Im 55 years and would like to retire now. have a current expense of around 75K/month. How much corpus is required and strategy of investment to cover this expenditure

Ans: Congratulations on reaching the milestone of retirement! It's a significant achievement, and it's essential to ensure your financial security during this new phase of life. With a current monthly expense of 75,000 rupees, determining the required corpus and investment strategy is crucial for a comfortable retirement.
To calculate the required corpus, consider the following steps:
1. Estimate Annual Expenses: Multiply your monthly expenses by 12 to calculate your annual expenses. In this case, 75,000 rupees per month amounts to 9 lakhs per year.
2. Account for Inflation: Factor in inflation to ensure your purchasing power remains intact throughout your retirement years. Considering an average inflation rate of 6-7% per annum, adjust your annual expenses accordingly for each year of retirement.
3. Calculate Corpus Needed: Use the concept of safe withdrawal rates to determine the corpus required to sustain your retirement expenses. A commonly used rule of thumb is the 4% rule, which suggests withdrawing 4% of your initial corpus annually to cover expenses. Divide your estimated annual expenses by 4% to calculate the required corpus.
For example, if your annual expenses are 9 lakhs, dividing by 4% gives a required corpus of 2.25 crores.
As for investment strategy:
• Diversified Portfolio: Allocate your retirement corpus across a diversified portfolio of assets, including equity, debt, and other income-generating instruments. Diversification helps spread risk and optimize returns over the long term.
• Income-Generating Investments: Prioritize investments that provide a steady stream of income to cover your expenses, such as dividend-paying stocks, bonds, and rental properties.
• Risk Management: As you transition into retirement, focus on preserving capital while generating sufficient income to meet your expenses. Balance risk and return by adjusting your asset allocation to align with your risk tolerance and financial goals.
• Regular Reviews: Periodically review your investment portfolio and withdrawal strategy to ensure they remain aligned with your financial objectives. Make adjustments as needed based on changes in market conditions, your personal circumstances, and your spending patterns.
By following a disciplined approach to investment and retirement planning, you can strive to achieve financial security and enjoy a comfortable retirement.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: You are 49 now, with monthly expenses of Rs. 1.65 lakh. You have no children's or parents' liabilities. You plan to retire in one year. Also, you and your wife are well-covered by a Rs. 75 lakh Mediclaim policy.

That’s a strong and admirable starting point. Let us now assess your retirement readiness. We will consider inflation, lifestyle, and long-term wealth management.

Let us start with the key areas you must evaluate before retirement.

Monthly Expenses and Lifestyle Assessment
Your current monthly expenses are Rs. 1,65,000. That is Rs. 19.8 lakh a year.

This includes only you and your wife. That simplifies planning.

It seems your lifestyle is stable and well-managed.

As inflation rises, your expenses will rise each year.

With average inflation of 6%, costs double in 12 years.

So, your Rs. 1.65 lakh today can become about Rs. 3.3 lakh per month in 12 years.

You must plan for these higher costs in future years.

Retirement corpus should grow steadily and beat inflation.

That way, your wealth can support you for 25+ years.

Evaluating Retirement Duration
You are retiring at 50. We will plan till 75 years.

But people are living longer now. Life expectancy is increasing.

So, it is better to plan till 85 or 90 years.

That means your money must last for 35 to 40 years.

But your question is for 25 years. Let us assess for 25 first.

Later, we will share how to stretch this for longer, if needed.

How Much Corpus Is Needed?
You will need income for 300 months (25 years × 12 months).

Each year, expenses will rise due to inflation.

So, in early years you may spend less.

But in later years, your expenses will be much more.

Your corpus must grow and give monthly income.

At the same time, the principal must not fall quickly.

A safe starting estimate: You will need around Rs. 8 to 10 crores.

This is to cover 25 years with rising expenses.

This estimate assumes post-retirement returns of 10% to 11%.

It also assumes inflation at 6% per year.

The more return your investments earn, the less corpus you need.

The less return, the more corpus you need.

Corpus must be invested smartly to earn and grow.

