Hi Sir,
I am 45 years old. Salaried 1.6 Lakhs per month. I have two kids -Son is 15 years old and daughter is 11 years old. I would like to retire at the age of 55 and allocate 1 crores for children education and marriage. I have own house and would like to have 3 crores as retirement corpus at the age of 55.
My current investments are - 40L in mutual fund , 9 Lakhs in stocks and 15 Lakhs in PF. Monthly contributing 15K in PF and having SIP of 60K per month in mutual funds.
Pls advise whether the current investments are sufficient to acheive my goal.
Thanks.
Ans: At 45, your commitment towards early retirement, children’s future, and disciplined saving is deeply appreciated.
Let’s evaluate your goals, current resources, and what changes you may need. This answer will help you take corrective steps and prepare a practical, structured plan.
Understanding Your Financial Vision
You wish to:
Retire at 55 with Rs 3 crores retirement corpus
Allocate Rs 1 crore for children's education and marriage
You are already:
Saving Rs 60K monthly in mutual funds (SIPs)
Contributing Rs 15K monthly into PF
Have Rs 64 lakhs accumulated already (MF + PF + Stocks)
Living in a self-owned house (no rent expenses in retirement)
These are solid and encouraging building blocks. However, the key question is — are these numbers enough?
Retirement Corpus Requirement Evaluation
Let’s begin with retirement.
You are targeting Rs 3 crores at 55
This needs to support at least 25-30 years of retired life
Your monthly income today is Rs 1.6 lakhs
Retirement expenses (without kids' education or EMIs) may be around Rs 70K to Rs 90K/month
Inflation will make these numbers higher by the time you retire
So, Rs 3 crores is a reasonable and safe retirement goal.
But let’s now assess if you are on track.
Reviewing Existing Investments and Monthly Contributions
You already have:
Rs 40 lakhs in mutual funds
Rs 15 lakhs in PF
Rs 9 lakhs in stocks
You are also:
Contributing Rs 60K/month into mutual funds
Contributing Rs 15K/month into PF
That’s Rs 75K/month of disciplined investing. Very strong effort.
Still, we must assess future growth of each instrument, taking inflation and realistic return assumptions.
Suitability of Investment Mix
Mutual Funds – Rs 40L corpus, Rs 60K SIP monthly
You’re doing well with equity mutual fund SIPs
Make sure these are active mutual funds and not index funds
Index funds lack downside protection and underperform in sideways markets
Actively managed funds provide flexibility in dynamic Indian markets
Focus on diversified equity mutual funds
You must have a mix of large cap, flexi cap, mid cap, and select sector/thematic
Avoid sectoral overexposure, stay away from new NFOs without track record
Stocks – Rs 9L
Direct stocks are high-risk and need continuous monitoring
Don’t treat this as core retirement corpus
Use stock portfolio for opportunity-based returns only
No need to increase stock exposure at this stage
PF – Rs 15L corpus, Rs 15K contribution/month
Good for stability and conservative fixed income
PF will provide a safe retirement cushion
But do not rely on PF alone for retirement corpus creation
Rate of return is fixed and may not beat long-term inflation fully
Children’s Education and Marriage Fund: Rs 1 Crore Target
Your son is 15 and daughter is 11.
So you will need:
Partial fund in next 2-3 years (son’s education)
Major amount by next 10-12 years (daughter’s education and marriage)
This means you need to create a parallel corpus of Rs 1 crore without disturbing your retirement savings.
Plan of Action:
Allocate a separate mutual fund folio for this goal
Do not mix it with your retirement investments
Choose balanced advantage, flexi-cap, and large-mid funds for this purpose
Withdraw from equity gradually once goal is near (start moving to short-term debt funds 3 years before need)
You may already be on track here if you dedicate part of the Rs 60K SIPs
But if all your SIPs are targeted for retirement only, you must either:
Increase your SIPs by Rs 15K–20K/month
OR
Allocate part of your stock portfolio and annual bonuses for kids’ goal
Evaluating SIP Sufficiency Towards Retirement
Rs 60K/month SIP in equity mutual funds for 10 years will build solid corpus only if:
Funds are actively managed by competent AMC
SIPs increase 10% every year (step-up SIPs)
You don’t stop SIPs even during market crashes
You rebalance regularly through a Certified Financial Planner
If you stay consistent, you are likely to reach Rs 3 crore, but without much surplus.
