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16 lakhs invested in Axis Midcap Fund - Advice needed

Ramalingam

Ramalingam Kalirajan  |9241 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 14, 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
karthikeyan Question by karthikeyan on Apr 12, 2025Hindi
Money

Hi I have invested about 16 lak in mirrae asset large and mid cap and current value is 21.5 lak , have stopped sip since a year. Pl advise is it advisable to keep the fund or to resume SIP or to switch other mirrae asset fund or to redem.

Ans: Your decision to review your Rs. 21.5 lakh corpus is very thoughtful.

You have already done the hard part — staying invested patiently. That deserves appreciation.

Let’s evaluate with a 360-degree view.



Review of Your Existing Fund

The large and mid cap category is built for balance. Growth + Stability.



This category holds 35% minimum in both large and mid caps. That ensures diversification.



Your investment in this fund has grown from Rs. 16 lakh to Rs. 21.5 lakh.



That means you are already sitting on long-term capital gains.



Stopping SIP a year ago was not a wrong move. But restarting must be evaluated now.



Past performance of this fund has been steady. Not flashy, but solid.



Performance vs peers is above average over 5 years. That shows it is consistent.



Portfolio quality is decent. Exposure to leaders in large caps and promising mid caps.



Fund manager is stable and has decent track record. There is no red flag.



Should You Stay Invested?

Yes, this fund is still investment-worthy if your goals are 5+ years away.



No urgent need to exit unless your goal is nearing.



If it aligns with your asset allocation, you can keep the corpus as is.



If you're satisfied with the growth and risk level, it’s a good hold.



Don’t churn just for the sake of change. That hurts long-term returns.



Should You Restart the SIP?

Restart SIP only if your overall asset allocation allows more equity exposure.



Also, check if your existing portfolio lacks this category.



If you already have large cap and small cap funds, this fits well in the middle.



If SIP was helping you average cost over time, restarting can be useful.



If this is your only mid cap exposure, SIP will give future compounding benefit.



Should You Switch to Another Fund?

Only switch if:

Performance is poor compared to category

Fund manager has changed recently

You need to change investment style



Your fund is not underperforming. So switching is not necessary now.



Review style overlap before switching. Don’t hold two funds with same portfolio.



Fund style in this case is mostly growth-oriented with some quality bias.



If you switch to a focused or contra fund, your overall portfolio risk may rise.



Should You Redeem Now?

No need to redeem unless you need the money for goals.



Redeem in small chunks only if rebalancing your portfolio.



Also, remember the new capital gains rules.



For equity funds, LTCG above Rs. 1.25 lakh will be taxed at 12.5%.



Plan redemption carefully in a financial year to manage taxes.



Disadvantages of Direct Funds

Direct plans look cheaper, but advice is missing.



You invest without regular review and support.



A certified financial planner or MFD gives timely rebalancing suggestions.



Regular plans have small cost, but offer long-term tracking and service.



Emotional mistakes are common in direct mode. Panic selling happens often.



Stick to regular plans with professional help for peace of mind.



Stay Away from Index Funds

Index funds may sound passive and safe. But they lack flexibility.



In a falling market, they continue holding bad companies.



No chance to exit underperformers like in active funds.



Fund manager cannot protect downside in index strategy.



In India, active managers still beat index in most time frames.



For goal-based investing, active funds offer more control.



Tax Aspects to Remember

Your gain from Rs. 16 lakh to Rs. 21.5 lakh includes long-term capital gains.



LTCG up to Rs. 1.25 lakh per year is tax-free.



Beyond that, 12.5% tax is applicable.



Short-term gains (less than 1 year) are taxed at 20%.



For future redemptions, plan in parts to reduce tax burden.



Portfolio Check Needed

Before any decision, check your total portfolio structure.



Do you have large cap, mid cap, flexi cap, and small cap balance?



Do you have thematic or sector funds? Those should be limited.



Ensure that you are not overexposed to just one AMC.



One fund house approach is risky if strategy underperforms.



Suggestions for Future Investing

Continue SIP in this fund if portfolio requires mid cap exposure.



Or, consider adding one flexi cap fund with value or blend style.



Keep portfolio to 4-5 funds. More than that reduces clarity.



If you want more growth, small cap fund can be added with caution.



