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Ramalingam Kalirajan |10836 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 11, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by SB on Sep 10, 2025Hindi

Hello Nitin, I am 55 years old planning to retire by 60. I have 75 lakhs in PF (with a monthly contribution of 20,000), 33 lakhs in PPF, 45 lakhs in NPS (with a monthly contribution of 30,000). I also have 70 lakhs in FD, 57 lakhs in MF (with a monthly SIP of 75,000), 23 lakhs in Eauity, and 20 lakhs in corporate bonds. Apart from this I have 2 residential properties of market valuation around 1.5 cr each. My monthly expenditure after retirement should be around 1.5 lakh monthly. Is my corpus sufficient ?

Ans: You have done very well in building your wealth. At 55, you have strong assets and steady contributions. Retirement in five years is realistic for you. But you need a structured approach. Your corpus looks sizeable, yet spending Rs.1.5 lakh monthly for 25+ years needs careful planning.

» Current Financial Position

– PF of Rs.75 lakh with ongoing contribution ensures steady growth.
– PPF of Rs.33 lakh adds tax-free safety to your wealth.
– NPS with Rs.45 lakh and good contribution secures pension-like support.
– FD of Rs.70 lakh gives liquidity but moderate returns.
– Mutual funds worth Rs.57 lakh with strong SIP of Rs.75,000 give long-term growth.
– Direct equity of Rs.23 lakh adds risk but also growth.
– Corporate bonds of Rs.20 lakh balance safety and returns.
– Two residential houses of Rs.1.5 crore each add wealth, though illiquid.

» Corpus Requirement

– You want Rs.1.5 lakh monthly after retirement.
– This means Rs.18 lakh yearly.
– With 25–30 years retirement life, need large support.
– Inflation will raise costs every year.
– Your current assets may appear large, but inflation risk is real.

» Retirement Income Sources

– PF can be withdrawn partly and partly kept earning interest.
– PPF maturity can support early retirement years.
– NPS will force you to buy annuity partly, balance gives lump sum.
– FD and bonds can provide fixed income support.
– Mutual funds can give growth plus regular withdrawals.
– Equity gives long-term inflation protection.
– Rental income can be an additional support if you let out one house.

» Liquidity and Safety

– FD is liquid but taxable.
– PPF and PF are safe but locked until withdrawal.
– Corporate bonds give better returns than FD but carry credit risk.
– Equity and mutual funds are growth-oriented but volatile.
– Need proper balance between liquidity, growth, and safety.

» Why Not Index Funds

– Many people get attracted to index funds at retirement age.
– They think it is simple and safe.
– But index funds just mirror the market and cannot control downside.
– During retirement, market falls can hurt income flow badly.
– Actively managed funds have expert handling to reduce risk.
– Fund managers can adjust to protect senior investors.

» Why Not Direct Funds

– Some prefer direct plans to save cost.
– But saving 0.5% expense ratio is not big.
– Wrong timing or fund mismanagement can cost much more.
– A Certified Financial Planner guided regular plan gives discipline.
– Ongoing review and rebalancing protect from mistakes.
– Retirement money is sensitive, so regular plans are safer.

» Inflation Challenge

– Rs.1.5 lakh today may be Rs.3 lakh in 12 years.
– Healthcare inflation is even higher.
– Lifestyle costs also keep rising.
– Safe products like FD will not beat inflation.
– Growth assets must be part of your retirement mix.

» Role of Mutual Funds

– Mutual funds can generate long-term growth.
– They allow systematic withdrawal after retirement.
– Equity funds protect against inflation.
– Debt funds offer stability for short-term needs.
– Hybrid allocation balances both safety and growth.
– Withdrawals can be managed tax-efficiently with mutual funds.

» Tax Planning

– Equity fund LTCG above Rs.1.25 lakh is taxed at 12.5%.
– STCG on equity funds is taxed at 20%.
– Debt fund returns taxed as per your income slab.
– FD interest is fully taxable each year.
– NPS withdrawal is partly tax-free, partly taxable annuity.
– Proper mix of assets can reduce overall tax outgo.

» Withdrawal Strategy

– Do not withdraw large sums at once.
– Use bucket strategy.
– First bucket: 3 years expenses in debt or FD.
– Second bucket: medium-term in hybrid or debt funds.
– Third bucket: long-term growth in equity mutual funds.
– Refill buckets from growth when markets are good.
– This ensures steady income and reduced risk.

» Role of Insurance

– At this stage, term insurance is less useful.
– But health insurance is must-have.
– Medical costs can wipe savings fast.
– Take adequate cover even in retirement.
– Do not depend only on company health cover.

» Real Estate Position

– Two residential houses create wealth.
– But they are illiquid and cannot easily fund monthly needs.
– If one is rented, rent adds extra income.
– Do not depend on property price appreciation for retirement cash flow.
– Maintain property for legacy, but focus more on financial assets.

» Psychological Comfort

– You already built large corpus.
– That itself gives you confidence.
– But during retirement, market volatility can cause stress.
– Discipline and annual review will reduce fear.
– Focus on steady cash flow instead of chasing highest returns.

» Steps for Next Five Years

– Keep current SIP and contributions till retirement.
– Avoid big new commitments like real estate or loans.
– Increase equity allocation slightly for growth till 60.
– From 58 onwards, slowly move some equity to safer debt.
– Ensure emergency fund of at least 12 months expenses ready by 60.

» Finally

Your current assets are strong. With proper allocation, they can support Rs.1.5 lakh monthly. But you must manage inflation, taxes, and liquidity with care. Keep equity exposure for growth, debt for stability, and FDs for liquidity. Use mutual funds for systematic withdrawals. With discipline and Certified Financial Planner guidance, your retirement can be financially secure and stress-free.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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