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Dev Ashish  | Answer  |Ask -

MF Expert, Financial Planner - Answered on Dec 28, 2023

Dev Ashish is a fee-only SEBI-registered investment advisor with over 15 years of active experience in the stock market. In 2011, he founded StableInvestor, a platform for personal finance and financial planning.
He provides professional fee-only investment advisory services to small and high networth individuals in order to help them achieve their financial goals.
Ashish's views are regularly published in national business publications. He has an MBA degree from NMIMS, Mumbai and also holds an engineering degree.... more
Asked by Anonymous - Dec 25, 2023Hindi
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Sir, My monthly income is around 2,00,000 per month and monthly expenditure around 45000. I'm 45 and want to achieve retirement goal in 60. How much asset allocation do you think is right for medium risk to invest in equity, debt, SGB, reit and others etc. I am thinking of starting investing in a large cap index and a flexicap. For protection of volatility, and less risk I should invest in debt mutual funds or should go for nps? Pls suggest any other option you have.

Ans: We dont have information about your risk appetite. But assuming that it is at least moderately aggressive, then for a 15-year remaining investment horizon for retirement goal, you can have an allocation of 60-65% Equity, 30% in debt, 5% in gold. For equity allocation, your choice to start with largecap index fund and a flexicap fund is good enough. For debt for retirement goal, first try to maximize tax-free limit of EPF, and then PPF, and then look at debt mutual funds or NPS (G+C).
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 Anil Ji i am 58yr of age retiring in Dec 24. My family is myself wife 55yr , unmarried daughter 29yr working since last four yr in reputed MNC with good salary and career prospects. My investment are 1.09 cr of equity, 2.37cr MF equity, 0.56cr MF Debt funds. 65lacs Ulip all premium paid maturing in sept 24. FD in bank 20lacs. Total of 4.82cr. Own 3 Bhk apartment in Metro city where i live approx value 1.45cr. No loans no debts. My question is what should be my asset allocation after retirement my monthly requirement is 1.25lacs and one time expense of daughter marriage in next 1-2 yrs of 30lacs. Thanks
Ans: I appreciate the clarity and the thoroughness with which you've provided your details. It sounds like you have done a fantastic job building your assets. Let's explore how to best allocate your resources after retirement to meet your needs.

Understanding Your Financial Position
Firstly, congratulations on reaching a well-diversified asset base. Here's a summary of your assets:

Equity Investments: Rs 1.09 crore
Mutual Funds (Equity): Rs 2.37 crore
Mutual Funds (Debt): Rs 0.56 crore
ULIP: Rs 65 lakhs (maturing soon)
Fixed Deposit: Rs 20 lakhs
Real Estate: 3 BHK apartment (Rs 1.45 crore)
Your total financial assets come to around Rs 4.82 crore. You have no loans, which is excellent. Your monthly requirement is Rs 1.25 lakhs, and you have a one-time expense of Rs 30 lakhs for your daughter's marriage.

Setting the Foundation: Emergency Fund
An emergency fund is crucial for financial security. Ensure you have at least 6 to 12 months of expenses in a liquid, low-risk account. This fund should cover unexpected expenses without disturbing your investments.

Recommended Emergency Fund: Rs 15 lakhs (12 months of expenses)
Asset Allocation Strategy Post-Retirement
Let's break down a suitable asset allocation strategy:

1. Debt Instruments for Stability
Debt instruments provide stability and regular income. They are less volatile and suitable for your monthly needs. Considering your requirement of Rs 1.25 lakhs per month, prioritize these investments:

Mutual Funds (Debt): Rs 56 lakhs already allocated. Consider adding more to this to ensure stable returns.
Fixed Deposit: Rs 20 lakhs is a good buffer. Keep this as part of your emergency fund and for short-term liquidity.
2. Equity Investments for Growth
Equity investments are essential for growth and to combat inflation. However, post-retirement, the exposure should be balanced:

Equity Investments: Rs 1.09 crore
Mutual Funds (Equity): Rs 2.37 crore
While these investments have higher returns, they come with higher risks. Consider reallocating some equity to balanced or conservative funds to reduce volatility.

3. ULIP as a Diversification Tool
Your ULIP maturing soon will provide a lump sum. ULIPs combine insurance and investment but may not always offer the best returns. Since all premiums are paid and it’s maturing, use the maturity amount wisely.