Ensure that all funds are across different fund managers.



SIP of Rs. 10,000–15,000 per month is ideal to create Rs. 1 crore in 10–12 years.



Add lump sum only when market has corrected. Use STP if unsure.



Stay invested for full market cycles to see compounding power.



Asset Allocation Reminder

Keep 20–30% of your portfolio in fixed income.



Emergency fund and insurance should be ready before equity investing.



Don’t invest in equity if goal is less than 5 years away.



Avoid frequent fund switching. Let compounding work.



Review portfolio once in a year with your Certified Financial Planner.



Finally

Your decision to stop SIP and review is thoughtful.



The fund still has merit. No urgency to switch or exit.



Restart SIP if it helps you reach long-term goals.



Portfolio strategy should match your risk, goals, and horizon.



Don’t overcrowd your portfolio. Let each fund play a clear role.



Use professional guidance to avoid emotional decisions.



Focus on goal-based investing, not just returns.



Compounding needs time, patience, and discipline.



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.
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Hello sir, I have started SIP in motilal oswal Nasdaq 100 of 100 fund since last 6 months. Should I continue with this?
Ans: Hello Vaibhav,

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Ramalingam

Ramalingam Kalirajan  |9241 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 26, 2024

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Hello Sir, I am 45 years old and I have invested through SIP in the following funds since last 13 years. 1. HSBC Flexi Cap Fund - Regular Growth 2. Invesco India Midcap Fund - Regular Growth my question is should I continue with these funds or should I shift to any other fund ? If I should shift then which fund do you suggest ?
Ans: Understanding Your Investment Goals
At 45, your financial goals are likely focused on retirement planning and wealth preservation. It's crucial to align your investments with these goals.

Reviewing Your Current Funds
You've been investing in HSBC Flexi Cap Fund and Invesco India Midcap Fund for 13 years. These funds have given you exposure to both large-cap and mid-cap stocks.

Performance Evaluation
Evaluate the performance of these funds. Check their returns, consistency, and performance against benchmarks. If they have consistently outperformed, they might still be good choices.

Risk Assessment
Assess the risk associated with your current funds. Mid-cap funds can be more volatile compared to flexi-cap funds. Ensure this risk aligns with your risk tolerance.


You've done a commendable job by investing regularly for 13 years. It shows your discipline and commitment to building wealth.

Should You Continue or Shift?
Reasons to Continue
Consistent Performance: If your funds have shown consistent performance, you may want to continue.
Low Exit Load: Exiting a fund with a low exit load or after the exit load period can save you money.
Familiarity: You're familiar with these funds and their performance trends.
Reasons to Shift
Underperformance: If the funds have underperformed compared to peers, it might be time to switch.
Changing Goals: If your financial goals or risk tolerance have changed, you may need different funds.
Market Conditions: Adapting to changing market conditions can sometimes warrant a shift in funds.
Evaluating Alternatives
If you decide to shift, consider funds that align with your goals. Evaluate their performance, risk, and consistency. Diversify across large-cap, mid-cap, and multi-cap funds.

Advantages of Actively Managed Funds
Active Management Benefits
Actively managed funds have fund managers who make strategic decisions to outperform benchmarks. They can adapt to market conditions better than index funds.

Flexibility
Actively managed funds can move in and out of sectors or stocks based on performance and market trends. This flexibility can lead to better returns.

Disadvantages of Index Funds
No Flexibility: Index funds stick to a predetermined portfolio, regardless of market conditions.
Average Returns: They aim to match, not beat, the index, leading to average returns.
Limited Downside Protection: In a downturn, index funds fall with the market, without any active measures to mitigate losses.
Personalized Recommendations
Aligning with Goals
Select funds that align with your retirement goals and risk tolerance. Consider a mix of large-cap, multi-cap, and balanced funds for a diversified portfolio.

Regular Reviews
Regularly review and rebalance your portfolio. Adjust your investments based on market conditions, fund performance, and changes in your financial goals.

Consulting a Certified Financial Planner
Consult a Certified Financial Planner (CFP) for personalized advice. They can provide tailored recommendations based on a comprehensive analysis of your financial situation.

Diversifying Your Investments
Balanced Funds
Balanced funds invest in a mix of equities and debt. They provide stability and growth, making them suitable for retirement planning.

