I am 51 yrs old railway employee salary around 2 laks pm. I have 23 laks in my pf account , sip current bal 16.5 laks investing 42k in sip every month, sgb around 5 laks, pli monthly premium 10k. My retirement is in 2034. I am under old pension scheme. As per todays calculation after retirement I may get pension around 1.25 laks. Still 8th pay commission is coming. I have 2 daughters studying in intermediate.
How do I plan for their heigher studies, marriage, & retirement.
Ans: You are 51 years old and still investing with great consistency. You have built a PF of Rs 23 lakhs and SIP corpus of Rs 16.5 lakhs. Along with that, you have Rs 5 lakhs in Sovereign Gold Bonds. These numbers show strong effort. You are also maintaining Rs 42,000 SIP monthly, which is a very good habit. At the same time, your job gives stable income, and old pension scheme is an added safety net. Your PLI premium shows your sincerity towards regular savings. These efforts are the foundation. Now the challenge is to balance retirement, daughters’ education, and their marriage.
» Understanding your financial milestones
You have three major goals. First is your daughters’ higher education. Second is their marriage. Third is your retirement in 2034. You have less than 11 years for retirement. Your children’s higher education will come much earlier. Marriage expenses may also come before your retirement or closer to it. So the planning sequence is important. You must fund children’s education first. Then you must plan for marriage. Retirement corpus will be a long-term priority since pension will cover some expenses, but you still need a back-up.
» Children’s higher education funding
Higher education costs are rising faster than inflation. Engineering, medical, or overseas studies can be very expensive. Even within India, fees are high. Your daughters are in intermediate. Their higher education will start in 2–4 years. You must arrange funds for this in the short term. Equity mutual funds are not ideal for goals within 3–4 years because markets can fluctuate. You should keep some allocation in safer options for education goals. PLI is a long-term illiquid product, so it will not help much for education needs. Your SIPs can continue for other goals, but for education, you must start shifting a part of your investment towards safer debt-oriented mutual funds or bank deposits. Safety and liquidity will matter more here. The amount will depend on the type of course. Since pension is assured, you can afford to earmark part of your existing SIP corpus for this. Do not stop SIPs, but make clear goal buckets.
» Funding for daughters’ marriage
Marriage is an emotional and financial event. Costs can be flexible. It depends on your expectations. You have around 8–12 years to plan for it. That is a medium-term horizon. For this, a mix of equity and debt mutual funds can work. Your ongoing SIPs can be partly allocated for this goal. Sovereign Gold Bonds also can be a support. They mature after eight years. This matches your timeline well. Gold works well for Indian weddings as it has cultural importance. Your Rs 5 lakhs in SGBs can be earmarked for marriage funding. In addition, you can continue SIPs to accumulate for this purpose. For marriage, you may not need to take too much risk. A balanced approach between equity and debt funds will be appropriate.
» Retirement planning along with pension
You are fortunate to be under old pension scheme. Pension is expected around Rs 1.25 lakhs per month. With 8th pay commission, it may increase. Pension will give you a strong monthly income after retirement. Still, only depending on pension is not safe. Inflation and medical expenses can be unpredictable. You need a retirement corpus as backup. Your PF balance will keep growing till retirement. At maturity, it will add to your retirement pool. SIPs are already working to build wealth. These should be continued till retirement. Equity mutual funds are good for this long horizon of 10–11 years. They will help beat inflation. The discipline of Rs 42,000 SIP per month is very powerful. This corpus can become sizeable by 2034. That will support you and give comfort beyond pension. After retirement, you can use a systematic withdrawal plan from this corpus to supplement pension.
» Role of PLI in your plan
You are paying Rs 10,000 monthly towards Postal Life Insurance. This is more like a savings cum insurance product. The returns are usually low compared to mutual funds. It also locks up money. You already have old pension scheme. So insurance need is limited. If the PLI is mainly for savings, you must re-think. Continuing it till maturity is okay, but do not increase contributions here. For higher returns, SIPs are better. If PLI policy has good surrender value, you may even consider discontinuing and reallocating. But this requires careful calculation. For now, limit its role and focus more on mutual fund SIPs.
