I have few more queries can you please suggest your views. We have seen that properties rate grow twice or thrice in 4-5 yrs. But I don't have sufficient down payment as I keep in investing in mutual funds. Is it good to redeem mutual fund and with that amount invest in property. And if I you suggest not to redeem what is best way to invest in property. Sometime I feel to redeem all my investment and buy some property. You have mentioned increase NPS amount can you please suggest what will be good amount which can help meet my goal. I guess to meet retirement amount of 5cr you suggested that . Your answer has really helped me.

Ans: Dear Krishna,

Thank you for reaching out with your queries. It's great to see that you have a diversified investment portfolio and are planning for your retirement. Based on your investments and goals, I have a few recommendations for you.

Regarding your mutual funds, it seems that you have a good mix of equity and debt funds. While I cannot make specific recommendations without a detailed analysis of your risk tolerance, investment horizon, and financial objectives, it is crucial to review the performance of your funds periodically. If any of your funds consistently underperform compared to their respective benchmarks or category peers, you may want to consider reallocating to better-performing funds.

In terms of your stock investments, while it's essential to maintain a diversified portfolio, it might be prudent to shift away from cyclical stocks like Vedanta and Hindustan Zinc. Cyclical stocks are often sensitive to economic fluctuations, and it's better to focus on stable, high-quality companies with a good growth potential for long-term investments, particularly as you approach retirement.

Once your LIC policy matures in 2025, I suggest reallocating the proceeds into more liquid investments that can provide stable returns. You could consider investing in debt mutual funds, fixed deposits, or even high-dividend-yielding stocks. These investments would help you maintain a balance between capital preservation and income generation during your retirement years.

As for the amount required for a comfortable retirement, this will depend on various factors, including your lifestyle, healthcare needs, and inflation. You may want to consider working with a financial planner to calculate the exact amount required based on your unique circumstances. However, based on your current assets and income of ₹75,000 per month, it seems that you are on track to achieving your retirement goal of ₹5 crores in the next 10 years.

Remember that it's important to periodically review and rebalance your investments to ensure that you remain on track to meet your financial goals.

Best regards,

Ans: Your commitment to securing your family’s future is commendable. Let's delve into your current financial situation and devise a roadmap to accumulate a corpus for buying property by age 40. With a comprehensive strategy, you can achieve your goals effectively.

Evaluating Your Current Financial Situation
Income and Expenses
Your monthly take-home income is Rs. 1.10 lakh. Here's a breakdown of your current expenses and investments:

Home Loan EMI: Rs. 25,000 per month
Recurring Deposit (RD): Rs. 25,000 per month
Mutual Fund (MF) SIP: Rs. 12,500 per month
Public Provident Fund (PPF): Rs. 12,500 per month
National Pension System (NPS): Rs. 6,500 per month
You have accumulated Rs. 4 lakhs in FDs and RDs combined, Rs. 2.5 lakhs in MFs, Rs. 4.80 lakhs in PPF, and Rs. 5.30 lakhs in your Provident Fund (PF).

Reviewing Your Investments
Recurring Deposit (RD)
RDs are safe but offer low returns compared to other investment options. It's good for short-term goals and emergency funds.

Recommendation: Consider maintaining a balance for immediate needs but redirecting a portion to higher-return investments for long-term goals.
Mutual Funds (MF)
Your MF portfolio consists of direct plans in various funds. While direct plans have lower expense ratios, actively managed funds often outperform index funds like the SBI Nifty Index.

Balanced Advantage Fund: Provides a mix of equity and debt, balancing risk and return.

Digital and Focused Funds: These are sector-specific and concentrated, which can be volatile.

Recommendation: Diversify further by including some large-cap and multi-cap funds to balance risk.

Public Provident Fund (PPF)
PPF is a safe, long-term investment with tax benefits. Your monthly contribution of Rs. 12,500 helps build a substantial corpus over time.

Recommendation: Continue maximizing your PPF contributions for stability and tax efficiency.
National Pension System (NPS)
NPS is a good retirement savings vehicle, offering market-linked returns and additional tax benefits.