Large-cap Funds
Large-cap funds invest in well-established companies. They offer stability and consistent returns, ideal for conservative investors.

Multi-cap Funds
Multi-cap funds invest across large, mid, and small-cap stocks. They provide diversification and potential for higher returns.

Debt Funds
Debt funds invest in fixed-income securities. They offer stability and are less volatile compared to equity funds.

International Funds
Consider international funds for geographic diversification. They provide exposure to global markets and reduce country-specific risks.

Final Insights
You've done well by investing regularly for 13 years. Evaluating your current funds and considering alternatives is wise as you approach retirement. Systematic Withdrawal Plans (SWPs) offer many benefits, including higher returns, tax efficiency, flexibility, and inflation protection. Diversify your portfolio across balanced, large-cap, multi-cap, debt, and international funds. Regularly review your investments and consult a Certified Financial Planner for personalized advice. This comprehensive approach will help you achieve your retirement goals and financial security.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9241 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 28, 2025

Money
Hi I have invested about 16 lak in mirrae asset large and mid cap and current value is 21.5 lak , have stopped sip since a year. Pl advise is it advisable to keep the fund or to resume SIP or to switch other mirrae asset fund or to redem.
Ans: You have invested Rs 16 lakh in a large and mid-cap fund.

Your investment has grown to Rs 21.5 lakh.

You have stopped the SIP around a year back.

You are thinking whether to continue, switch, or redeem.

You have shown very good patience and investing discipline.

Performance Review of Your Fund

The fund has delivered good growth on your investment.

Large and mid-cap funds aim to balance growth and stability.

Such funds invest in top companies and emerging leaders.

Your corpus appreciation shows the fund has done its job well.

Impact of Stopping SIP

Stopping SIP one year back is fine if your goals were sorted.

SIPs help in rupee cost averaging over long term.

Not doing SIP for some time does not harm past investments.

Lump sum invested earlier will continue to remain invested.

Should You Redeem Now?

Redemption should be linked to goal, not just market levels.

If you need money in 1 to 2 years, you can plan phased redemption.

If you don’t need the money, stay invested for longer.

Equity gives best results when held for more than 7 years.

You have already shown good holding behaviour, keep it up.

Should You Switch to Another Fund?

Switching is advised only if fund consistently underperforms benchmark and peers.

In your case, since corpus grew well, no urgent switch is needed.

Large and mid-cap category remains a strong core holding option.

Instead of frequent fund changing, disciplined review is better.

Should You Restart SIP in Same Fund?

If your financial goals need more corpus, restarting SIP is good.

Same fund is fine if its management and strategy remain consistent.

Alternatively, you can diversify SIP into another flexi cap or large cap fund.

Diversification avoids dependence on a single fund.

Restarting SIP also brings back rupee cost averaging benefits.

Future Strategy for Your Investment

Continue holding your existing investment for wealth compounding.

Restart a SIP if your cash flows allow, linked to your goals.

Allocate new SIPs between existing fund and a second fund.

Review fund performance every 12 months for consistency.

When to Consider Partial Redemption

If your goal is due in next 2-3 years, start phased withdrawal.

Shift withdrawn amounts to debt or hybrid funds for capital protection.

Avoid full redemption at one time to save on taxes.

Mutual Fund Taxation Perspective

Selling units after 1 year counts as Long-Term Capital Gains.

Gains above Rs 1.25 lakh per year taxed at 12.5%.

If you redeem now, calculate gains and tax implications carefully.

Plan redemptions across financial years if possible to save tax.

Advantages of Staying Invested in Current Fund

Consistency helps compound returns effectively over time.

Large and mid-cap funds capture India's long-term growth story.

Switching funds frequently reduces overall return potential.

The fund manager expertise is already working for your money.

Disadvantages of Moving to Direct Funds

Direct plans leave you without Certified Financial Planner support.

Regular plans through MFD plus CFP guidance ensure better portfolio discipline.

Wrong direct investments can cause losses greater than saved commissions.

Personalised guidance adds huge value to your journey.

Drawbacks of Index Fund Investing

Index funds simply copy the index without active decision-making.

No flexibility to protect capital during market downturns.

