NRI, age 40 years with current corpus of INR 2.2 Cr of which 1.4 cr invested in equity and 80 lakhs in NRE FD. No liability, annual expenses of 7 lakhs including term and health insurance premiums. Intending to retire in 1 year. Can I go ahead?

Ans: Hello;

Kudos for a judicious blend of asset allocation.

I have assumed one property occupied by you (80 L) while the other property is let out(80 L) and considering 3% rental yield may provide you a monthly income of 20 K.

You may buy immediate annuity for a sum of 1.45 Cr which may provide you a monthly income of around 65 K (post-tax). (6% annuity rate considered)

For the balance 5 Cr corpus you may do an SWP in a low to moderate risk equity savings fund like ICICI Pru equity savings fund. A 3% SWP will get you a monthly income of 1.12 L (post-tax).

So your total post-tax monthly income in retirement would be 1.12+0.2+0.65= 1.97 L.

A modest return of 8% on SWP fund will be good enough to provide inflation adjusted income every year till the age of 85.

Avoid direct equity and pure equity mutual fund exposure in retirement. Invest through hybrid mutual funds, with low allocation to equity.

Happy Investing;

Ans: Hello;

What is your income from running retail pharmacy? You are seeking retirement from this job, right?

Also I understand that your income from insurance work is 20 K per month.

Kindly confirm that this is correct.

Also based on your above input, I may be able to provide suitable advice to you.

Thanks;

Ans: Dear Sir,

You are 52 and evaluating retirement in the next 1 year. Let’s analyze your readiness step by step.

Current Assets

Provident Fund (PF): ?35 L

Fixed Deposits (FD): ?15 L

Mutual Funds (MF): ?50 L

Gold: ?10 L

Shares Portfolio: ?1.25 Cr

LIC Endowment (Maturity 60–75 yrs): ?1.5 Cr (future inflows)

Real Estate: 2 debt-free apartments in Mumbai

Total Financial Assets (liquid + semi-liquid): ~?2.35 Cr
(Excluding LIC maturity & real estate)

Expenses & Goals

Current Expenses: ?1 L/month (?12 L/year)

Future Goal: ?40 L for son’s higher education in the near future

Medical insurance: Adequate

No EMI burden

Step 1: Corpus Requirement

For retirement at 53, assuming:

Life expectancy: ~85 years (32 years post-retirement)

Expenses: ?12 L/year, inflating at ~6% annually

You would need ~?7–8 Cr to fund 30+ years comfortably without depending on LIC maturities or real estate liquidation.

Step 2: Current Corpus Sustainability

Investable assets today: ~?2.35 Cr

This corpus, even at 8–9% return, can safely provide ~?9–10 L annually without erosion (via SWP + interest).

Your requirement: ?12 L/year, growing with inflation.

Gap: ~?3 L/year immediately, which widens each year as inflation compounds.

Step 3: Future Inflows

LIC maturity of ?1.5 Cr between 60–75 gives good support in later years.

Real estate (Mumbai flats) is a strong backup — potential rental income or liquidation if needed.

Step 4: Retirement Feasibility

Immediate Retirement (age 53): Risky unless you are comfortable dipping into capital aggressively or liquidating part of your real estate.

Safer Plan: Work till at least 58–60. This allows:

PF to grow larger with compounding.

LIC maturities to start supporting income.

More years of SIPs/investments to expand your MF corpus.

If you stop earning now, your current ?2.35 Cr corpus is insufficient to sustain 30+ years of inflation-linked expenses.

Step 5: Suggested Strategy

Do not retire at 53 — aim for 58–60 for a safer margin.

Son’s education (?40 L): earmark this from FD + part of MF to avoid disturbing long-term corpus.

Continue working + SIPs in MF for 5–7 years to build corpus closer to ?4–5 Cr before retirement.

At retirement:

Keep 3–4 years expenses in debt/liquid funds.

Rest split 60% equity, 30% debt, 10% gold.

Plan SWP + LIC inflows + possible rental income.

Conclusion

You are financially stable, but retiring in the next 1 year is not advisable if you want inflation-protected income for 30 years. Retiring at 58–60 is a much safer option, as by then you will have:

Larger PF + MF corpus

LIC inflows starting

Education expense behind you

Real estate as a strong fallback

Recommendation: Continue working till at least 58 for a stress-free retirement.