Recommendation: Maintain your NPS contributions, ensuring a balanced asset allocation to maximize returns while managing risk.
Financial Roadmap to Achieve Your Goals
Short-term Goal: Accumulating Rs. 1 Crore by Age 40 for Property Purchase
To accumulate Rs. 1 crore in the next 11 years, your current investments need strategic allocation and potentially higher contributions.

Increase Monthly SIP
Assuming an annual return of 12% on mutual funds, increasing your monthly SIP can significantly boost your corpus. Here's a potential strategy:

Current SIP: Rs. 12,500
Recommended SIP: Rs. 20,000 – Rs. 25,000
Increasing your SIP gradually by Rs. 5000 every year can also leverage the power of compounding.

Lump Sum Investments
Consider using a portion of your FDs and RDs for lump sum investments in mutual funds or balanced advantage funds. This can enhance your returns compared to traditional savings instruments.

Diversification and Rebalancing
Ensure a diversified portfolio that includes a mix of equity and debt funds. Periodically review and rebalance your portfolio to align with market conditions and your risk tolerance.

Long-term Goal: Retirement Corpus of Rs. 10 Crores by Age 50
To retire by 50 with a corpus of Rs. 10 crores, your current and future investments must grow consistently. Here's how:

Increasing SIP Contributions
Maintain your current SIP growth rate and aim to increase it annually by a fixed percentage (e.g., 10-15%).

Year 1: Rs. 20,000
Year 2: Rs. 22,000 (10% increase)
Year 3: Rs. 24,200 (10% increase)
This systematic increment leverages compounding to achieve substantial growth over time.

Optimizing NPS and PPF Contributions
Continue maximizing your PPF contributions for tax efficiency. In NPS, ensure a balanced asset allocation to optimize returns while managing risk.

Strategic Asset Allocation
Allocate your investments strategically across various asset classes:

Equity Funds: High-growth potential but volatile. Diversify across large-cap, mid-cap, and multi-cap funds.
Debt Funds: Provide stability and regular returns. Consider short-term and dynamic bond funds for better yields.
Balanced Funds: Mix of equity and debt, offering a balanced approach to growth and risk.
Tax Planning and Efficiency
Maximizing Tax-saving Investments
Utilize the full benefits under Section 80C by contributing to PPF, ELSS, and NPS. This reduces your tax liability and increases your investable surplus.

Health and Life Insurance
Ensure adequate health insurance coverage for your family to safeguard against medical emergencies. Term insurance provides high coverage at low premiums, securing your family’s financial future.

Emergency Fund Management
Maintain an emergency fund that covers 6-12 months of living expenses. Keep this fund in liquid assets like savings accounts, short-term FDs, or liquid mutual funds for easy access.

Regular Portfolio Review and Rebalancing
Annual Portfolio Review
Conduct an annual review of your portfolio to assess performance and make necessary adjustments. This ensures your investments remain aligned with your goals and risk tolerance.

Rebalancing
Periodically rebalance your portfolio to maintain the desired asset allocation. This involves selling over-performing assets and reinvesting in underperforming ones to manage risk and optimize returns.

Professional Guidance
Certified Financial Planner (CFP)
Engaging a CFP can provide expert advice and tailored financial planning. A CFP helps you navigate complex financial decisions and stay on track to achieve your goals.

Final Insights
Achieving your financial goals of buying property and retiring early requires disciplined planning and strategic investments. By increasing your SIP contributions, optimizing your portfolio, and leveraging tax-efficient investments, you can create substantial wealth.

Regularly review and adjust your financial plan to stay aligned with your goals. Engaging a Certified Financial Planner ensures professional guidance and support in your financial journey.

Your proactive approach to financial planning is commendable. With the right strategies and disciplined execution, you can achieve your goals and secure a prosperous future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: At 34, you are doing many good things.

You live within your means and invest well.

Still, you asked the right questions.

Let us go step by step.

This answer will be simple but deep.

We will assess from a 360-degree angle.

Let us now begin.

Income, Loan and Lifestyle Assessment

Your net monthly salary is Rs. 1.3 lakh.

Your current EMI is Rs. 50,000. This is almost 38% of your income.