Active funds adjust portfolio based on market outlooks.

Actively managed funds have consistently outperformed passive funds in India.

Certified Financial Planners prefer active funds for wealth-building goals.

When and How to Rebalance

Every year, check if fund is performing near its benchmark.

If underperformance persists for more than 2 years, think of switch.

Otherwise, stick to your plan for long-term wealth creation.

Rebalancing ensures you maintain your risk and return balance.

Risk Assessment for Future Planning

Large and mid-cap funds are moderately high-risk investments.

Your capacity to hold without panic during market fall is very important.

Avoid making emotional decisions during market volatility.

Asset Allocation Suggestion Going Ahead

Keep 70% to 75% exposure in equity mutual funds.

Allocate 20% to hybrid funds for goal nearing within 5 years.

Keep 5%-10% in short-term debt or liquid funds for immediate needs.

Importance of a Goal-Linked Strategy

Identify whether corpus is for home, retirement, or children education.

Each goal may need different asset allocation.

Planning goal-wise investment brings mental peace and better returns.

Reviewing Portfolio Annually

Check fund performance against benchmark and category average.

Adjust only if there is consistent underperformance.

Otherwise, let compounding continue peacefully.

Review with a Certified Financial Planner for best results.

Best Practices for Mutual Fund Investing

Remain invested through market ups and downs.

Avoid predicting market peaks or bottoms.

Step up SIPs yearly by 10% to counter inflation.

Link every investment to a goal for clarity and purpose.

Trust the long-term Indian economy and equity market story.

If You Have Any Insurance-Cum-Investment Plans

If you hold LIC, ULIP, or investment-cum-insurance policies, surrender them.

Reinvest maturity/surrender proceeds in mutual funds wisely.

Separate insurance and investment for better results.

Finally

Your growth from Rs 16 lakh to Rs 21.5 lakh shows smart investing.

Holding on patiently has rewarded you nicely.

No urgent need to redeem or switch from your current fund.

Restarting SIP in same or different fund can further strengthen your journey.

Plan all actions linked to your financial goals.

Avoid falling for direct plans or index funds without understanding the risks.

Trust the power of good mutual fund selection and professional advice.

Keep reviewing, stay patient, and wealth creation will happen naturally.

You are building a strong financial future with wise steps.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |9241 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 26, 2025

Asked by Anonymous - Jun 26, 2025Hindi
Money
Hi, I am a 36 year old female working in an IT company in India with in hand monthly salary of Rs. 70k. I am unmarried with no kids. I have approx. 34 lakhs in PPF, 14 lakhs in FD/RD, 2 lakhs in savings accounts, 7 lakh collected in PF (including Employee and employer contribution) along with own car. I don't have any existing loans. I want to plan for my retirement in the next 18-20 years by creating a portfolio of min. 5 crores by then. I have never invested in MF/SIPs earlier but want to start from Jul 2025 of 20k per month. l did some digging online and have come up with the below list of 5 MF SIP options along with 2 ETFs. HDFC Balanced Advantage Fund 20 percent, ICICI Prudential Blue Chip Fund 20 percent, Motilal Oswal Mid Cap Fund 20 percent, Parag Parikh Flexi Cap Fund 20 percent, Bandhan Small Cap Fund 10 percent, Sbi Nifty 50 ETF 5 percent, Motilal Oswal Nasdaq 100 ETF 5 percent. Please suggest if the above funds and distribution are suitable for me as a beginner with medium range risk appetite for long term wealth creation. Also, should I move some of my savings Bank money to liquid MF SIPs for better returns. I have found the below 3 funds after some research online. Can you suggest if these are good? Aditya Birla Sun Life Liquid Fund Direct Growth, Edelweiss Liquid Fund Direct Growth, Axis Liquid Fund Direct Growth. I have my job provided health insurance of 5 lakh currently. Do I need any other separate health insurance along with this for the future. Also, should I take a term insurance since I don't have any dependents as it will be kind of no use to me personally.
Ans: I appreciate your clear goals and initiative in starting mutual fund investments. Let’s build a 360-degree plan to help you reach a Rs.5 crore retirement corpus in 18–20 years, using disciplined investing with professional guidance.

Personal Financial Snapshot
You are 36 years old and work in an IT company.