ULIP Maturity: Rs 65 lakhs. Reinvest this in safer debt funds or balanced funds for moderate growth with lower risk.
Creating a Monthly Income Stream
To generate Rs 1.25 lakhs per month, a mix of Systematic Withdrawal Plans (SWPs) from mutual funds and interest from fixed deposits can be considered.

Systematic Withdrawal Plan (SWP)
SWP allows you to withdraw a fixed amount from mutual funds periodically. This can provide regular income without selling your investments entirely.

SWP from Debt Mutual Funds: Utilize debt funds to withdraw a steady amount monthly.
SWP from Balanced Funds: For a balanced risk approach, include some withdrawals from balanced funds.
Interest from Fixed Deposits
Interest from fixed deposits can supplement your monthly income. Ensure the interest aligns with your monthly needs and reinvest any excess for future use.

Planning for One-Time Expenses
For your daughter’s marriage, earmark Rs 30 lakhs from your existing assets. Consider using the maturity proceeds of your ULIP or liquidating some of your fixed deposits for this purpose.

Adjusting Your Portfolio
Rebalancing Equity and Debt
After ensuring your monthly needs and one-time expenses are covered, rebalance your portfolio to maintain a suitable risk level. Post-retirement, a common approach is to have a 40-60% allocation in equities and 60-40% in debt:

Equity Allocation: Aim for around 40% of your portfolio.
Debt Allocation: Aim for around 60% of your portfolio.
This balance provides growth potential while ensuring stability and regular income.

Diversifying within Debt and Equity
Within debt and equity, diversify to manage risk better:

Debt Funds: Include short-term, medium-term, and income funds.
Equity Funds: Include large-cap, mid-cap, and balanced funds.
Tax Planning
Efficient tax planning ensures you retain more of your income. Post-retirement, tax planning involves:

Tax-Exempt Instruments: Use the tax benefits of PPF and other exempt instruments.
Long-Term Capital Gains: Equity investments held for over a year have favorable tax treatment.
Tax-Efficient Withdrawals: Plan withdrawals from funds in a tax-efficient manner.
Monitoring and Review
Regular monitoring and review of your investments are crucial. Assess your portfolio at least once a year and adjust as needed to align with your goals and market conditions.

Genuine Compliments and Empathy
You've done a remarkable job in securing a diversified asset base. Managing your finances prudently has given you a solid foundation. Your focus on family and ensuring their well-being is commendable. It’s understandable to want to ensure your assets are well-managed post-retirement. I'm here to help guide you through this transition.

Final Insights
Retirement planning is about securing your future while enjoying the present. You've built a strong portfolio, and with the right adjustments, you can ensure a stable, comfortable retirement.

Emergency Fund: Keep Rs 15 lakhs for unexpected needs.
Debt Instruments: Use debt funds and FDs for stability and regular income.
Equity Investments: Maintain equity for growth but balance with lower-risk options.
ULIP Maturity: Reinvest in safe or balanced funds.
SWP: Generate monthly income through systematic withdrawals.
Tax Planning: Optimize withdrawals to minimize tax impact.
By following these steps, you can maintain your lifestyle and meet your financial goals post-retirement. Regular review and adjustments will keep you on track. Wishing you a fulfilling and stress-free retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

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Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 06, 2024

Asked by Anonymous - Nov 05, 2024Hindi
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Hi Sir, I am seeking your expertise to review my current asset allocation strategy, as I am planning for a 10-year investment horizon. I am currently 48 years old, Moderate risk taker, looking 13-14% CAGR, and would like to ensure that my portfolio is well-structured to meet my long-term financial goals. Proposed Target Asset Allocation: (A) -Equity Instruments: 45% (a)-Direct Stocks: 10% (Large Cap / Blue Chip Stocks: 3%, Mid Cap Stocks: 2%, Small Cap Stocks: 2%, Solar/Green Fuel Stocks: 1%, AI / Semiconductor / Data Storage / EV Stocks: 1%, FMCG Stocks: 1%. (b). International Equity: 5%). (c). Mutual Fund Equity: 30% (Large Cap Funds: 9%,Mid Cap Funds: 6%,Small Cap Funds: 5%,Flexi Cap Fund: 3%,Multicap Fund: 2%,Aggressive Hybrid: 2%,NPS (Equity): 3%) (B). Debt Instruments: 40% ( FD/TFD: 40%, KVP: 8%, NSC: 6%, Debt Mutual Funds: 6%, NCD/Corporate Bonds: 2%, PPF: 2%, NPS (Debt): 2%) (C). Real Estate: 10% (Land/Forms: 7%, House/Flats: 3%) (D). Gold: 5% (Physical Gold: 5%, Sovereign Gold Bonds: 2%, Gold ETF: 2%) Questions: 1. Does this allocation appear appropriate for my age and risk profile? 2. Are there any modifications you would recommend to enhance potential growth or reduce risk? How does this allocation align with current market trends, particularly in sectors like green energy and technology? Thank you in advance for your insights and recommendations! Best regards,
Ans: Let’s assess each section of your proposed strategy, along with suggestions to help optimise your returns within your moderate risk tolerance and 10-year horizon.

