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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 01, 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 01, 2025Hindi

Hi Sir, im 33 y.o with 13.7 LPA. im saving about 60k per month in diversified mutual funds through SIPs since 3 years and has a corpus of 50L. However we are expecting a child and may save about 40k per month from next year. If i want to retire by 45 with an independent house costing about 90 lakh at current inflation.. please suggest how and where to invest.TIA

Ans: You are doing very well for your age. At 33 years, with a good salary and Rs. 50 lakh mutual fund corpus already built, you are way ahead. You also have discipline in saving. That is the strongest foundation.

Now, your focus is early retirement at 45, and an independent house costing Rs. 90 lakh at today’s cost. You are expecting a child and expect to reduce your savings to Rs. 40,000 per month from next year.

Current Financial Strength
Age: 33 years

Annual income: Rs. 13.7 lakh

Current mutual fund corpus: Rs. 50 lakh

Monthly SIP: Rs. 60,000

Years of disciplined investing: 3 years

Expecting to reduce SIP to Rs. 40,000 from next year

Observations:

You have a strong habit of saving

Rs. 50 lakh at 33 is a solid start

Reducing SIP due to child is expected. That’s natural

But retirement by 45 needs planning in advance

Planning for a Rs. 90 lakh house is a major goal

Understanding Your Future Goals
You have two clear goals:

Retire at age 45

Buy a house worth Rs. 90 lakh (today’s cost)

Both are large and time-sensitive goals.

Retirement at 45 means you need funds to last for 40+ years.
House purchase must be done in 5–7 years ideally.

Let’s first estimate their importance in priority.

You can’t postpone retirement age later. Your body and mind decide that

You can postpone house or adjust its size. That is more flexible

You can also stay in a rented house at lower cost and invest balance

But retirement is a non-negotiable need

Evaluating Your Current Investment Style
You said you are investing in diversified mutual funds. That is the right approach. But you didn’t mention whether they are:

Active or index funds

Regular or direct plans

Growth or dividend option

SIPs through MFD or DIY

So, I will cover all aspects in this reply.

If you are investing in index funds:

You should shift to actively managed funds

Index funds mirror the market

They cannot protect in down markets

They also do not change sectors or stocks dynamically

Active funds have flexibility and better risk handling

For retirement, dynamic adjustment is important

If you are using direct mutual funds:

You are saving only in costs, but missing expert guidance

You are alone during market corrections

Direct plans don’t offer portfolio reviews or rebalancing

Investing through a Certified Financial Planner helps you with ongoing review

Regular plans with expert MFD + CFP advice protect your mental peace

If you are mixing dividend options:

Stop dividend plans

They reduce your compounding

Always use growth option for long-term wealth building

Suggested Investment Structure
From now till your retirement at 45, you have 12 years.

Here is how to plan your investments:

1. Core Portfolio – Retirement Goal

Keep most of your existing Rs. 50 lakh in equity mutual funds

Choose actively managed equity funds through regular plan

Allocate 60–70% in flexi-cap, large-mid, multicap categories

20–30% can be in aggressive hybrid funds for balance

Rebalance every year through your CFP’s advice

Start a separate SIP for retirement from Rs. 25,000 per month

This should run till age 45 without pause

2. House Goal – Medium-Term Goal

Do not plan to buy house from equity mutual funds

For house, start a separate SIP in low duration or medium duration debt funds

You can also use hybrid conservative funds here

Allocate Rs. 15,000 monthly toward this goal for 6–7 years

From year 8, start liquidating towards house buying

Plan house only when you have at least 70% in hand as downpayment

Don’t rush to take a housing loan

Avoid real estate as investment — use it only for need

3. Child Future Planning

Child’s education and marriage are major goals

Start a separate SIP for child education — Rs. 5,000 is enough for now

Invest in child-specific mutual fund categories with guidance

Review every 2 years

Don’t mix child fund with other long-term investments

Risk Protection Essentials
As your family is growing, your protection must grow too.

1. Life Insurance

Take term insurance of at least Rs. 1.5 crore

Premium will be low at age 33

Do not take ULIPs, endowment, or combo plans

If you hold LIC or investment-cum-insurance policies, surrender and reinvest in mutual funds

Only term plans give true protection at low cost

2. Health Insurance

Take family floater health insurance of Rs. 10–15 lakh

Don’t depend only on company policy

Take personal policy as well

Child must be included after birth

3. Emergency Fund

Save 6 months of expenses in a liquid fund

Keep it separate from mutual fund goals

This ensures stability during job change, health issues, or emergency

Tax Planning View
Your income is Rs. 13.7 lakh per year.

You fall in the higher slab

Maximise deductions under 80C with EPF, PPF, ELSS, or principal on home loan

Use 80D for health insurance premium

Use 24B only if you have a housing loan later

For mutual fund taxation:

LTCG above Rs. 1.25 lakh taxed at 12.5%

STCG taxed at 20%

Debt mutual fund gains are taxed as per slab

Always keep investment goal, duration, and taxation in sync

Your Certified Financial Planner will guide asset allocation based on this

Retirement Goal Considerations
Early retirement means:

You stop income at 45

But expenses continue till 85–90

Inflation eats into value each year

You need a growing income from your corpus

You also need flexibility during down markets

Your post-retirement funds must:

Provide monthly income

Grow above inflation

Last for 40+ years

Handle health emergencies

Be tax efficient

You must divide retirement funds in:

Monthly income bucket (debt + hybrid)

Growth bucket (equity mutual funds)

Emergency bucket (liquid funds)

Your Certified Financial Planner will help you create a withdrawal plan
This is very important once you reach age 45

Mental and Lifestyle Preparation
Early retirement also needs emotional planning:

What will you do after retirement at 45?

How will you stay active, healthy, and purposeful?

Where will you live?

Will you generate any passive income?

Will you start a part-time work or hobby income?

Financial independence is good. But purposeful living matters more.

You must discuss this with your spouse. Prepare a family vision for post-retirement life.

Final Insights
You are doing very well already. Your savings and discipline are great.

Now, you need clear separation of goals. Each goal must have a specific SIP.

Avoid mixing house goal with retirement or child education.

Shift your SIPs from index or direct funds to active regular plans through Certified Financial Planner.

This gives you human guidance, reviews, and risk management support.

Avoid real estate as investment. Focus on liquidity and flexibility.

You have 12 years to retire. That’s enough with proper planning.

Track goals every year. Rebalance with expert advice. Keep discipline.

You will reach financial independence with confidence and clarity.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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