Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |10894 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 29, 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

Asked by Anonymous - Sep 29, 2025Hindi

Hello Ramalingam Sir, My spouse and I, both aged 45, have a 16-year-old child and seek your expert advice on the following financial planning aspects: Retirement Corpus: We aim to retire by 55 (or 58 if necessary) and need a corpus to last till age 85. The expected monthly expense post-retirement is 6 lakhs, considering a 7% inflation rate. We currently estimate a minimum requirement of 20 crores and seek your advice to plan our retirement. Independence from Child: We want to ensure no financial dependence on our child. Wealth Transfer: Our goal is to transfer 100 crores to our child by age 85. Child’s Education: We estimate an educational expense of at least 80 lakhs over the next 7 years. Additionally, we do not wish to fund our child's marriage but plan to buy around 300 grams of gold for my spouse in the form of ornaments around 2030-2032. Current Expenses: Rent: 40K/month Household: 2.7 lakhs/month Loan: 1 lakh/month (ending June 2028) Insurance Premium: 3 lakhs annually (includes term life insurance of 2 crores for both and medical insurance of 25 + addtional 25 lakhs (without a claim) Savings: PPF: 31 lakhs (spouse), nil (self) EPF: 112 lakhs (both) NPS: 10 lakhs (spouse, 20K/month), 33 lakhs (self, 32K/month) LIC: 2 lakhs/year, premium payment till only 2031 (maturing to 108 lakhs in 2042) Mutual Funds: Approx. 135 lakhs (specific investments listed below) - Have prefered a high risk as of now with long term horizon. Aditya Birla Sun Life Equity Advantage Fund – Gr: 14K/month HDFC Mid Cap Opportunities Fund – Gr: 11K/month HSBC Midcap Fund – Gr: 14K/month Kotak Emerging Equity Fund – Gr: 14K/month Nippon India Large Cap Fund – Gr: 7K/month PGIM India Global Equity Opportunities Fund - Regular Plan – Growth: 14K/month Bandhan Small Cap – 30K/month (started June 2025) ICICI Prudential Large and Mid-Cap – Direct – Growth: 20K/month (started June 2025) Parag Parikh Flexi Cap – 20K/month (started June 2025) HDFC Flexi Cap – 20K/month (started June 2025) Earnings: Monthly Salary: 6.5 lakhs combined Rental Income: 22K/month Annual Bonus: 7 lakhs combined Personal Properties: A 3 BHK where my parents stay (loan cleared, we plan to join them in June 2028) A 2 BHK generating rental income of 22K/month with a 7% annual increase We would greatly appreciate your guidance on achieving these financial goals.

Ans: – You have planned your future goals very clearly.
– Your savings and investments at age 45 are very strong.
– You are already thinking of retirement, education, and wealth transfer.
– Your discipline in investing through mutual funds is very impressive.
– You are financially responsible and want to remain independent from your child.

» Current Financial Position
– Monthly salary income is Rs.6.5 lakh, which is very healthy.
– Rental income of Rs.22,000 adds diversification to income.
– Annual bonus of Rs.7 lakh strengthens your surplus further.
– Household and loan expenses are Rs.4.1 lakh monthly.
– Insurance cover and medical protection are already in place.
– You have significant assets across EPF, NPS, PPF, LIC, and mutual funds.

» Strengths in Your Portfolio
– EPF of Rs.112 lakh provides strong retirement base.
– NPS contributions add tax efficiency and long-term growth.
– Mutual fund portfolio is diversified across large, mid, small, flexi, and global funds.
– Insurance coverage of Rs.2 crore for each spouse ensures family protection.
– Medical insurance of Rs.50 lakh provides adequate health security.
– You have no dependency on child’s income in the future.

» Weaknesses in Your Portfolio
– Monthly expenses are very high relative to income.
– Loan EMI till 2028 adds pressure in short term.
– Too much exposure to mid cap and small cap increases volatility.
– You stopped ELSS, which earlier gave discipline and diversification.
– Gold purchase plan is not yet allocated separately.
– Retirement and wealth transfer goals are very ambitious and need stronger structuring.