Monthly in-hand salary is Rs.70,000.

Unmarried, no dependents.

Investments you currently hold:

PPF: Rs.34 lakh

FD/RD: Rs.14 lakh

Savings account: Rs.2 lakh

EPF: Rs.7 lakh (combined employee and employer)

You own a car and have no existing debts.

You plan to start mutual fund SIPs from July 2025 with Rs.20,000 monthly.

You have selected 5 mutual funds and 2 ETFs.

You also have some liquid fund options in mind.

Employer provides health insurance of Rs.5 lakh.

You have medium risk appetite and desire Rs.5 crore in retirement assets.

You have a strong foundation in PPF and EPF. Your plan shows initiative and diversification. Let’s refine and strengthen it with professional insight.

Retirement Corpus Target and Timeframe
Goal: accumulate Rs.5 crore over 18–20 years by age ~54–56.

You have ~Rs.57 lakh locked in long-term accounts (PPF+EPF+FD).

To bridge the gap, disciplined investing in growth assets is essential.

SIP of Rs.20,000 monthly is a great start, but may need to increase as salary grows to meet the target.

Equity exposure must be central.

Balanced debt exposure will cushion volatility.

We will align investments to your medium risk appetite.

Review of Proposed Fund Mix
You have chosen five mutual funds and two ETFs. Let’s evaluate them:

HDFC Balanced Advantage Fund (20%)

ICICI Prudential Blue Chip Fund (20%)

Motilal Oswal Mid Cap Fund (20%)

Parag Parikh Flexi Cap Fund (20%)

Bandhan Small Cap Fund (10%)

SBI Nifty 50 ETF (5%)

Motilal Oswal Nasdaq 100 ETF (5%)

Actively Managed Funds vs Index Funds
You include two ETFs which are passively managed and simply track an index.

Index funds lack active oversight— they only mirror the benchmark and cannot react to market changes or sector risks.

Such funds may underperform in downturns since they cannot adjust portfolio to reduce exposure.

Actively managed funds give professional managers flexibility to buy undervalued stocks or exit vulnerable ones.

They are better suited for long-term wealth creation in volatile markets.

Critique of Fund Mix
You have two large-cap funds — good for stability.

Mid-cap and small-cap allocations provide growth potential but carry higher volatility.

Flexi-cap fund offers dynamic allocation across market caps.

Combined equity allocation is strong at 90% which aligns with your long-term growth goal.

The 10% in passive ETFs reduces agility and flexibility due to lack of active management.

As a beginner, handling multiple active funds can be complex without professional support.

Without CFP guidance, direct plan risks include emotional shifts, overtrading, and poor rebalancing decisions.

Recommendation on Mutual Funds and ETFs
Preferred Strategy
Begin SIP in actively managed mutual funds only.

Avoid index ETF exposure of 10%, as you lose active management advantage.

Focus on 3–4 well-researched, high-quality active funds across large-, mid-, and flexi-cap categories.

Large-cap and flexi-cap active funds should form the core (~60–70%).

Mid-cap (~15–20%) offers growth potential.

Small-cap exposure can be moderate (5–10%), considering your medium risk profile.

Maintain balance and avoid overcomplicating the portfolio.

Role of Regular Funds via CFP
Choose regular plans via Mutual Fund Distributor with CFP credential.

Regular plans include CFP support for rebalancing and behavioural guidance.

They help you stay invested through market cycles.

Avoid direct plans as they lack ongoing expert support.

CFP will help you review performance and make timely allocation changes.

Suggested Revised Fund Allocation
This is an example portfolio aligned with your goal, risk profile, and desire to start with Rs.20,000/month:

Large-cap active fund: 35%

Flexi-cap active fund: 25%

Mid-cap active fund: 20%

Small-cap active fund: 10%

Debt/ELSS or balanced fund: 10%*

* Debt or balanced fund is important for diversification and risk management.

Liquid Fund Suggestions
You considered three liquid funds: Aditya Birla Sun Life Liquid Fund, Edelweiss Liquid Fund, and Axis Liquid Fund (direct growth).

Liquid funds are low-risk and offer better returns than savings accounts.

Since these are direct funds and you have limited mutual fund knowledge, CFP advice is important.