You pay Rs. 12,000 extra as home loan prepayment.

Your total home loan outflow is Rs. 62,000 per month.

You have strong cost control because you live in a joint family.

That is a big plus at this age. Keep it up.

Your current lifestyle gives you surplus money. That is a strength.

Do not let lifestyle inflation spoil this later.

Review of Your Ongoing Monthly Investments

SIP in mutual funds: Rs. 30,000 monthly. This is a good habit.

NPS contribution: Rs. 3,000 per month. But NPS has lock-in and limited flexibility.

LIC: Rs. 5,000 monthly. LIC policies mostly offer low returns.

ICICI child ULIP: Rs. 4,000 monthly. ULIPs are not cost-effective.

Bajaj Retirement ULIP: Rs. 5,000 monthly. Also not efficient.

You are paying Rs. 17,000 per month towards ULIP and LIC combined.

This money can earn more if invested in mutual funds.

ULIP and LIC Policies: Need Review

ULIP plans have high costs and complex structures.

They mix insurance and investment. That is never a smart idea.

LIC plans also give low returns (around 5-6% only).

Instead of continuing for full term, check surrender value now.

You may stop future payments after checking terms.

A Certified Financial Planner can assist in evaluating surrender wisely.

That money should be moved to mutual funds via SIP.

Assessment of Mutual Fund Investments

SIP of Rs. 30,000 monthly is excellent. Continue it.

You already have Rs. 21 lakh in mutual funds. That is solid.

Don't reduce SIP to increase home loan prepayment.

Mutual funds help build wealth faster than home loan savings.

Prepayment gives 8.5% benefit (loan rate).

But mutual funds (active ones) can give 12-14% over long term.

So reducing SIPs to prepay loan is not wise.

Continue SIPs. Increase them if income increases.

PPF, NPS and SGB – Conservative, Yet Useful

PPF: Rs. 10 lakh. Tax-free and safe. Keep investing the max every year.

NPS: Rs. 2 lakh. Good for tax saving. But retirement corpus gets locked.

SGB: Rs. 1 lakh. Gold bonds are fine for partial diversification.

Use PPF more than NPS because of better flexibility.

FDs and Stocks – Balancing Safety with Growth

You have Rs. 10 lakh in fixed deposits. Good for emergency or short-term needs.

Equity stocks: Rs. 17 lakh. Shows you are growth-oriented.

Review stock portfolio once every 6 months.

Don’t hold stocks if you're unsure of their quality.

If needed, shift to mutual funds where experts manage the money.

Child ULIP Plans – Better to Avoid

These child ULIPs are sold emotionally, not financially.

High costs and limited transparency are common issues.

Returns are low due to charges.

For your kids’ education and marriage, mutual funds are better.

Start two SIPs – one for education and one for marriage.

Invest in multi-cap and flexi-cap mutual funds.

Keep increasing these SIPs as income grows.

Future Second Home Purchase – Evaluation Needed

You are planning to buy another house worth Rs. 1.7 crore.

Your current home value is Rs. 70–75 lakh.

Don’t look at second house as an investment.

Real estate brings risk, low liquidity and high maintenance.

If it's for self-use, then fine.

But for wealth creation, mutual funds are better.

Don’t take another big loan just for second house.

That can disturb cash flow and limit investments.

If needed, sell existing house and use that as down payment.

Debt vs Equity Thinking – Long-Term Wealth Needs Equity

You are still young. Just 34.

Retirement goal is 50–55. You still have 16–21 years.

Equity mutual funds help in wealth creation.

Debt products like FDs, PPF, NPS are safe but grow slowly.

So, most savings should go to equity mutual funds now.

Only emergency and near-term goals should use FDs or PPF.

Tax Efficiency – Optimise Your Structure

Income tax savings from home loan are fine.

NPS gives extra deduction under 80CCD(1B).

But ULIPs and LIC do not give long-term tax benefits.

Mutual funds are now taxed at 12.5% for long term.

Still, mutual funds offer better post-tax growth than LIC/ULIP.

Emergency Fund and Insurance Coverage

Keep 6 months’ expense in FD or savings as emergency fund.

