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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 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 - Jul 11, 2025Hindi

My husband is 63 years old retired.He has 2.17 cr in mutual funds 15 lacs inscss,and 15 lacks inpmvy,and 60 laks in FD,4.5 lacs in poand gets pension of22000/, how can we sustain for another 20 years.and i am 55 years old ,ihave 1.20 cr in mutual fund and 30 lacs in ppf an4.5 lacs inpo.please advice how we both ca sustain another 20 years

Ans: Thank you for sharing such clear financial details.
You both have built a strong and diversified retirement base.
This shows great financial discipline and foresight.

Here is a detailed assessment of your portfolio and step-by-step guidance.

? Current Financial Strength

– Combined mutual fund corpus is over Rs 3.37 Cr.
– Fixed deposits total around Rs 60 lakhs.
– Government schemes (SCSS, PMVVY, PPF, PO) total around Rs 69 lakhs.
– Pension inflow is Rs 22,000 monthly for your husband.

This gives you income stability and liquidity comfort.
Your base is solid enough to sustain for the next 20 years.
But smart allocation and gradual withdrawal will be the key.

? Assessing Your Regular Income Need

– Let us assume your monthly expenses are around Rs 80,000.
– Yearly this becomes Rs 9.6 lakhs.
– Over 20 years, inflation-adjusted expenses can cross Rs 3 Cr.

So the focus should be on balancing:
Safety for today + Growth for tomorrow.

? Categorise Assets into Buckets

Segmenting helps reduce risk and improves income stability.
You can think in 3 layers:

– Safety bucket (next 3–5 years needs)
– Stable bucket (5–10 years)
– Growth bucket (beyond 10 years)

Let’s allocate your assets accordingly.

? Safety Bucket (Rs 80–90 lakhs)

This should cover regular income.
Suggested sources:

– SCSS: Rs 15 lakhs
– PMVVY: Rs 15 lakhs
– Fixed Deposits: Rs 40–50 lakhs
– Post Office deposits: Rs 4.5 lakhs
– Husband’s pension: Rs 2.64 lakhs/year

Together, this creates a stable income cushion.
You can expect Rs 6–7 lakhs yearly from this bucket.
Add pension to reach about Rs 9–9.5 lakhs yearly.

This covers your current lifestyle comfortably.

? Stable Bucket (Rs 70–90 lakhs)

This is for mid-term expenses in 5 to 10 years.
These can be:

– Low-volatility mutual funds (mix of large cap + hybrid)
– 5-year laddered FDs or debt mutual funds
– Consider withdrawing small part of equity mutual fund gains every 3–4 years
– Reinvest partially in safer options to refill the safety bucket

This helps balance return and liquidity.

Withdraw only what you need.
Don’t disturb this bucket unless the safety bucket runs low.

? Growth Bucket (Rs 1.3–1.5 Cr)

This is meant for growth over 10–20 years.
Mainly comprises your equity mutual funds.

– Maintain this for long-term inflation beating growth
– No need to withdraw this now
– Let compounding work here quietly

This will be your future backup in your 70s and 80s.

You have the luxury of not touching this till 2035 or beyond.
This is your silent protector against healthcare inflation and longevity.

? Withdrawal Strategy to Sustain 20 Years

A sustainable withdrawal strategy is essential.

– Withdraw only from SCSS, PMVVY and interest of FD in early years
– Delay withdrawing from mutual funds for 5+ years
– Withdraw not more than 4–4.5% per annum from total corpus
– Review portfolio and expenses every year

This helps avoid running out of funds early.

Avoid panic selling during market falls.
Your safety bucket ensures you don’t need to.

? Tax Efficiency Planning

Optimising taxes can extend the life of your corpus.

– Use Rs 1.25 lakh LTCG exemption from equity MFs every year
– Sell funds after one year holding period to enjoy LTCG rates
– Shift FD maturity into senior citizen saving options wherever possible
– Keep taxable income under Rs 3–5 lakh slab with 87A benefit

Mutual fund CG tax rules:
– Equity funds: LTCG above Rs 1.25 lakh taxed at 12.5%
– STCG taxed at 20%
– Debt funds: Taxed as per slab

Keep track of redemption timing to manage taxes smartly.

? Insurance & Health Planning

Do not ignore medical and longevity risks.

– Ensure both of you have a family floater health insurance
– Add critical illness or top-up plans if possible
– Keep Rs 5–7 lakhs cash equivalent for sudden medical needs
– Avoid depending only on FDs for medical emergencies

This protects your growth corpus from being drained.

Also consider creating a medical fund from debt MF or FD interest.

? Emergency Fund Allocation

Despite having FDs, keep a separate fund.

– Allocate Rs 3–4 lakhs in a sweep-in FD or savings account
– Use this only for unexpected urgent needs
– Replenish it if you ever withdraw from it

This brings peace and avoids panic withdrawals from long-term assets.

? Role of PPF and Post Office Investments

These are safe and tax-efficient.

– Your PPF (Rs 30 lakhs) can be extended in 5-year blocks
– Let it grow untouched till 65+ age
– Use it later as a tax-free income source
– Post Office deposits are good for capital safety

No urgency to withdraw from these now.
Keep these as a late retirement cushion.

? Don’t Chase Direct Mutual Funds or Index Funds

Avoid direct plans and index funds in retirement.

– Direct plans give no support or review by a CFP
– In retirement, you need guidance, not just products
– Index funds don’t protect in market falls
– Active funds are better for risk-managed wealth

Stick with regular plans and stay in touch with a Certified Financial Planner.
He or she can rebalance your portfolio every year for safer retirement.

? Avoid Annuities or Insurance-Based Investments

Do not lock large amounts into annuities.

– Low returns
– No liquidity
– No inflation protection
– Not suitable for long-term planning

You already have PMVVY and SCSS which serve the same role but better.

ULIPs or investment-cum-insurance are also not suitable now.
They block money and give poor returns with high charges.

? Nomination, Joint Holdings, and Will

Retirement planning is not complete without documentation.

– Make sure all investments have updated nominations
– Keep most holdings in joint names with ‘Either or Survivor’
– Prepare a simple Will to avoid future confusion
– Talk to your children about your financial wishes

Peace in retirement also comes from clear paperwork.
This ensures your assets reach the right hands smoothly.

? Review Yearly and Keep a Dashboard

Track your finances every 6–12 months.

– Keep a simple Excel sheet for assets and withdrawals
– Monitor fund performance and rebalance if needed
– Avoid panic actions during market correction
– A CFP can help monitor changes and adjust your buckets

Even in retirement, periodic review gives control and peace.

? Finally

You already have Rs 5 Cr+ in total retirement corpus.
This is more than sufficient for a 20–25 year retired life.

But safety lies in smart execution and disciplined withdrawals.

Don’t chase high returns.
Focus on consistent income, tax planning and capital protection.

Let your mutual funds grow silently in the background.
Use safe options for regular cash flow.

Avoid direct plans, index funds, or complex products.
Stick to regular plans and work with a Certified Financial Planner.

That’s how you’ll enjoy financial peace, dignity, and independence.

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.