize returns.
Risk Management and Insurance
Term Insurance:

Your existing term insurance coverage of 1 crore provides essential financial protection for your family. Continue paying premiums regularly to maintain coverage.
Health Insurance:

Maintain your health insurance coverage for your family and parents to safeguard against unforeseen medical expenses. Consider reviewing your policy periodically to ensure adequate coverage.
By adopting a disciplined approach to saving and investing, you can effectively achieve your short and long-term financial goals. Remember to periodically reassess your financial plan and make necessary adjustments to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |3951 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 11, 2024

Asked by Anonymous - Jun 07, 2024Hindi
hello sir, I am 53 yrs,working in private sector soon to be redundant,(in a year)I have my own house in a appartment my savings are 50 L in FD,s 30 L in Mutual fund ,10L in equity shares.LIC of 10L .3L in as emergency fund,my liabilities are children's education (son in class 10 daughter in class 8. no health insurance(presently company provided)spouse is a housewife please advise me for financial planning including for retirement planning.
Ans: Comprehensive Financial Plan for Redundancy and Retirement
Understanding Your Current Financial Situation
You are 53 years old, working in the private sector, and facing redundancy in a year. You own a house in an apartment and have Rs 50 lakh in fixed deposits, Rs 30 lakh in mutual funds, Rs 10 lakh in equity shares, and Rs 10 lakh in LIC. Additionally, you have Rs 3 lakh as an emergency fund. Your spouse is a housewife, and you have two children in school. You currently lack personal health insurance, relying on company-provided coverage.

Setting Clear Financial Goals
Immediate Goals
Redundancy Preparation: Ensure a smooth financial transition after redundancy.
Health Insurance: Secure comprehensive health insurance for your family.
Short-term Goals
Children's Education: Allocate funds for your children's ongoing and future education needs.
Emergency Fund: Strengthen your emergency fund to cover unforeseen expenses.
Long-term Goals
Retirement Planning: Create a sustainable retirement plan to maintain your lifestyle.
Wealth Preservation and Growth: Ensure your investments continue to grow while preserving capital.
Analyzing Your Current Assets
Fixed Deposits
You have Rs 50 lakh in fixed deposits. While FDs offer safety, their returns may not beat inflation in the long term. Consider rebalancing a portion for higher returns.

Mutual Funds
Your mutual fund portfolio is Rs 30 lakh. Mutual funds are good for long-term growth due to their compounding benefits. Review the performance and diversify if necessary.

Equity Shares
Your equity shares amount to Rs 10 lakh. Equities can provide high returns but come with higher risks. Balance them with safer investments to reduce risk.

LIC Policy
You have an LIC policy with a maturity amount of Rs 10 lakh. Review the policy benefits and consider if it meets your insurance needs.

Emergency Fund
Your emergency fund stands at Rs 3 lakh. Aim to increase this to cover at least 6-12 months of expenses for financial security.

Securing Health Insurance
Comprehensive Health Coverage
With redundancy approaching, securing health insurance is crucial. Opt for a comprehensive family floater plan with a high sum insured to cover medical emergencies.

Preparing for Redundancy
Income Replacement Strategies
Exploring New Opportunities: Start exploring new job opportunities or freelance work to replace your income.
Utilizing Skills and Experience: Leverage your experience for consulting or part-time roles in your industry.
Managing Children's Education Expenses
Creating an Education Fund
Education SIPs: Start a Systematic Investment Plan (SIP) in child-specific mutual funds to grow a dedicated education fund.
PPF and Sukanya Samriddhi Yojana: Consider PPF for your son's education and Sukanya Samriddhi Yojana for your daughter, offering tax benefits and secure returns.
Strengthening Your Emergency Fund
Building a Robust Safety Net
Increase your emergency fund to cover at least 6-12 months of living expenses. Use liquid mutual funds or high-yield savings accounts for easy access.

Retirement Planning
Calculating Retirement Corpus
Estimate your post-retirement expenses considering inflation and lifestyle needs. Use retirement calculators to determine the required corpus. For example, if you need Rs 50,000 per month today, with 6% inflation, you’ll need a higher amount in 10 years.

Diversifying Investments
Equity Mutual Funds: Allocate a portion of your savings to equity mutual funds for higher growth potential.
Debt Mutual Funds: Invest in debt funds for stable returns and reduced risk.
Hybrid Funds: Combine equity and debt for balanced growth.
Systematic Withdrawal Plan
Creating a Withdrawal Strategy
Plan a systematic withdrawal strategy from your investments to ensure regular income post-retirement. Consider the 4% rule for sustainable withdrawals.

Tax-efficient Investments
Maximizing Tax Benefits
ELSS Funds: Invest in Equity Linked Savings Scheme for tax-saving benefits under Section 80C.
NPS Contributions: Consider the National Pension System for additional tax benefits under Section 80CCD.
Reviewing and Adjusting Insurance Coverage
Adequate Life Insurance
Ensure your life insurance cover is sufficient to meet your family’s needs in your absence. Term insurance offers high coverage at low premiums. Review your existing LIC policy and consider additional term insurance if necessary.