Check if you have term life cover. Minimum Rs. 1 crore is needed.

Also check family medical insurance. Rs. 10–15 lakh cover is good.

Don’t mix insurance with investment. Keep both separate.

Action Plan: Clear, Simple and Step-by-Step

Continue your Rs. 30,000 SIP. Increase yearly if possible.

Review and surrender ULIPs and LIC if suitable.

Stop all future ULIP premiums. Redirect to mutual funds.

Don’t reduce SIPs to prepay loan. Let SIPs continue.

Make home loan prepayment only if surplus money is idle.

Start SIPs for child education and marriage.

Don’t go for second house as investment.

Review stocks and replace with mutual funds if not confident.

Maintain FDs for emergency, not as long-term investment.

Ensure term life and health cover are in place.

Update nominations and keep all documents organised.

Finally

Your financial journey has a strong start.

You have right habits and long-term thinking.

But your portfolio needs cleaning.

ULIPs and LIC are eating your returns quietly.

Your SIPs are your strongest weapon. Don’t pause them.

Buy house only if it’s for personal use, not wealth building.

Your retirement goal at 50–55 is achievable.

But only if equity investment continues and grows.

Children’s goals will come faster than you think.

Start SIPs now for them. Don’t depend on ULIPs.

You are on the right track. Just remove the low-return blocks.

Review regularly with a Certified Financial Planner.

That will help you move confidently, year after year.

Best Regards,

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

Ans: . It’s wonderful to see how carefully you’ve considered different sources of funds and how your financial planning reflects your thoughtful approach. Let me review your plan comprehensively, addressing each aspect and providing a 360-degree assessment to ensure your financial stability and long-term wealth creation goals remain intact.

1. Your Current Income and Loan Details
Your monthly in-hand salary is Rs 1.70 lakhs.

You plan to take a company-provided soft loan of Rs 1.25 crores.

The EMI is Rs 70,000 per month over a 25-year period.

The EMI is about 41% of your monthly salary.

Insight: An EMI that is under 50% of your monthly income is considered manageable and does not overstretch your finances. Your plan stays well within this limit, showing prudence.

2. Your Proposed Own Fund Sources
You plan to arrange Rs 55 lakhs from your own resources:

Rs 15 lakhs from mutual funds (portfolio of Rs 36.61 lakhs with 17.26% XIRR).

Rs 5 lakhs from fixed deposits.

Rs 30 lakhs from your EPF corpus (Rs 60 lakhs total).

Rs 5 lakhs from your demat account (stocks and Sovereign Gold Bonds).

Insight: Using multiple sources can be a wise way to avoid overburdening any single asset. However, let’s evaluate each fund source for its impact on your long-term stability.

3. Withdrawal from EPF Corpus
EPF is a critical pillar for your retirement.

It offers compounded, tax-free returns over the long term.

Withdrawing Rs 30 lakhs from the Rs 60 lakh corpus means you are using half of your retirement-focused savings.

Insight: This move may seriously impact your retirement corpus. Though you are eligible to withdraw for home purchase, this significantly reduces the pool that would support your retirement.

I suggest considering whether you can reduce this withdrawal amount. Keeping your EPF corpus intact allows it to grow and support you in your retirement years.

4. Impact of Mutual Fund Redemption
Mutual funds are currently giving an XIRR of 17.26%, which is a strong return.

Selling Rs 15 lakhs of these funds will reduce your future wealth accumulation.

Selling will also trigger capital gains taxes:

For equity mutual funds, long-term capital gains above Rs 1.25 lakh are taxed at 12.5%.

Short-term gains are taxed at 20%.

Insight: By redeeming well-performing mutual funds, you lose out on compounding and higher future wealth creation. Moreover, paying taxes on gains reduces the net amount you receive, making it less efficient.

5. Utilisation of Fixed Deposits and Demat Account
Using Rs 5 lakhs from fixed deposits is logical as they generally offer lower returns.

Redeeming Rs 5 lakhs from your demat account also makes sense if these assets are not high-performing.

Insight: Liquidating fixed deposits and less productive assets is a smart move. This preserves more promising investments like mutual funds.