1. Equity Instruments - 45%
Your equity allocation is well-diversified across direct stocks, international equity, and mutual funds. Let’s examine each segment:

Direct Stocks (10%): Holding 10% in direct stocks across large, mid, and small-cap stocks, as well as thematic sectors like green fuel and technology, adds growth potential. However, actively monitoring individual stocks and staying updated on market conditions is crucial for these segments.

Considerations: Thematic investments (e.g., solar, AI, semiconductor, and FMCG) add future-focused growth potential but can be volatile. Consider reducing thematic stocks slightly if you prefer a more conservative approach. A 7-8% direct stock allocation could still capture growth while managing risk.

International Equity (5%): Exposure to international equity is excellent for diversifying risk and gaining from foreign markets. Focus on countries with strong technology and industrial sectors, such as the US or emerging markets.

Mutual Fund Equity (30%): Your mix of large-cap, mid-cap, small-cap, flexi-cap, multi-cap, and aggressive hybrid funds provides balance. However, it’s advisable to stick with regular funds through an MFD, especially if you lack time for active tracking. Regular funds offer valuable guidance through certified financial planners, which may help in uncertain markets.

2. Debt Instruments - 40%
Debt provides stability to your portfolio. The allocation across fixed deposits, debt mutual funds, KVP, NSC, NCDs, PPF, and NPS (debt) is balanced.

Fixed Deposits and Term Deposits (20%): FDs offer security but relatively lower returns, especially given rising inflation. You could reduce FD holdings and allocate more to debt mutual funds for potentially higher returns without excessive risk.

KVP, NSC, and PPF: These are secure instruments offering fixed returns and tax-saving benefits. However, ensure that these instruments align with your tax strategy since the interest is subject to tax as per your income slab.

Debt Mutual Funds (6%): Increasing this portion slightly could improve returns. Debt mutual funds also provide better liquidity options compared to FDs. However, remember the new tax rules, where debt mutual fund gains are taxed as per your income tax slab.

3. Real Estate - 10%
Your 10% allocation to real estate is reasonable. Since you are looking at forms of land and residential property, it is critical to consider the liquidity of these investments.

Consideration: Real estate often involves high transaction costs and is less liquid. You may want to weigh this allocation against other investment avenues for improved liquidity.
4. Gold - 5%
Gold is a strong hedge against inflation and market downturns. Your allocation across physical gold, sovereign gold bonds, and gold ETFs is diverse.

Physical Gold (1-2%): Physical gold can be useful but adds storage costs and risks. You could consider shifting more of this portion to sovereign gold bonds and ETFs, which are easier to liquidate and don’t incur storage issues.

Sovereign Gold Bonds (2%): Sovereign Gold Bonds offer a fixed interest component and are tax-efficient if held till maturity. These are excellent for long-term holding.

Current Market Trends and Sectors
Green Energy: Green energy has high growth potential. However, these stocks can be volatile due to policy changes and economic shifts. Limit exposure to avoid over-concentration.

Technology (AI, Semiconductor, EV): The technology sector is growing rapidly, especially in AI and EV. Consider focusing on large-cap or mutual fund options for stability.

Tax Implications and Portfolio Adjustments
Capital Gains on Mutual Funds: For equity mutual funds, long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%, while short-term gains are taxed at 20%. Debt mutual funds are taxed as per your income slab, so balancing these investments can optimise tax efficiency.

Reduce FDs for Tax Efficiency: FDs, though safe, attract tax on interest income, which may reduce overall returns. Balancing some FD allocation with debt funds could be tax-efficient and yield higher returns.