Diversified Investment Portfolio
Regular Monitoring and Rebalancing
Regularly monitor your investment portfolio and rebalance to align with your financial goals. Adjust asset allocation based on market conditions and personal circumstances.

Professional Guidance
Consulting a Certified Financial Planner (CFP)
Engage a Certified Financial Planner to create a detailed, personalized financial plan. A CFP provides professional insights and strategies tailored to your financial situation and goals.

Final Insights
Securing your financial future involves strategic planning and disciplined investing. Address immediate needs, such as health insurance and redundancy preparation, while building a robust retirement corpus. Regularly review and adjust your investments for optimal growth and risk management. With careful planning, you can achieve financial security and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |3951 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 14, 2024

Asked by Anonymous - Jun 14, 2024Hindi
Sir, I am 32 years old. I have retired to stay with my parents with a corpus of 4cr, Out of the income generated from my corpus which i have distributed among my elderly parents mainly in FDs I am able to do a SIP of 80K monthly apart from depositing 1.5 L in PPF and 50k in Nps. I also have about 15 L exposure in shares and 60 L in Mutual Funds and 20 L in savings account for emergency apart from having Mediclaim for the family. My present family expenditure is 75 k per month I plan to remain single and have no loans. Want to know whether my financial planing will be able to see me through my life.
Ans: Understanding Your Current Financial Situation
Firstly, congratulations on your disciplined approach to financial planning. With a corpus of Rs 4 crore and strategic investments, you’ve established a strong foundation. Let’s take a closer look at your financial plan and its sustainability over your lifetime.

Corpus Allocation and Safety Net
Your corpus of Rs 4 crore is a significant amount. It's wisely distributed, offering both security and growth potential. Fixed Deposits (FDs) provide safety, though they often yield lower returns compared to other investment options. Your distribution of funds, especially the Rs 20 lakh kept as an emergency fund, shows foresight. Having Rs 20 lakh in a savings account ensures liquidity and readiness for any unforeseen expenses.

Monthly SIP and Investments in PPF and NPS
You are contributing Rs 80,000 monthly to Systematic Investment Plans (SIPs), Rs 1.5 lakh annually to Public Provident Fund (PPF), and Rs 50,000 annually to the National Pension System (NPS). These are commendable strategies. SIPs, especially in equity mutual funds, can provide substantial long-term growth due to compounding and rupee cost averaging. PPF and NPS offer tax benefits and a secure retirement corpus.

Equity and Mutual Fund Exposure
Your Rs 15 lakh exposure in shares and Rs 60 lakh in mutual funds indicate a balanced approach to risk and return. While direct equity investment can be rewarding, it’s also risky and requires diligent monitoring. Your mutual fund investments, managed by professional fund managers, offer diversified exposure and reduce individual stock risk.

Family Expenditure and Lifestyle Choices
With a monthly family expenditure of Rs 75,000, your expenses seem well-managed within your means. Planning to remain single without any loans further reduces financial strain and obligations. Your mediclaim policy is a crucial safety net, covering potential health-related expenses and ensuring your corpus remains intact.

Assessing Long-term Sustainability
Now, let’s evaluate whether your current financial planning can sustain you through your lifetime. We will consider various factors such as inflation, investment returns, and life expectancy.

Inflation and Its Impact
Inflation erodes purchasing power over time. Historically, inflation in India averages around 6-7% per year. While your current expenses are Rs 75,000 per month, they will likely increase over the years. It’s essential to ensure that your investments grow at a rate higher than inflation to maintain your lifestyle.

Investment Returns and Growth
Your investment strategy includes a mix of FDs, equity shares, mutual funds, PPF, and NPS. Historically, equity mutual funds in India have delivered returns between 12-15% annually, significantly outpacing inflation. PPF provides around 7-8% returns, which is close to the inflation rate, and NPS, depending on the asset allocation, can yield around 9-11%. Your FD returns, though secure, may not beat inflation, but they provide stability.

Future Income Generation
To sustain your lifestyle and grow your corpus, it's crucial to focus on investments that offer inflation-beating returns. Your SIPs in equity mutual funds will likely be the primary growth driver. Given your Rs 80,000 monthly SIP, you are investing Rs 9.6 lakh annually in mutual funds. Over the long term, this could significantly grow your corpus, assuming average returns of 12-15% from equity mutual funds.

Reassessment and Diversification
It’s important to periodically reassess your financial plan. Given your current exposure, it might be beneficial to review the performance of your shares and mutual funds annually. Diversifying your mutual fund portfolio across large-cap, mid-cap, and small-cap funds can balance risk and returns. Avoiding over-reliance on FDs and ensuring a greater portion is in high-growth potential instruments will help.

Importance of Active Management
Actively managed funds often outperform index funds in emerging markets like India due to market inefficiencies. Fund managers can make strategic decisions to capitalize on market opportunities. While index funds mirror market performance, actively managed funds strive to beat it, which can be advantageous in a dynamic market environment.