6. Emergency Fund Planning
It’s vital to ensure you have a dedicated emergency fund even after this home purchase.

Typically, 6-12 months of expenses should be set aside in highly liquid instruments.

Insight: If you use all your available resources without maintaining an emergency fund, it could put your finances at risk during unforeseen events. Be sure to retain enough liquidity to manage emergencies or unexpected situations.

7. Potential Risks of Your Plan
Using half of your EPF corpus can leave you under-prepared for retirement.

Selling mutual funds that are performing well can compromise future financial growth.

Not keeping an emergency fund could put you in a tight spot during a crisis.

Insight: Balancing your immediate need for the home purchase with your long-term goals is crucial. Let’s explore alternative ways to make this happen.

8. Alternative Strategies to Strengthen Your Plan
Here are some ways to reduce the burden on your high-performing assets:

Minimise EPF Withdrawal: Try to limit how much you take from EPF. This way, your retirement plan remains largely unaffected.

Increase the Home Loan Amount: If possible, increase your loan slightly. Home loan rates are typically lower, and this would help you preserve your retirement corpus and mutual fund investments.

Negotiate for Phased Payments: Check if the property seller is willing to accept payments in phases. This gives you more time to plan your fund mobilization and might reduce the immediate pressure to liquidate investments.

Consider Partial Mutual Fund Redemption: Instead of withdrawing Rs 15 lakhs all at once from mutual funds, see if you can use smaller amounts over time. This ensures that the best-performing funds continue to grow.

Utilise Underperforming Demat Holdings: If there are stocks or bonds in your demat account that are not yielding satisfactory returns, prioritise using those funds before touching the better-performing mutual funds.

Insight: By exploring these strategies, you can protect your retirement and long-term financial growth while still achieving your immediate goal of home ownership.

9. Liquidity and Future Financial Flexibility
A healthy liquidity position means you can meet your family’s needs without panic.

It also gives you the power to seize future investment opportunities.

Insight: Avoid draining all your investments now. Retain flexibility so you’re not forced to borrow at high rates later or sell assets in a poor market.

10. Reviewing Your Portfolio Strategy
Mutual funds are actively managed by professionals. Their active monitoring ensures that your investments are handled well and diversified.

If you were investing directly in direct funds without guidance from a certified professional, that could be riskier. Direct funds may save you small costs, but you miss out on expert insights and disciplined investment planning that a certified financial planner and mutual fund distributor provide.

By sticking with regular plans through a certified mutual fund distributor, you get ongoing portfolio reviews and access to updated advice.

Insight: Stay focused on using the expertise of certified professionals who understand the market’s movements and can help rebalance your investments. This prevents costly mistakes and ensures sustained growth.

11. Avoid Real Estate as an Investment Option
Real estate investments can be illiquid.

They can involve high maintenance and transaction costs.

They may not offer returns that match the compounding potential of mutual funds.

Insight: Since you are buying this property for residential use, it’s fine. But avoid viewing it as a wealth-building vehicle compared to your mutual funds and EPF.

12. Importance of Professional Advice
Working with a certified financial planner can give you a clear, holistic perspective. They can help you:

Reassess your portfolio balance.

Structure the home purchase funding in a way that preserves your future wealth.

Ensure your retirement goals remain protected.

Prepare for future family needs, like children’s education or healthcare costs.

Insight: Having a professional eye ensures that every financial decision aligns with your unique needs and long-term dreams.

13. Finally
Your plan reflects a clear focus on home ownership, which is commendable. But it’s essential to ensure that your retirement dreams and wealth-building goals are not compromised.

Consider these points:

Reduce EPF withdrawal as much as possible.

Use more of your low-yield assets like fixed deposits and underperforming stocks.

Protect your mutual funds that are delivering strong returns and helping grow your wealth.

Keep an emergency fund untouched.

Explore if you can slightly increase your home loan, given its lower interest cost, to reduce pressure on your best investments.

Work with a certified financial planner to craft a 360-degree strategy that keeps your financial future safe.

You have done excellent groundwork. Small adjustments will ensure your home purchase brings joy without worries for the future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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