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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 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 04, 2025Hindi

Hi Sir, My income post tax, epf and nps deduction is arpund 2.1 lakh per month, other than that I get around 50k pm as bonus. I have montgly home loan emi of 65k ( 65 months remaining). My spouse earns 30k per month. In terms of savings, I have 44 lakh in epf, 13 lakh in MF, 5 lakh in ppf, 7.5 lakh in nps. My mf per month is 40k, ppf 6k, nps 20k, my wife saves 12k per month as emergency savings ( 2.5 lakh corpus so far). I try to save whenever I have some extra but not able to save more owing high cost of living and also some support to my elder parents. How should I plan so that i can save 5.5 cr to 6 cr in next 13-15 yrs

Ans: At 32, with a clear goal and disciplined savings, your target of Rs. 5.5–6 crore in 13–15 years is achievable. Let us build a 360-degree plan for you and your family.

? Income and Cash Flow Overview

– Your monthly income post all deductions is Rs. 2.1L.
– Bonus adds Rs. 50K per month on average.
– Spouse earns Rs. 30K monthly.
– Household income is Rs. 2.9L per month.

– Home loan EMI is Rs. 65K for 65 more months.
– You invest Rs. 66K per month in total.
– Household expenses and parental support are approx Rs. 1.3L–1.4L.

– You still retain a monthly surplus of Rs. 30K–35K.
– This surplus must be channelised better.
– After loan closure, your surplus will rise to Rs. 1L+ monthly.

? Existing Portfolio Review

– EPF of Rs. 44L is a strong base.
– MF value is Rs. 13L.
– PPF is Rs. 5L.
– NPS has Rs. 7.5L.
– Emergency fund of Rs. 2.5L built by spouse.

– Current investments per month are Rs. 40K MF, Rs. 20K NPS, Rs. 6K PPF.
– These are well distributed across tax-free and market-linked options.
– Total long-term assets stand around Rs. 70L.
– You’re on track, but portfolio needs better optimisation.

? Optimise Mutual Fund Strategy

– You are investing Rs. 40K monthly in mutual funds.
– Avoid direct funds if you are using them.
– Direct funds do not provide guidance or review support.

– They often result in wrong fund selection or exit timing.
– Many investors panic during market fall.
– Regular plans through Certified Financial Planner help avoid this.

– You get proper handholding, annual review, and portfolio tracking.
– Choose active funds only. Avoid index funds.
– Index funds are rigid, passive, and cannot respond to volatility.
– They lack human judgement.

– Actively managed funds perform better over 10–15 years.
– Use a mix of flexi-cap, large-and-mid cap, and hybrid funds.
– Review the allocation annually and adjust based on risk profile.

? NPS and PPF Allocation Strategy

– You invest Rs. 20K monthly in NPS.
– NPS gives tax benefit under section 80CCD(1B).
– Continue with this amount.

– Don’t depend only on NPS for retirement.
– NPS has annuity clause at maturity.
– That restricts flexibility.

– Keep 60% lump sum option in mind at exit.
– Choose equity-heavy allocation in NPS till age 45.
– After that, reduce equity portion gradually.

– PPF with Rs. 6K monthly is a good long-term buffer.
– You can use it for child’s education or last-phase retirement.
– Let it continue for full 15 years.

– After maturity, extend it in 5-year blocks if not required.

? Emergency Fund Strengthening

– Current emergency fund is Rs. 2.5L.
– This must be increased to Rs. 6–8L over next 12 months.
– It should cover 4–6 months of family expenses.

– Keep it in liquid funds or sweep-in FD.
– Do not use long-term products for this fund.
– This ensures immediate liquidity if needed.

– Once this is done, spouse can begin SIPs for secondary goals.

? Loan Repayment Strategy

– Your EMI is Rs. 65K monthly for 65 months.
– Principal balance should be around Rs. 30–35L.
– Don’t rush to prepay unless interest rate crosses 9%.

– You get tax benefit under section 80C and 24(b).
– The interest outgo will reduce with time.

– But keep a part of bonus aside to prepay if excess income arises.
– Aim to clear it in 5 years, not 65 months.
– That frees up Rs. 65K monthly for investments.

– Don’t use mutual fund corpus to repay the loan.
– Let your investment grow untouched.

? Goal Planning to Reach Rs. 5.5–6 Crore

– You have 13–15 years.
– You already have Rs. 70L saved.
– You are investing Rs. 66K/month, with Rs. 30K+ extra buffer.

– After loan closure, your investible surplus will cross Rs. 1L/month.
– Use this to increase SIP by 10–12% every year.
– This step-up strategy helps beat inflation and reach corpus faster.