Recommendations for Optimal Portfolio Structure
Consider Balanced Growth through Mutual Funds: Given your moderate risk profile, shifting a portion from direct stocks and FDs to actively managed mutual funds could reduce the need for active monitoring.

Optimise Debt Allocation with Debt Funds: A higher allocation to debt mutual funds could enhance returns, with improved liquidity and tax efficiency. Explore funds that align with your investment goals and time horizon.

Review Thematic Stock Exposure: Some exposure to high-growth thematic stocks is good but consider capping this to reduce risk. Mutual funds focused on sectors like green energy and technology can offer exposure with professional fund management.

Final Insights
Your asset allocation strategy is commendable and largely balanced. A few adjustments could potentially enhance your portfolio’s growth, liquidity, and tax efficiency over time.

Consider reducing exposure to direct stocks and fixed deposits.

Increase debt fund allocation for better returns and tax management.

Reassess the thematic exposure, especially for emerging sectors like green energy and technology.

Balance between actively managed funds and stable debt options to keep your risk aligned with your moderate risk tolerance.

By implementing these adjustments, you can optimise your portfolio’s growth while managing risk effectively. Over the 10-year horizon, this should position you well to achieve your financial goals.

Best Regards,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 04, 2025

Asked by Anonymous - Jun 03, 2025Hindi
Money
I'm 32 years old software engineer working in product company earning 1.5L per month and my spouse State government employee earning 75K per month.my current financial situation stands as follow 18L in EPF PPF and NPS.12.5 large cap equity shares 20L in fixed assets like FD and emergency funds. 15L in mutual funds and gold ETF. 10L in ESOP .I have home loan 86L EMI 85K for 15 years started this year.My monthly expenses 35-45K . SIP 65K and 25K company ESOP discounted shares. Given to my plan to retire @43-45. How much I need retirement Corpus and could you please review my current asset allocation?
Ans: You are 32 years old and work in a product-based software company.



Your income is Rs. 1.5 lakhs per month.



Your spouse is a State government employee. Income is Rs. 75,000 per month.



Combined family income is Rs. 2.25 lakhs monthly.



Monthly expenses are between Rs. 35,000 to Rs. 45,000.



You invest Rs. 65,000 monthly in mutual fund SIPs.



You buy Rs. 25,000 worth of company ESOP shares monthly.



You plan to retire early at 43 to 45 years of age.



Current Asset Distribution

EPF, PPF, NPS combined: Rs. 18 lakhs.



Equity shares (large cap): Rs. 12.5 lakhs.



Fixed assets (FD, emergency funds): Rs. 20 lakhs.



Mutual funds and Gold ETF: Rs. 15 lakhs.



ESOP: Rs. 10 lakhs.



Home Loan and EMI Commitment

You have a home loan of Rs. 86 lakhs.



EMI is Rs. 85,000 per month.



Loan tenure is 15 years. Started this year.



Appreciation and Strengths

You are very young and already saving well.



You have good income surplus after expenses.



SIP contribution of Rs. 65,000 is strong.



Emergency funds are in place. This shows good planning.



Assessment of Early Retirement Feasibility

Retirement in next 11 to 13 years is a very short time frame.



Retirement planning for 45 years age needs high corpus.



You may need Rs. 6 crore to Rs. 7.5 crore at retirement.



This amount depends on lifestyle, inflation, and life expectancy.



Monthly investment must go up further to reach this target.



Focus on increasing SIP as income grows every year.



Keep your SIP rising 10-15% yearly. This is very important.



Review of Mutual Fund and Equity Investment

Avoid Gold ETF. It gives no interest and limited appreciation.



Move Gold ETF amount gradually to active mutual funds.



Avoid index funds. They give poor downside protection.



Active mutual funds have better risk-managed returns.



Choose multicap, flexicap, large & midcap categories.



Stay away from direct funds. No review, no guidance.



Regular plans via MFD + Certified Financial Planner are better.



These offer continuous monitoring and personalised advice.



On Your Equity Shares Holding

Large cap equity shares are relatively stable.



But still, they carry market risks.



Review and limit direct stock exposure to under 20% of total wealth.



Prefer mutual funds for long-term goals.



About Company ESOP

You hold Rs. 10 lakhs in ESOP. Buying Rs. 25,000 more monthly.



Do not overexpose to one company’s stock.



Limit ESOP holding to under 10-15% of net worth.