Regular plans for liquid funds offer oversight and ensure alignment with emergency fund strategy.

You can park an emergency fund equivalent to 6 months’ expenses in a liquid fund via regular plan.

Emergency Fund Setup
You currently have Rs.14 lakh in FD/RD.

Convert Rs.6–8 lakh into liquid mutual fund for emergency buffer.

Keep this fund accessible and do not treat it as investment for goals.

The rest of FD can be reallocated over time into debt and equity instruments systematically.

Insurance Coverage Planning
Health Insurance
Your employer provides a Rs.5 lakh health cover.

This may not be sufficient for emergencies or future inflation.

Consider adding a personal health top-up plan of at least Rs.10–15 lakh.

Include senior citizens — your parents — in a family floater or separate plan.

This protects your corpus from medical emergencies going forward.

Term Insurance
Though you have no dependents, term insurance can still be beneficial.

It can cover your own income liability or future commitments such as a home loan.

As mortgage and lifestyle grow, term cover ensures financial stability.

Discuss this with CFP to assess appropriate coverage level.

Debt and Alternative Instruments
With no loans now, you are in a strong position.

Beyond equity, consider investing a part of your savings in PPF, debt mutual funds, or corporate bonds.

This gives moderate returns with capital protection.

Allocate based on time horizon — debt for short-term goals and equity for long run.

As retirement nears, slowly shift some equity to debt for stability.

Tax Considerations in Mutual Funds
Equity funds: Long-Term Capital Gains (LTCG) above Rs.1.25 lakh taxed at 12.5%.

Short-Term Capital Gains (STCG) taxed at 20%.

Debt funds: taxed as per your income slab rate.

Use PPF for tax deduction under section 80C.

Plan redemptions to stay within LTCG exemption limit.

Regular CFP review will help manage tax efficiently.

Behavioural and Review Framework
Annual portfolio review is key to objective decisions.

CFP will guide you through portfolio rebalancing based on performance drift.

Avoid impulsive fund switching because of market noise.

With CFP advice, stay consistent with the long-term plan.

Increase SIP contribution as your salary grows, and review asset mix regularly.

Lifestyle and Financial Discipline
As an IT professional with good salary, rising income is likely.

Review goals yearly and raise SIPs accordingly.

Avoid lifestyle inflation—save first, spend later.

A disciplined plan will compound and grow your wealth substantially.

Path to Rs.5 Crore Corpus
Your existing PPF, EPF, FD amount will form a base corpus.

Equity SIPs driven by active funds and regular reviews will grow exponentially.

Debt and liquid components will cushion volatility.

With systematic monthly SIP, and incremental rises, hitting Rs.5 crore is realistic.

A long investment horizon allows compounding to work powerfully in your favour.

360?Degree Summary of Action Steps
Transfer Rs.6–8 lakh from current FD to liquid fund as emergency buffer.

Start Rs.20,000 monthly SIP via regular active mutual funds.

Adjust allocation: large-cap, flexi-cap, mid-cap, small-cap, debt

Avoid ETF and direct funds to maintain active fund benefits.

Buy personal health top-up insurance and parent cover.

Consider term insurance for liability cover even without dependents.

Rebalance annually with Certified Financial Planner review.

Increase SIP with income growth and stay focused till corpus goal.

Financial Milestones Over Time
Jul–Dec 2025

Build emergency fund.

Begin SIPs.

Allocate existing surplus.

2026–2028

Continue active SIP, review twice yearly.

Increase SIP amount with salary rise.

2028–2032

Portfolio grows strongly.

Mix remains active equity heavy.

Begin drinks of rebalancing with CFP.

2032–2038

Mid-cap and small-cap mature.

Debt allocation rises gradually.

Corpus reaches significant milestones.

2038–2045

Just before retirement age, slowly move to more debt.

Aim to reach Rs.5 crore by 2045–46.