So, there is limited cushion in your current plan. You’re on track, but only marginally.
Required Adjustments for Better Safety
Increase Monthly Investment Gradually
From Rs 75K/month, try to increase SIPs by 10-15% yearly
Use salary hikes, annual bonus, or incentives to fund extra SIPs
Keep PF as it is; no need to increase PF contribution beyond current limit
Separate Goals and Tracking
Create two sets of SIPs: one for retirement, one for kids’ education
Avoid mixing funds or redeeming prematurely from retirement corpus
Avoid Index and Direct Funds
Direct funds lack advisory, tax planning, rebalancing, and behaviour control
You may miss correction opportunities or exit too late during volatility
Better to invest via regular plans with a trusted MFD or CFP
They offer active support, periodic alerts, tax strategy, and customised advice
Many investors earn less not because of bad funds, but due to bad timing and behaviour
Certified Financial Planner brings discipline and strategy in market fluctuations
Insurance and Risk Protection
You didn’t mention any insurance.
At 45 with family responsibilities, review:
Term insurance: Ensure Rs 1 crore+ coverage till age 60
Health insurance: Have Rs 10–20 lakh family floater + top-up
Critical illness cover: Optional but useful after 50
Without insurance, even the best investment plan can collapse under sudden medical or death risk.
Emergency Fund
You didn’t mention cash reserves.
Keep:
At least 6 months' expenses in liquid or ultra-short duration debt fund
Don’t keep this in equity or PF
You may use part of your PF loan provision only if very urgent
Investment Behaviour and Tax Awareness
Stay invested during downturns
Market cycles are natural
Many investors lose by stopping SIPs in bear markets
Those who stay invested enjoy strong recovery
Tax planning
Equity mutual funds LTCG: Only above Rs 1.25 lakh taxed at 12.5%
STCG in equity: Taxed at 20%
Debt funds: Taxed as per slab
Plan redemption accordingly with a Certified Financial Planner
Avoid real estate as an investment
Your house is an asset to live in, not a liquid financial tool
Real estate requires high maintenance, has low liquidity, and tax issues
Better to keep your future investments in mutual funds instead
Retirement Withdrawal Strategy
When you retire at 55:
Don’t withdraw entire mutual fund corpus
Keep equity portion invested and withdraw via SWP
Use bucket strategy:
First 3 years expenses in ultra short and liquid funds
Next 5 years in balanced or hybrid
Long-term part in equity
This protects you from selling during market crash
A Certified Financial Planner can set this up and track annually
Keep Reviewing Progress Every Year
Your current SIP discipline is very strong. But review:
Fund performance every 12 months
Goal progress every year
Increase SIPs gradually
Exit underperforming funds only under expert guidance
Avoid chasing star ratings or social media hype.
Key Action Points
Separate children’s corpus from retirement corpus
Increase SIPs by Rs 15K/month if possible
Avoid index and direct funds; shift to regular plans via MFD with CFP support
Keep investing during all market cycles
Maintain term and health insurance coverage
Create an emergency reserve now itself
Use a Certified Financial Planner for tracking and behaviour control
Do not withdraw from mutual funds prematurely
Review and rebalance annually
Finally
You are very close to being on track.
But only with continued discipline, increased SIPs, and expert guidance can you safely reach all goals.
You are doing far better than most. But don’t take comfort and stay static.
Make small changes now. They will give huge benefits later.
Retirement at 55 is fully possible — but only with strong control on investment behaviour and cash flow discipline. With a Certified Financial Planner by your side, you can fine-tune this further.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by cyril on Mar 05, 2024Hindi