Book partial profit once in 1-2 years. Reinvest in mutual funds.



EPF, PPF, NPS Position

EPF and PPF are safe and give fixed returns.



NPS gives exposure to equity with tax benefits.



Use PPF and NPS only for retirement. Don’t touch before that.



Loan Repayment Strategy

EMI of Rs. 85,000 is a big commitment.



Home loan interest outgo is high in initial years.



Try to prepay partially every year.



Use bonuses or ESOP profit for prepayment.



Bring tenure down slowly by part-payments.



Don’t invest in new real estate. Avoid locking more capital.



Emergency Fund Check

You have Rs. 20 lakh in FD and emergency funds.



This is good for 1-1.5 years of expenses.



Keep this amount safe. Do not invest in equity.



Insurance Cover Review

Life and health insurance details not given.



You need term insurance for both of you.



Cover should be 15 to 20 times annual income.



Buy Rs. 2 crore to Rs. 3 crore term plan each.



Take floater health insurance of Rs. 15 lakh at least.



Add super top-up of Rs. 50 lakh or more.



Taxation of Mutual Fund Gains

LTCG above Rs. 1.25 lakh is taxed at 12.5%.



STCG is taxed at 20%.



Debt fund gains taxed as per your income slab.



Keep these tax rules in mind when redeeming funds.



What Needs Focus Now

Increase SIP by 10-15% every year.



Reduce exposure to ESOP slowly.



Avoid direct stocks and index funds.



Stop further investment in Gold ETF.



Part-prepay home loan when possible.



Maintain emergency funds. Do not touch.



Buy term insurance and health cover urgently.



Avoid direct plan MFs. Take guidance from CFP + MFD.



Finally

You are saving well and started early.



You have high potential to build early retirement corpus.



But need clear structure and disciplined reallocation.



Follow a 360-degree plan. Balance risk and liquidity.



Review plan yearly with Certified Financial Planner.



Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Latest Questions
Janak

Janak Patel  |62 Answers  |Ask -

MF, PF Expert - Answered on Jul 17, 2025

Money
I am 34 years old woman. Want to retire at the age of 50 years. I have 28 lacs PPF,360000 NPS, 3 mutual funds approx 60k in each. 11 lacs in PF. 2 loans - personal and car loan for 5 years. Personal loan already 1+ year gone car loan 2+ year gone.
Ans: Hi Priya,

Current Investments -
Your current investments are more (over 90%) in Debt than Equity e.g. PF (PPF+PF) = 39 lacs out total 44.4 lacs.
Debt investments like PPF/PF provide safely and security to the invested capital. But the interest rates just about help meet inflation. Growth is not achieved with these investments in the true sense.
Equity based investments like Equity Mutual Funds will provide growth in the long term (at least 5 years, and you have a good 16 years). Your current allocation is just over 6 lacs even assuming NPS as equity (check and update allocation to equity to max possible).

Loans-
Personal loans will typically have very high interest rates. This should be the first one you should try to close as early as possible. There is no point allocating any savings to investment giving less returns and paying high interest in this loan.
Car loan can continue as per schedule as its interest rate will be much less compared to Personal Loan. Unless you can prepay and close it also early, depending on your saving potential.


To retire early at age 50, you have the next 16 years to grow your corpus to a respectable amount.
I assume you are employed and contributing to PF and NPS. Hopefully you are contributing regularly to Mutual Funds also.
As income, expense and saving/investing details are unavailable I can provide some guidelines only.
Do try to maximize your monthly investment towards Equity Mutual Funds to accumulate a decent corpus for retirement.
Unless you are claiming tax benefits for PPF, consider lesser contribution to it now.
By the time you retire your Equity and Debt should be near 50% each, there by providing you safety and growth. In fact you can try to achieve higher Equity % if possible.
Overall your corpus should fetch average of over 10% returns (currently its under 8%).

Action items
1. Pay off personal loan ASAP
2. Invest maximum savings into equity mutual funds
3. Once you have done above 2, consult a CFP to help with retirement corpus - this depends on various factors, monthly expenses, life expectancy, etc.
4. Ensure you have adequate health cover. Take a topup plan with a higher coverage and lower premiums.

If you have other goals/requirements, then do discuss with CFP and arrive at a holistic plan.

Thanks & Regards
Janak Patel
Certified Financial Planner.

...Read more

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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