Best regards,
Naveenn Kummar, BE, MBA, QPFP
Chief Financial Planner | AMFI Registered MFD
https://members.networkfp.com/member/naveenkumarreddy-vadula-chennai

Ans: You have shared your full details with care. I appreciate your clarity and discipline. You are managing multiple responsibilities together and still aiming for a big goal of Rs 4 crore at age 52. This is inspiring. With proper planning, your dream is possible. Let us look at your situation step by step in detail.

» Current Income and Cash Flow
– Your salary in hand is Rs 1.55 lakh monthly.
– You also receive Rs 25,000 as rental income.
– Total inflow is Rs 1.80 lakh per month.
– Home loan EMIs are Rs 75,000 monthly.
– Other fixed expenses are Rs 92,000 monthly.
– Total outflow is about Rs 1.67 lakh monthly.
– Balance left is around Rs 13,000 per month.
– You mentioned Rs 20,000 monthly savings, but actual gap shows slightly less.
– You are handling cash flow well, but scope exists for better surplus creation.

» Loans and Liabilities
– You are managing three loans together.
– Home Loan 1 has a small balance, interest is 5.5%. EMI is Rs 8,171.
– Home Loan 2 is the largest at Rs 54 lakh. Interest 5%. EMI is Rs 44,906.
– Home Loan 3 is Rs 21 lakh. Interest 8.25%. EMI is Rs 19,803.
– Together EMIs are Rs 75,000. This is heavy but manageable with your income.
– Priority should be to close high-interest loan first.
– So, Home Loan 3 at 8.25% deserves focus.
– After that, look at reducing Home Loan 1 and finally Loan 2.
– If you increase surplus, part-prepayment will save future interest.

» Insurance Policies and Traditional Plans
– You have Bharti AXA policies with yearly and monthly premiums.
– Premiums are heavy at Rs 8,000 monthly average.
– These are insurance-cum-investment products.
– They give low returns and long lock-ins.
– They block your wealth creation.
– You already have Rs 1 crore term insurance, which is sufficient protection now.
– These Bharti AXA policies can be surrendered.
– Money can be reinvested in mutual funds for better growth.
– This single step will free cash flow and create higher corpus.

» Emergency Fund and Safety Net
– You have Rs 8 lakh as emergency fund.
– This is a very good cushion.
– This covers at least 6 months of expenses and EMIs.
– Keep this in safe liquid funds and partly in bank FD.
– Avoid touching this for investments.

» Existing Investments
– SIP of Rs 5,000 is good but too small for your goal. Current value Rs 1 lakh.
– Direct stocks worth Rs 2.2 lakh are fine but should not exceed 10% of total portfolio.
– NPS balance is Rs 4.42 lakh with Rs 11,500 monthly contribution. This will grow well for retirement.
– Atal Pension Yojana is small, but still adds safety in later years.
– PF balance is Rs 13 lakh with Rs 15,000 monthly contribution. PF is a solid foundation.
– Overall, you already created a decent base. But acceleration is needed for your Rs 4 crore goal.

» Insurance and Risk Coverage
– Your term insurance cover is Rs 1 crore.
– With your income, loans, and family needs, this is less.
– You should increase term cover to at least Rs 2.5 crore.
– Buy additional term cover till age 65.
– This keeps family safe if anything unexpected happens.
– Health insurance is not mentioned. Please confirm you have a family floater policy. If not, buy immediately.

» Retirement Goal Analysis
– Your retirement target is Rs 4 crore at age 52.
– You have 16 years left.
– Current savings are not sufficient.
– Current SIP of Rs 5,000 will not create this wealth.
– You need to invest minimum Rs 40,000 to Rs 50,000 monthly for this goal.
– By freeing money from policies and better expense control, you can reach this.
– Rental income will also support, but core is disciplined SIP growth.

» Mutual Fund Strategy
– You should focus on actively managed mutual funds.
– Avoid direct mutual funds. They look cheaper but lack guidance.
– Investing through a certified financial planner and distributor is better.
– They help you with rebalancing and disciplined review.
– Regular funds may cost slightly higher, but long-term benefits outweigh.
– You should diversify across large-cap, flexi-cap, mid-cap, and small-cap funds.
– Equity mutual funds give best compounding over 10–15 years.
– Debt allocation should be low as your horizon is long.
– Increase SIP step by step every year by 10%.