We will now see how to manage this corpus efficiently.

Key Factors That Affect Your Retirement Plan
Inflation: Your biggest hidden enemy. It silently eats wealth.

Longevity: If you live longer, you need more money.

Medical Expenses: You have good Mediclaim cover. That is great.

Unexpected Costs: Home repair, travel, or emergencies may arise.

Return on Investments: You must beat inflation every year.

Tax Efficiency: Returns must be tax-optimized.

Withdrawal Plan: Monthly withdrawal must be well structured.

Ideal Investment Strategy for Retirement
Your goal is simple: monthly income of Rs. 1.65 lakh, rising with inflation.

At the same time, principal must stay intact or reduce slowly.

Here is the strategy:

Invest the full retirement corpus in mutual funds.

Choose a mix of equity and hybrid funds.

Start with a 60:40 ratio. 60% equity, 40% debt/hybrid.

This gives growth and stability.

Every year, rebalance the portfolio.

If equity grows fast, shift some to hybrid for safety.

Use Systematic Withdrawal Plan (SWP) for monthly income.

Withdraw only what you need. Let the rest grow.

Avoid fixed deposits for full corpus. They do not beat inflation.

Keep only 6 to 9 months of expenses in FDs or liquid funds.

That acts as an emergency buffer.

You should invest through a Certified Financial Planner.

A CFP will help you create a strong plan.

They can also handle taxes, rebalancing, and fund review.

Why You Should Avoid Index Funds
Index funds follow the market blindly.

They invest in every stock, good or bad.

No fund manager takes active decisions.

During market fall, they fall fully.

They cannot protect your money in crisis.

They do not outperform consistently.

In retirement, you cannot afford sudden deep losses.

You need actively managed funds.

These funds are managed by experts.

They aim to protect during fall and grow during rise.

That is safer for long-term retired life.

Why You Should Avoid Annuities
Annuities give fixed income for life.

But they are not inflation protected.

If you get Rs. 1 lakh today, it stays Rs. 1 lakh forever.

After 10 years, that has much less value.

They also offer very low returns.

Most annuities lock your money permanently.

There is little flexibility and no liquidity.

You cannot exit midway if your needs change.

That is not ideal for someone in your situation.

You need a growing income, not fixed.

SWP from mutual funds is better than annuities.

Why You Should Avoid Real Estate
Real estate needs large one-time investment.

It has poor liquidity. You cannot sell fast.

Maintenance cost is high.

Rental income is often low and irregular.

Property disputes are common.

In retirement, you need easy-to-manage assets.

Real estate is not ideal for retirees.

Tax Planning for Retirement
SWP from equity mutual funds is taxed.

Long-term capital gains (LTCG) above Rs. 1.25 lakh yearly are taxed at 12.5%.

Short-term capital gains are taxed at 20%.

Debt fund withdrawals are taxed as per your tax slab.

With right planning, you can reduce tax.

You can stagger withdrawals to stay under limit.

Keep long-term view for most equity funds.

Let them grow for at least 3 to 5 years before major withdrawals.

A Certified Financial Planner will guide your tax planning.

Annual Review of Retirement Plan
Every year, review your expenses.

Match your SWP amount with your needs.

If inflation rises faster, adjust SWP upward.

Rebalance portfolio to maintain equity and debt mix.

Track returns of each fund regularly.

Remove underperformers after 2-3 years.

Add new funds with good consistency.

Review Mediclaim and emergency fund each year.

Make a will or estate plan.

Ensure all documents are updated and in order.

Other Key Tips for Retired Life
Don’t give large loans to friends or relatives.

Avoid co-signing loans for anyone.

Keep your lifestyle simple and meaningful.

Spend more on health and wellness.

Invest time in hobbies and charity.

Keep your money safe from online fraud.

Don’t chase high return risky investments.

Always discuss big financial decisions with your wife.

If needed, involve your Certified Financial Planner for support.

What If You Live Beyond 25 Years?
Your current plan is for 25 years.

But you may live till 85 or 90.

So your corpus must grow even after withdrawals.