Potential Drawbacks of Direct Funds
Direct funds may seem attractive due to lower expense ratios, but they require a deeper understanding and continuous monitoring. Investing through a Certified Financial Planner (CFP) can provide professional guidance, ensuring your investments align with your goals and risk tolerance. Regular funds, despite higher fees, offer the benefit of professional management and advice, which can be invaluable.

Emergency Fund and Liquidity
Your Rs 20 lakh emergency fund is substantial and provides a solid safety net. Ensure it remains easily accessible and consider keeping it in a high-interest savings account or a liquid fund for better returns. It's crucial to maintain this fund to cover at least 6-12 months of expenses.

Health Insurance and Contingency Planning
Your mediclaim policy is essential. Regularly review it to ensure adequate coverage, especially as medical costs rise. Consider critical illness insurance if you don't already have it. It's also wise to have a will in place to ensure smooth succession of your assets.

Evaluating Future Goals and Adjustments
As you age, your risk tolerance might change. It's essential to adjust your investment strategy accordingly. Consider shifting to more conservative investments as you approach retirement age. Reviewing and rebalancing your portfolio annually can help maintain the desired risk-reward ratio.

Financial Planning Tools and Resources
Utilizing financial planning tools can provide insights into your future financial position. These tools can simulate different scenarios, helping you make informed decisions. A CFP can offer tailored advice based on your unique situation and goals.

Legacy Planning and Philanthropy
If you have philanthropic goals or wish to leave a legacy, plan accordingly. Setting up trusts or charitable foundations can ensure your wealth benefits future generations or causes you care about.

Monitoring and Adjusting Your Plan
Financial planning is not a one-time activity. Regular monitoring and adjustments are crucial. Life events, market changes, and personal goals evolve, necessitating periodic reviews. Staying proactive ensures your financial health and long-term sustainability.

Final Insights
Your current financial planning shows prudence and foresight. Maintaining a balance between growth-oriented investments and secure options like FDs provides stability and potential for wealth growth. Regularly reassessing and adjusting your plan ensures it remains aligned with your goals and market conditions. With disciplined investing, continuous learning, and professional guidance, you can confidently navigate your financial journey and secure a comfortable future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more

Latest Questions

Moneywize   |122 Answers  |Ask -

Financial Planner - Answered on Jun 25, 2024

Asked by Anonymous - Jun 13, 2024Hindi
Ours is a family of 3 people -- My wife, I and my daughter who is 15. I am 39, my wife is 37 and our monthly expenses are Rs 90K. I own my house and expect to have no fixed income after 65 years, and expect to live till 75. Considering the ever increasing price rise what should be my corpus at 65 for me to continue living the life style I am living today?
Ans: Calculating your retirement corpus:

Here's how to estimate the corpus you'll need to maintain your current lifestyle after retirement:

1. Retirement period:

You plan to retire at 65 and expect to live till 75. So, your retirement period is 75 - 65 = 10 years.

2. Inflation adjustment:

You've rightly considered inflation. To estimate future expenses, we need to factor in inflation. A safe assumption for India is 5-7% inflation. Let's take an average of 6%.

3. Current monthly expenses:

You spend Rs 90,000 per month currently.

4. Future monthly expenses:

To find the monthly expense at retirement (at 65), we need to consider inflation for 26 years (39 years till retirement + 10 years retirement).

You can use an inflation calculator online or a simple formula:

Future monthly expense = Current monthly expense * (1 + Inflation rate)^number of years

In your case, Future monthly expense = Rs 90,000 * (1 + 0.06)^26 ≈ Rs 3,28,550 (approximately Rs 3.29 lakh)

5. Total corpus calculation:

Now you can calculate the total corpus needed. Here's a common approach:

Total corpus = Monthly expense * Number of years in retirement * 12 (months)

However, this method doesn't consider the fact that you'll be withdrawing money every month, reducing the corpus. A more accurate method is using the Time Value of Money (TVM) concept. There are online TVM calculators or Excel functions you can use.

Here's an alternative approach that provides a reasonable estimate:

Multiply the future monthly expense (Rs 3.29 lakh) by a factor considering inflation over the period. This factor can vary depending on your risk tolerance and investment strategy. A factor of 200 is often used as a conservative estimate.
Total corpus = Rs 3.29 lakh/month * 200 (factor) = Rs 6.58 crore (approximately Rs 658 million)

Additional factors to consider:

• Daughter's future expenses: Your daughter will be an adult by the time you retire. While she won't be financially dependent, consider any potential future support you might want to provide for her education or marriage.
• Healthcare costs: Healthcare expenses tend to increase with age. Factor in potential medical needs during retirement.
• Debt: If you have any outstanding debt by the time you retire, you'll need to account for its repayment in your corpus calculation.
• Investment returns: The corpus amount assumes a certain rate of return on your investments. Research different investment options and their potential returns to refine your calculations.


Consult a financial advisor for a personalised retirement plan considering your specific financial situation, risk tolerance, and investment goals. They can help you create a more comprehensive plan and suggest suitable investment strategies to achieve your corpus target.

Remember, this is an estimate. Regularly review your plan and adjust it based on changing circumstances.

...Read more


Mayank Chandel  |1003 Answers  |Ask -

IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Jun 24, 2024

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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