» Why Not Index Funds
– Index funds look attractive with low cost.
– But they are passive and follow market blindly.
– In India, markets are still not fully efficient.
– Good fund managers can beat index returns.
– Actively managed funds can handle downturns better.
– They also shift allocation across sectors for safety.
– With index funds, you carry full market risk with no active defense.
– So, actively managed funds remain better for your retirement target.

» Expense Management
– Household expenses are Rs 92,000 monthly.
– Grocery is Rs 40,000 which looks high.
– Travel and party add Rs 15,000 monthly.
– These are lifestyle choices.
– If reduced even by 10–15%, you can increase SIPs strongly.
– Small changes today will give big benefits at retirement.

» Tax Planning
– PF and NPS already give Section 80C and 80CCD benefits.
– Surrender of policies may cause some tax outgo, but long-term benefits are higher.
– Mutual funds will have capital gains tax as per new rules.
– For equity funds, LTCG above Rs 1.25 lakh taxed at 12.5%.
– STCG is taxed at 20%.
– For debt funds, gains are taxed as per slab.
– With guidance, tax can be optimised by timing redemptions.

» Child Education and Family Goals
– You spend Rs 6,000 monthly for kid study.
– Future education costs will rise sharply.
– Set aside a dedicated SIP for education corpus.
– This prevents mixing retirement funds with education needs.
– Even a Rs 10,000 monthly SIP will help meet education costs in 10–12 years.
– Keep this separate from retirement plan.

» Step by Step Action Plan
– Surrender both Bharti AXA policies and reinvest in mutual funds.
– Increase term insurance to Rs 2.5 crore.
– Confirm health insurance cover for family.
– Increase SIPs from Rs 5,000 to Rs 25,000 immediately.
– Use surplus of Rs 13,000 and freed policy money for SIPs.
– Increase SIP by 10% every year.
– Focus on clearing high-interest Home Loan 3 early.
– After that, consider faster prepayment of Home Loan 1.
– Keep Rs 8 lakh emergency fund intact.
– Keep PF and NPS contributions as they are.
– Allocate direct stock exposure to not more than 10%.
– Set aside SIP for child education.
– Review portfolio every year with certified financial planner.

» Finally
You have stable income and rental inflow. You are already saving and investing. But, your current allocation is not enough for your Rs 4 crore target. You need bigger SIPs, better insurance, and more focus. By removing low-return policies and using mutual funds wisely, you can accelerate wealth. By controlling lifestyle expenses slightly, your surplus will rise. With discipline and annual reviews, your dream retirement at 52 is possible.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

Ans: Hi Rajesh,

Overall very good investments done at your age. Let us have a more detailed look at your financials:
1. Home Loan - Continue. Do not prepay it. Pay as per your emi schedule.
2. FD - 63 lakhs - bit much. Can have a FD of 25 lakhs as emergency fund. Redirect remaining towards mutual funds into aggressive funds for them to generate much better returns than FD.
Extra money in FD is just being eatenby inflation. Hence moving it into mutual funds is a wise decision.
3. PF and NPS - continue till retirement. Good debt and tax-free instruments for money conservation.
4. PPF - can avoid extending its tenure for extra 5 years. Rather move the maturity proceedings to MFs for your retirement.
5. SIP of 81k - amazing. Continue in the mentioned funds. Funds are good to continue.
6. LIC - avoid buying fresh LIC policy. Their overall return come out to be 4% - even less than FD.
Continue exiting LIC and refrain from buying fresh ones.
7. Yes, you need to have separate term and health insurance. As post your retirement, it will be difficult to get any new policy. Better to buy now when health conditions are comparatively better. And you will get it cheaper than later stages. Do not wait and buy separate term and health insurance.
8. you are on track. 7 crores is very easily achievable. Infact with this discipline and investments, you can achieve more than the double of your aim.
9. Increase SIP whenever possible.

My last advice would be to get help of a professional as your corpus is morethan 10 lakhs and a professional will help with your portfolio periodically.
Hence do consult a professional Certified Financial Planner - a CFP who can guide you with exact funds to invest in keeping in mind your age, requirements, financial goals and risk profile.

Let me know if you need more help.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/