» Retirement Corpus Planning
– Your target of Rs.20 crore by age 55–58 is correct.
– With 10–13 years left, high equity allocation is required.
– Current mutual funds of Rs.135 lakh are a good base.
– EPF and NPS will also grow steadily till retirement.
– Extra allocation from surplus must go into diversified equity funds.
– Large cap and flexi cap funds should form the retirement foundation.
– Mid and small cap exposure should be controlled to 25–30% only.

» Education Goal for Your Child
– Child’s education needs Rs.80 lakh in 7 years.
– Short horizon requires balanced allocation of debt and equity.
– Fully equity allocation is risky for this goal.
– Part of your existing mutual fund corpus can be earmarked.
– Use short-term debt funds for near-term safety.
– Equity component should be only 40–50% for this goal.

» Gold Purchase for Spouse
– You plan 300 grams of gold in 2030–32.
– This goal is 5–7 years away.
– Avoid buying physical gold now and locking capital.
– Start systematic investment in gold funds or sovereign gold bonds.
– This will match your timeline and preserve value.

» Wealth Transfer of Rs.100 Crore
– This is an ambitious but inspiring goal.
– Requires aggressive wealth creation with discipline.
– You already have high exposure to equity, which is needed.
– But risk must be balanced with periodic review by Certified Financial Planner.
– Your mutual fund SIPs and compounding can help in this direction.
– Regular monitoring, rebalancing, and consistent SIPs are key.
– Direct funds may appear cheaper, but they lack expert guidance.
– Regular funds through CFP ensure you remain aligned with this ambitious goal.

» Insurance and Protection Assessment
– Term insurance of Rs.2 crore each is adequate today.
– With growing wealth and expenses, review cover every 5 years.
– Health cover of Rs.50 lakh is good, but medical inflation is fast.
– Keep reviewing family floater cover for adequacy.
– Avoid any new insurance-linked investment plans.

» Cash Flow and Debt Management
– Current EMI of Rs.1 lakh ends in 2028.
– Once loan ends, your monthly surplus will rise sharply.
– Till then, control discretionary spending to ensure higher SIPs.
– Rental income will grow annually by 7% and will support household needs.
– By 2028, joining parents’ house will also reduce expenses.

» Role of Different Assets in Portfolio
– EPF: Safe, long-term retirement corpus, not to be touched early.
– NPS: Tax efficient, good for retirement, but partial liquidity only.
– PPF: Safe, guaranteed, but moderate returns, can be kept for stability.
– LIC: Traditional plan maturing in 2042, low returns, but can be continued till maturity.
– Mutual Funds: Core wealth creator, should remain main engine of growth.

» Why Not Index Funds
– Index funds simply copy the market and cannot beat returns.
– They give no flexibility in falling markets.
– Actively managed funds use research, timing, and allocation for better outcomes.
– Your goals are very ambitious, so active funds are more suitable.
– They can outperform the market and help achieve Rs.100 crore wealth transfer.

» Taxation Considerations
– Equity MF: LTCG above Rs.1.25 lakh taxed at 12.5%.
– STCG taxed at 20%.
– Debt MF: Gains taxed as per income slab.
– NPS is tax-efficient but has withdrawal restrictions.
– LIC maturity will be taxable depending on premium-to-sum-assured ratio.
– With careful tax planning, after-tax returns can remain strong.

» Direct vs Regular Mutual Funds
– Direct funds require you to track, monitor, and rebalance regularly.
– This takes time and market expertise.
– Regular funds with CFP involvement give disciplined reviews.
– CFP ensures asset allocation stays aligned with goals.
– Cost difference is small compared to long-term benefits of expert handling.

» Independence from Child
– Your planning ensures financial independence from your child.
– Sufficient retirement corpus and insurance protect family needs.
– Your child can focus on own career and life without pressure.
– Wealth transfer of Rs.100 crore will be a legacy, not a dependency.

» Final Insights
– Your financial base is strong, and goals are well defined.
– Retirement corpus of Rs.20 crore is achievable with focused investing.
– Education expense of Rs.80 lakh needs balanced planning across equity and debt.
– Gold goal must be set aside systematically in gold-linked products.
– Wealth transfer of Rs.100 crore requires high equity discipline and professional review.
– Insurance cover and health cover are sufficient but should be reviewed periodically.
– Avoid direct funds and stick with regular plans through a Certified Financial Planner.
– Control expenses till 2028 when EMI ends and surplus rises.
– With structured investing, your goals are realistic and achievable.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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.