» Regular vs direct mutual funds
Many investors choose direct funds to save cost. But they miss expert guidance. Without advice, mistakes happen. Timing and wrong scheme selection can reduce returns. Regular funds through a Certified Financial Planner keep you disciplined. They guide on when to change, when to stay invested, and how to align with goals. This human support is very important in volatile markets. The cost difference is small compared to the benefits. Staying with regular funds through a Certified Financial Planner is always better for long-term wealth.
» Why not index funds or ETFs for you
Some people may suggest index funds or ETFs. But these funds just copy an index. They cannot protect in market downturns. They give average returns. They don’t provide any active strategy. Actively managed funds, on the other hand, have professionals who research and adjust portfolios. In a country like India with changing sectors and growth stories, active funds have greater scope to outperform. For your goals like retirement and marriage, active funds through SIPs can deliver better results. Index funds are too passive and not suitable when you want higher compounding.
» Taxation angle for your investments
When you redeem equity mutual funds, taxation applies. Short-term gains are taxed at 20%. Long-term capital gains above Rs 1.25 lakhs in a year are taxed at 12.5%. For debt mutual funds, both short-term and long-term are taxed as per your slab. Since you are in higher income bracket, taxation can affect debt fund returns. Plan redemptions carefully with your Certified Financial Planner to reduce tax burden. Use systematic withdrawals post-retirement for better tax efficiency. SGB interest is taxable, but capital gains on maturity are tax-free. That will help during your daughters’ marriage.
» Balancing children’s needs with your retirement
Parents often focus more on children’s needs. But retirement must not be compromised. Children can take education loans. Repayment is possible once they start earning. Marriage costs can also be moderated. But your retirement cannot be funded by loans. So always prioritise retirement while also supporting children. Your pension is strong, but corpus will add extra safety. Keep at least 60% of your future SIPs for retirement. Use the rest for marriage and education. This balance will give peace of mind.
» Inflation and rising costs
Education, weddings, and medical expenses are rising fast. A degree that costs Rs 10 lakhs today may cost double in 6–7 years. Medical expenses also increase every year. Pension will rise partly due to pay revisions, but inflation will still eat value. Only equity investments have power to beat inflation over long term. That is why continuing SIPs is essential. Even if markets fall, SIPs buy more units. Over time, this creates wealth. Do not stop SIPs at any stage.
» Creating separate buckets for goals
It is always useful to mentally separate your investments. One bucket for retirement. One for education. One for marriage. This way, you don’t mix and spend retirement money for other purposes. Use debt options for education bucket. Use a mix for marriage bucket. Use equity for retirement bucket. This bucket approach gives clarity. It avoids panic withdrawals. Discuss these allocations with a Certified Financial Planner. It will give direction.
» Building emergency fund and health cover
Apart from long-term goals, short-term safety is also important. You must have an emergency fund of at least 6 months’ expenses. This will help in case of sudden needs. Keep it in liquid fund or savings account. Health insurance is also crucial. Pension cannot protect against large medical costs. Make sure you and family have proper health cover. This will save you from dipping into retirement or education funds in case of hospitalisation.
» Your next steps
– Continue Rs 42,000 SIP every month.
– Allocate part of existing SIP corpus for education goal into safer funds.
– Use SGBs mainly for marriage funding.
– Keep retirement corpus growing through SIPs till 2034.
– Limit PLI role, do not expand there.
– Create three buckets: retirement, education, marriage.
– Take professional guidance from a Certified Financial Planner for allocation.
– Maintain emergency fund and adequate health insurance.
– Avoid direct funds and index funds. Stick to active regular funds.
– Review allocation every year and adjust if required.
» Final insights
You are on the right track. Your pension will give stability. Your savings and SIPs will give strength. Your daughters will get good education and marriage support. Your retirement will also be comfortable. The important part is to keep balance. Do not stop SIPs. Do not use retirement money for short-term goals. Take help from a Certified Financial Planner to fine-tune allocations. By doing this, you will meet all goals with confidence and peace.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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