Hello sir I am doctor with 41 yrs age . I have about 1cr investment in mf and I am doing 1.30 lakhs sip per month . Plus I have 40 lakhs in ppf and 25 lakhs invested in icici pru and emergency funds of 7 lakhs in Fd. I have real estate investment of 3 cr in land and flats which gives me 40 thousand rent per month I don’t have any loans on me.my monthly income is 4 lakhs .i have also investing 50,000 per year in nps with 10 lakh present value in nps . I have two kids with 12 yrs and 8 yrs old . My goal is to accumulate 2cr for kids education in next 10 yrs and monthly pension of 2 lakhs per month on retirement on age of 60 .is it possible

Ans: Dr. Shantanu, your commitment to securing your family's future and your proactive approach towards financial planning is commendable. Let's outline a comprehensive strategy to achieve your goals while ensuring financial stability throughout your life journey.

Understanding Your Goals and Responsibilities

As a dedicated professional and caring parent, your primary objectives include providing quality education for your children and securing a comfortable retirement. By aligning your investments with these goals, we can chart a path towards realizing your aspirations.

Optimizing Investment Allocation
Your diversified investment portfolio comprising mutual funds (MF SIPs), shares, Public Provident Fund (PPF), National Pension System (NPS), and insurance policies lays a solid foundation for wealth accumulation.

Maximizing Returns Through Strategic Allocation
While Mutual Fund SIPs offer systematic wealth accumulation, direct stock investments require careful selection and periodic review to optimize returns. Consider rebalancing your portfolio periodically to maintain alignment with your risk tolerance and financial goals.

Leveraging Tax-Efficient Investment Avenues
PPF and NPS contributions offer tax benefits while facilitating long-term wealth creation. By leveraging these tax-efficient avenues and maximizing your annual contributions, you can enhance your savings potential and accelerate progress towards your financial targets.

Evaluating Insurance Coverage
While insurance policies provide financial protection, it's essential to assess their adequacy in meeting your family's future needs. Consider reviewing your insurance coverage periodically to ensure it remains aligned with your evolving circumstances and goals.

Planning for Education Expenses
With a clear goal of accumulating ?2 crores for your children's education in the next 10 years, systematic investment planning is crucial. By allocating a portion of your monthly income towards education-specific investment avenues, such as diversified equity funds or education savings plans, you can capitalize on growth opportunities while mitigating risk.

Securing Retirement Income
Your aspiration for a ?2 lakhs per month pension upon retirement necessitates diligent retirement planning. By maximizing contributions to retirement-oriented investment vehicles like NPS and exploring supplementary retirement savings options, such as annuities or diversified income-generating assets, you can work towards securing a comfortable post-retirement lifestyle.

Building Emergency Reserves
Maintaining a robust emergency fund ensures financial resilience during unforeseen circumstances. With ?10 lakhs already allocated to FDs, continue to prioritize liquidity and accessibility in your emergency fund to address any unexpected expenses without disrupting your long-term investment objectives.

Conclusion
Dr. Shantanu, with your proactive approach and commitment to financial planning, achieving your aspirations is indeed feasible. By adhering to a disciplined investment strategy, regularly reviewing and adjusting your portfolio, and seeking professional guidance when needed, you can navigate towards a future of financial security and abundance.

Best Regards,

K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in

Ans: Yes it's possible to retire with 1 lakh per month but what about your other goals like education of both the children and marriage of both

Ans: At 36 years old, earning Rs 90,000 per month, and investing in mutual funds and the Provident Fund, you're building a solid foundation. With a manageable monthly expense of Rs 50,000, you are saving around Rs 40,000 per month. This surplus gives you a good start towards achieving your retirement goals.

Your current investments include:

Axis Bluechip Fund: Rs 1,000 monthly SIP, with a current value of Rs 70,000.
Axis Mid Cap Fund: Rs 1,500 monthly SIP, with a current value of Rs 60,000.
Nippon India Flexi Cap Fund: Rs 1,100 monthly SIP, with a current value of Rs 40,000.
SBI Nifty Small Cap Index Fund: Rs 2,000 monthly SIP, with a current value of Rs 29,000.
Provident Fund: Rs 20,000 monthly contribution, current value Rs 10 lakh.
Sukanya Samriddhi Yojana: Rs 2,500 monthly contribution for your daughter, current value Rs 1.18 lakh.
It is commendable that you are consistently investing in mutual funds and secured schemes like the Provident Fund and Sukanya Samriddhi Yojana for your daughter. These diversified investments provide stability and growth.

Now, you have set a target to retire in the next 10 years. Let’s assess the feasibility of that goal.

Assessing Your Retirement Timeline
With a 10-year timeline for retirement, you need to ensure that your investments can generate sufficient wealth to cover your post-retirement expenses. You need to account for the following factors:

Inflation: Prices will rise over time, and your expenses will likely increase. Even if your current monthly expense is Rs 50,000, it could double in 10 years due to inflation.