Final Insights
You are in a strong place now. With Rs.34 lakh already in PPF and a disciplined SIP strategy, your goal of Rs.5 crore is achievable. Active mutual funds managed with CFP help can significantly outpace index-only options. Distributing across carefully selected categories protects against volatility and boosts growth. A robust emergency fund and adequate insurance will safeguard your path. Annual reviews and periodic investment increases will sharpen your plan. With consistent effort and CFP guidance, you can grow your wealth steadily and retire with financial strength.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |9241 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 26, 2025

Money
Pari Asked on - Jun 26, 2025 I am a 42 year old, have a dependend wife & 11 yr old daughter (6 STD). Earing 2.15 L per month. Monthly expenses 80k. No debts and staying in my own flat.& 1 more flat (earn rent Rs. 25k monthly), 2 lac as emergency fund in savings. I invested 1 lakhs in equity stocks, 16 lakhs in MF lumpsum(Current Value 25 lacs), 16 lac in FD and 12 lac in NSC. Till date my PF is 32 lacs. I pay 50k SIP monthly (current value 18 lacs), pay PPF 1.5 lacs(Current value 7.5 lacs), pay NPS 1 lac p.a.( Current value 4 lacs) and pay SSY 1.5 lacs p.a.( Current value 7.5 lacs) and PPF for wife 1 lacs p.a (Current value 4 lacs) and PPF for daughter 50k p.a.from 2023. Also Family medical insurance of 10 lacs.. and myself term insurance of 50 lakhs and LIC of 10 lakhs. Also I purchased LIC Child Money back of 10 lacs and SBI smart chap 5 lacs for my daughter education. I want to retire by 50? How to maximize my investments so that I can earn 2-3 lakhs per month after 50?
Ans: You are 42 and targeting retirement at 50. Your current income is Rs. 2.15 lakh monthly. You are disciplined, debt-free, and have strong diversified investments. You aim for a retirement income of Rs. 2–3 lakh per month. Let us work towards this from a 360-degree planning lens.

Understand What Rs. 2–3 Lakh Monthly Means After 50
You have 8 years to build your retirement corpus

With inflation, Rs. 2–3 lakh will feel like Rs. 3–4 lakh in today’s terms by 50

To generate this, your target corpus should be around Rs. 5–6 crore

This assumes 6–8% post-tax return from mutual funds and other instruments

The focus now should be on growing wealth faster with better strategy

Reassess and Reposition Investments for Higher Growth
You already have a solid investment mix. But some parts are slow-growing.

Equity Stocks – Rs. 1 lakh

Too low exposure

Stock selection is risky unless professionally managed

Don’t increase this part unless guided by a CFP

Mutual Funds – Rs. 43 lakh total (lump sum + SIPs)

This is your core wealth driver

Maintain a balanced mix of flexi-cap, mid-cap, and hybrid funds

Ensure you invest only in regular plans via CFP-guided MFD

Direct plans lack support, monitoring, and rebalancing

Step up SIP by 10% annually to reach faster compounding

Use STP to shift FD/NSC maturity into equity MFs gradually

FD – Rs. 16 lakh

FD returns are low and fully taxable

Keep only 6–9 months of expenses here for emergencies

Rest can be shifted to hybrid or debt MF

Use SWP later for tax-efficient retirement income

NSC – Rs. 12 lakh

Locked-in and taxed on interest

Don’t renew NSC after maturity

Shift to long-term equity or hybrid mutual funds post maturity

PPF – Rs. 7.5 lakh + Rs. 1.5 lakh yearly

Good tax-free long-term tool

Continue till retirement, then use for safety allocation

Don’t over-allocate; equity should remain dominant

NPS – Rs. 4 lakh + Rs. 1 lakh yearly

NPS gives exposure to equity and debt

Low cost and tax-efficient

Continue yearly contribution till 60

Avoid annuity at withdrawal; opt for max lump sum

SSY – Rs. 7.5 lakh + Rs. 1.5 lakh yearly

Excellent for daughter’s education/marriage

Safe and tax-free

Continue till maturity (21 years from opening)

PPF for Wife – Rs. 4 lakh

Continue with Rs. 1 lakh per year

Helps as secondary retirement corpus

PPF for Daughter – Rs. 50,000 yearly from 2023

Small but steady corpus for her education/marriage

Maintain till she turns 21

Review LIC and Child Plans
You hold the following insurance-cum-investment policies:

LIC endowment policy – Rs. 10 lakh

LIC child money back – Rs. 10 lakh

SBI Smart Champ – Rs. 5 lakh

These offer poor returns (~4–5%) and lack flexibility.