– Split SIP between retirement and child education.
– Add equity-linked tax savings only where required.

– Use goal-based investing approach.
– Separate folios for each major goal.
– Track each goal twice a year.

? Bonus Allocation Planning

– Bonus of Rs. 50K monthly average should not be spent casually.
– Split it in 40:40:20 formula.
– 40% goes into prepayment or investment.
– 40% goes into SIP top-up or new fund.
– 20% can be used for family or leisure.

– This keeps financial discipline intact.
– Helps you fast-track wealth building in 15 years.

? Child Future Planning

– You must start goal-specific SIP for child education.
– Choose 15-year horizon fund with hybrid or large cap exposure.
– Step-up SIP every year to match inflation.

– Avoid investing in ULIPs or insurance-cum-investment products.
– Returns are low and costs are high.

– Also avoid child plans by insurance companies.
– Stick to mutual funds only for education goal.

– Begin SIP with Rs. 5K and raise it to Rs. 20K over 4–5 years.
– Keep this folio separate and track annually.

? Insurance Planning

– Buy term insurance if not already taken.
– Choose Rs. 1.5–2 crore cover based on your income.
– Premium is low if bought early.

– Avoid any endowment or ULIP policy.
– Insurance should not mix with investment.

– Buy a family floater health cover of Rs. 10–15L.
– Don’t depend only on employer health plan.

– Also get accident and critical illness policy.
– These are low cost and highly useful.

? Lifestyle Control and Expense Management

– Cost of living is rising.
– Avoid lifestyle upgrades beyond your means.
– Budget for all categories and stick to monthly limits.

– Review all recurring subscriptions.
– Cut down where needed.

– Don’t over-commit to relatives beyond your capacity.
– Support your parents with a fixed amount monthly.
– Avoid variable outflows that disturb your savings plan.

? Taxation Awareness

– Keep track of capital gains in mutual funds.
– LTCG on equity funds above Rs. 1.25L taxed at 12.5%.
– STCG is taxed at 20%.

– Debt fund gains taxed as per your income slab.
– Harvest long-term gains every year to avoid tax spike.
– Use tax-saving mutual funds wisely.

– File your returns on time.
– Declare all incomes, including bonus and rent if any.

? Long-Term Portfolio Simplification

– As portfolio grows, avoid fund clutter.
– No need to hold more than 5–6 mutual funds.
– Review them annually with help of Certified Financial Planner.

– Switch from underperforming funds as needed.
– Stay invested through regular plans only.
– Don’t be lured by direct plan returns shown online.

– Regular plans give emotional support and better retention during market falls.
– They ensure you don’t exit at wrong time.

– Use a goal-based tracker to see if you are on path.
– Adjust SIP amount and duration as needed.

? Final Insights

– You are doing better than most people at your age.
– You have good income, steady SIPs, and strong long-term view.
– Goal of Rs. 6 crore is within reach with disciplined planning.

– Clear home loan in next 5 years.
– Step-up SIPs every year.
– Keep emergency fund strong.
– Plan separately for child’s education and retirement.

– Don’t over-rely on NPS or PPF alone.
– Use mutual funds actively with Certified Financial Planner guidance.
– Avoid direct funds and index funds.
– Don’t get distracted by low-cost trends.

– Stick to asset allocation, review annually, and stay invested.
– That is the only formula for building serious wealth.

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

Asked on - Jul 15, 2025 | Answered on Jul 16, 2025

Sir sorry for confusion my age ia 43 not 32.

Ans: At age 43, your plan still looks solid — just needs sharper execution.

? Corpus Target Feasibility
– Rs. 5.5–6 crore in 12–15 years is still possible.
– But step-up SIPs become more important now.
– You’ll need to gradually raise investments to Rs. 1.2L/month in the next 3–5 years.

? Adjust for Time Compression
– Less compounding time means higher monthly commitment.
– Bonus, EMI savings after loan closure must go fully into SIPs.
– No delay or withdrawal from long-term investments.

? Stay Equity-Oriented for Growth
– Stick to equity mutual funds (no index, no direct).
– Use hybrid and flexi-cap mix with active management.
– Let NPS, PPF stay, but don’t depend on them alone.

? Retirement First, Then Child’s Support
– Prioritise retirement corpus before funding adult child’s future.
– Support education or early career, but not full lifestyle.
– Maintain a separate retirement SIP folio.

? Final Notes
– Rs. 6 crore is realistic if you grow SIPs each year.
– Discipline, yearly review, and fund selection are key now.
– Don’t reduce equity exposure too early.

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

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