Post-Retirement Monthly Income: After retiring, you will need a regular income to meet your living expenses, cover healthcare, and support your family.

Longevity: You should plan for a retirement period that could last 30 years or more. This means your retirement corpus must last for a long time.

Existing Dependents: You have a wife, a 4-year-old daughter, and a mother who are financially dependent on you. This adds additional responsibility and expense post-retirement.

Given these factors, retiring in 10 years is possible if you carefully plan and optimize your investments.

Recommended Asset Allocation for Retirement
A balanced investment strategy is essential for achieving your goal of early retirement. Here’s a step-by-step approach to structure your investments:

Equity Mutual Funds: Continue investing in equity mutual funds for long-term growth. However, I would recommend focusing on a mix of large-cap, mid-cap, and flexi-cap funds.

Actively Managed Funds Over Index Funds: You currently have an investment in an index fund (SBI Nifty Small Cap Index Fund). Index funds tend to provide market-level returns, which may not be sufficient to meet your retirement goals. Actively managed funds offer the potential for better returns because fund managers can take advantage of market opportunities.

By switching from index funds to actively managed funds, you give yourself a higher probability of generating alpha (returns above the market average).

Provident Fund: Continue contributing to the Provident Fund, as it provides a secure, guaranteed return and will serve as a safe portion of your retirement corpus. The EPF also gives you tax-free returns, which are crucial for long-term security.

Increase SIPs Gradually: As your income grows or expenses reduce, try to increase your SIPs. A regular increase of 5% to 10% in SIP contributions can significantly enhance your retirement corpus over time.

Debt Funds for Stability: While equity funds are important for growth, debt mutual funds provide stability and regular returns. As you approach retirement, start allocating a portion of your savings to debt mutual funds. They will offer a regular income stream, while also reducing risk.

Debt funds are also tax-efficient as compared to traditional fixed deposits, especially for long-term capital gains.

Role of Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana (SSY) for your daughter is a great way to secure her future education. However, you should continue monitoring the progress of the SSY account and ensure that you’re on track to meet her future education needs.

The SSY will also give you tax benefits under Section 80C, making it an efficient investment option from both a financial and tax-saving perspective.

This is a long-term investment, and the current contributions look sufficient for your daughter’s needs. You can gradually increase your contributions as your income grows.

Why Direct Mutual Funds May Not Be Ideal
It is important to be aware of the distinction between direct funds and regular funds. Direct funds come with lower expense ratios but require hands-on management. If you opt for direct funds, you must actively monitor and adjust your portfolio.

However, investing through a Certified Financial Planner (CFP) via regular funds ensures professional advice. Your investments will be periodically reviewed and rebalanced to meet your goals. Although regular funds have a slightly higher expense ratio, they come with valuable services that can help you stay on track for retirement.

Thus, it’s better to invest through a CFP who can guide you in adjusting your portfolio as per market trends and your financial goals.

Consider Your Emergency Fund
It’s essential to maintain an emergency fund that can cover 6 to 12 months of living expenses. Given your current expenses of Rs 50,000 per month, aim to set aside around Rs 3-6 lakh in a highly liquid and safe investment, such as a liquid fund or a short-term debt fund.

This emergency fund will act as a buffer during unforeseen circumstances and help you avoid dipping into your long-term investments.

Final Insights
To retire in 10 years, you will need a substantial retirement corpus. This requires careful planning and disciplined investments. Here’s what you should do:

Continue investing in mutual funds, but shift focus towards actively managed funds.

Increase your SIP contributions as your income grows. You are currently saving Rs 40,000 per month, but try to save and invest more if possible.

Maintain a healthy balance between equity and debt investments. While equities will give you growth, debt will provide stability.

Keep contributing to Sukanya Samriddhi Yojana for your daughter’s future.

Avoid direct mutual funds unless you can actively manage the portfolio. Regular funds with a CFP offer better guidance.

Don’t forget to maintain an emergency fund.

With these strategies in place, you have a good chance of achieving your retirement goal in 10 years. But it’s important to continuously review and adjust your plan as you move closer to retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: Hello;

Your corpus adds upto around 2.27 Cr, which I have rounded off to 2.2 Cr.

This corpus if annuitized, may generate a post-tax monthly income of around 93.5 K.(6% annuity rate considered)
Add 52 K monthly income of your spouse.
So total monthly income may be around 1.45 L however your current monthly expenses are to the tune of 1.49 L.

This implies that you may have to cut down on few expenses and also you will have to pursue some alternate vocation, after quitting regular employment, for another 5-7 years to ensure monthly expenses are adequately funded plus some additional investments are made for future goals.

Best wishes;