Let at least 40% of your corpus stay in equity.

Equity gives long-term inflation beating returns.

If your corpus allows, reduce SWP amount after 75.

Or maintain same SWP, but reduce expenses.

This will help your corpus last longer.

Review the corpus regularly post 75 years of age.

Final Insights
You are well prepared for retirement at 50.

Rs. 1.65 lakh monthly expenses are realistic.

But inflation must be planned seriously.

You will need about Rs. 8 to 10 crore corpus.

Invest in equity and hybrid mutual funds.

Use SWP for monthly income.

Avoid index funds, annuities, and real estate.

Keep liquidity for emergencies.

Review portfolio and expenses yearly.

Involve a Certified Financial Planner for full planning support.

Your focus now should be wealth preservation and moderate growth.

This is a golden phase of life. Plan it smartly.

You deserve peace, dignity, and freedom in retirement.

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

Ans: You are doing the right thing by thinking ahead. Retirement is a new phase. With the right planning, it can be a peaceful one.

You are close to retirement. You wish to maintain a monthly lifestyle expense of Rs 2 lakh. That means Rs 24 lakh every year. You also have no EMIs. This is very good. Let’s plan from a 360-degree perspective.

Let’s assess your retirement lifestyle needs, required corpus, and ideal investments in simple steps.

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Understanding Your Retirement Lifestyle

You plan to retire in 3 months. This is a critical stage to plan calmly.

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Monthly expenses are Rs 2 lakh. This shows a dignified lifestyle with comfort.

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No EMIs means you start with a clean slate. Very positive foundation.

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You wish to retain the same lifestyle. That means the corpus must beat inflation.

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Post-retirement income should be regular, low-risk, and tax-efficient.

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Liquidity must be available. Health care needs can come up anytime.

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You must plan for at least 25-30 years post retirement. Life expectancy is rising.

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Expenses will rise every 5-6 years. So plan to beat inflation.

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Your focus should be on safety, steady income, and flexibility.

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Required Retirement Corpus: Assessment

Based on your Rs 2 lakh/month, yearly need is Rs 24 lakh.

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If we consider 25 years of retirement, that’s Rs 6 crore in today’s money.

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But we must consider inflation. In 5 years, Rs 2 lakh will feel like Rs 2.5–3 lakh.

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Hence, you need a larger retirement corpus. Around Rs 7 to 8 crore would be comfortable.

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This will help maintain your lifestyle and tackle medical or unexpected needs.

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If corpus is less than Rs 7 crore, then we need to plan smarter.

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Use diversification. Use multiple instruments. Create buckets based on time horizon.

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Don’t put all in one place. You need a good balance of risk and safety.

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Asset Allocation Strategy After Retirement

First focus is capital protection.

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Second focus is monthly income.

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Third focus is inflation beating growth.

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Split your corpus into 3 parts: Short term, Medium term, and Long term buckets.

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Bucket 1 – Short-Term (Next 3 years of expenses)

Allocate around Rs 70–75 lakh.

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Keep in bank FDs, sweep-in FDs, and ultra-short-term mutual funds.

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This part gives you monthly withdrawal facility. It is liquid and safe.

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Invest in FDs with quarterly interest payouts for steady flow.

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Choose banks with good credit ratings, preferably large private or PSU banks.

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Ultra-short-term mutual funds offer 6-7% and are more tax efficient.

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This bucket is not meant for growth. Only for stability and access.

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Bucket 2 – Medium-Term (4 to 10 years)

Allocate around Rs 2.5 to 3 crore.

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Invest in conservative hybrid mutual funds and balanced advantage funds.

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These funds adjust equity-debt mix dynamically. Less risky than equity funds.

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Returns can be in the 8–10% range. This beats inflation comfortably.

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Use SWP (Systematic Withdrawal Plan) to take monthly amounts.

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You can take Rs 40,000 to Rs 50,000 monthly from this bucket.

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SWP is more tax efficient than FD interest.

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Long term capital gains above Rs 1.25 lakh/year taxed at 12.5%.