What to do now:

Surrender these policies if lock-in is over

Reinvest in mutual funds for your daughter’s future

One-time loss now is better than long-term drag

Keep only term insurance for protection

Rental Income Planning
You earn Rs. 25,000 rent from one flat.

Include this as secondary income post-retirement

Avoid considering it as primary income due to risk of vacancy

Don’t buy more real estate for rental purpose

Instead, reinvest sale value (if any) into mutual funds

Estate Planning for Daughter and Spouse
Ensure your investments are legally protected:

Update nomination in all investments

Create a registered Will

List out bank accounts, MF folios, insurance in one place

Inform spouse where to find these in your absence

Emergency Fund Enhancement
You have Rs. 2 lakh in savings as emergency fund.

This is low for a family of three

Target Rs. 5–6 lakh (6–9 months of expenses)

Use liquid or ultra-short debt funds for this corpus

Avoid using equity for short-term emergencies

Step-Up Strategy for SIP
You’re investing Rs. 50,000 in SIPs monthly.

Increase it by 10% yearly

From next year, make it Rs. 55,000

Then Rs. 60,500 and so on

This will help in reaching Rs. 5–6 crore corpus faster

Equity MFs, when managed well, beat inflation and FD easily

Avoid Index Funds, Direct Funds, and Annuity Products
Many make these common errors. Let us clarify:

Index Funds:

No active management during market fall

Cannot rotate sectors or protect downside

Underperform in sideways or volatile markets

Actively managed funds with expert MFD + CFP support offer better long-term results

Direct Funds:

No support, no rebalancing

You track portfolio alone

Without advisor, emotion-driven mistakes happen

Stick with regular funds via MFD for goal-linked planning

Annuities:

Poor post-tax return (around 4–5%)

Lock your money permanently

Avoid during retirement

Use SWP from mutual funds for flexible, tax-efficient cash flow

Retirement Corpus Distribution – Bucket System
At retirement, divide assets into three buckets:

1. Safety Bucket (0–3 years):

Keep Rs. 15–20 lakh for monthly withdrawals

Use liquid fund, debt MF, FD, PPF balance

2. Medium Term Bucket (3–7 years):

Rs. 30–40 lakh in conservative hybrid or balanced advantage funds

SWP can be used from here post retirement

3. Long-Term Growth Bucket (7+ years):

Rs. 2–3 crore in large-cap, flexi-cap, mid-cap funds

To ensure long-term income with inflation beating growth

Will also help leave legacy for your daughter

Post Retirement Cash Flow Strategy
From age 50, plan for cash flows like this:

Rs. 25,000 from rent

Rs. 75,000 from SWP in mutual funds

Rs. 25,000 from FD or PPF for safety

Balance from long-term hybrid and equity fund gains

This will give Rs. 1.25–1.5 lakh per month from age 50
With step-up SIP and equity growth, income can cross Rs. 2–2.5 lakh monthly
Target should be not to withdraw capital for first 5 years

Annual Portfolio Review
Each year, meet your MFD + CFP to review:

Fund performance and asset allocation

SIP step-up and withdrawal plan

Market trend impact on retirement corpus

Shift funds based on changing risk and return needs

Track daughter’s education goals and update plans

Life Insurance & Health Coverage Adequacy
You have:

Term cover – Rs. 50 lakh (not enough)

Health insurance – Rs. 10 lakh for family

Suggested action:

Increase term cover to Rs. 1–1.5 crore until age 60

Buy critical illness or super top-up of Rs. 10–20 lakh

This ensures wealth is protected from medical emergencies

Finally
You have laid a strong foundation. Your progress is inspiring.
To hit Rs. 2–3 lakh monthly income from age 50, do the following:

Step-up SIPs every year

Exit low-yield policies and reinvest

Reduce FD, NSC allocation and use mutual funds more

Build emergency fund

Review portfolio every year with MFD + CFP

Increase insurance cover

Create Will and update nominations

You can retire rich, peacefully, and confidently at 50.

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

...Read more

Dr Karan

Dr Karan Gupta  |74 Answers  |Ask -

International Education Counsellor - Answered on Jun 26, 2025

Dr Karan

Dr Karan Gupta  |74 Answers  |Ask -

International Education Counsellor - Answered on Jun 26, 2025

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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