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STCG taxed at 20%. So holding for long is better.

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Regular plans through MFDs with CFP support give better tracking and guidance.

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Avoid direct funds unless you can do in-depth review regularly.

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Regular funds give access to advisor support and portfolio rebalancing.

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Bucket 3 – Long-Term Growth (10+ years)

Allocate Rs 3 to 3.5 crore here.

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Use well-diversified actively managed mutual funds.

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Choose from large cap, large & mid cap, flexi cap, focused, or multi-asset.

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These funds help grow the corpus and beat long-term inflation.

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Avoid index funds. They blindly follow the index without active stock selection.

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Actively managed funds can protect better during market falls.

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A good fund manager makes selective calls. This gives better results.

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Rebalance your portfolio every 2 years with a Certified Financial Planner.

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Use dividend reinvestment or growth option. Withdraw only when needed.

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Don’t over-withdraw. This is your retirement anchor.

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PPF, Senior Citizen Saving Scheme, and Post Office Options

PPF is good, but has 15-year lock-in. At 60, liquidity becomes concern.

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If you already have PPF account, let it mature. Extend in blocks of 5 years only if needed.

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SCSS is suitable. Offers attractive interest. Limit is Rs 30 lakh per individual.

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Safe for a portion of retirement corpus. Good for capital preservation.

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Post Office Monthly Income Scheme can be considered. But rates change.

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Don’t lock too much in long-tenure options. You need liquidity too.

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Tax Planning After Retirement

Plan your income smartly to stay in lower tax brackets.

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FDs are taxed at slab rates. Plan accordingly.

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Mutual funds offer better tax efficiency.

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Use SWP from equity mutual funds for steady tax-friendly income.

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For debt mutual funds, taxation is as per your slab. Use with planning.

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Spread your withdrawals across financial years to manage tax.

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Submit Form 15H if your taxable income is below limit.

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Take help from your MFD or CFP for tax-efficient withdrawal plans.

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Health Insurance and Emergency Fund

Keep Rs 20 to 25 lakh separately for emergencies.

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Maintain health insurance even after retirement.

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Take super top-up plans if base policy is small.

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Don’t depend fully on employer’s insurance. It ends with retirement.

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Medical costs can wipe out corpus if not planned.

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Also keep Rs 3–5 lakh in savings account for minor needs.

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Estate Planning: Important But Often Missed

Prepare a clear and updated Will.

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Nominate family members in all financial accounts.

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Inform spouse or children about investments and bank details.

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Keep copies of all insurance, MF, FD and other assets safely.

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You are planning for your family’s future. Keep them informed.

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Investment Discipline and Annual Review

Review your plan every year. Retirement is not a one-time setup.

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Adjust for inflation and market movements.

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Rebalance portfolio with help of a CFP.

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Stay invested even during market falls. Don’t panic and withdraw.

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Withdraw only what is needed monthly.

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Maintain some cash buffer to avoid early redemption.

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Long-term growth needs patience and discipline.

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Avoid These Common Retirement Investment Mistakes

Don’t invest everything in FDs. Returns won’t beat inflation.

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Don’t put full amount in equity either. Risk is high.

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Avoid direct mutual funds. Regular plans give guidance and support.

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Don’t go for ULIPs, investment insurance, or traditional plans for returns.

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Don’t fall for high-return promises from unknown agents.

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Never lend big amounts to relatives without documentation.

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Avoid complex structured products. Keep it simple and liquid.

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Don’t ignore medical and long-term care planning.

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Avoid long lock-in plans. Flexibility is more important now.

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Don’t take new loans unless absolutely needed.

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Finally

Deepa, you are entering a new phase in life. A well-planned one can be peaceful.

You’ve lived responsibly. Now it is time to plan your wealth for protection and income.

Start with safety. Then add income-generating instruments. Keep some for growth.

Diversify using the 3-bucket method. Review every year. Stay informed and calm.

With the right approach, you can enjoy 25+ years of peaceful retirement.

Appreciate your clarity and foresight. More power to your next chapter.

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