Ramalingam Kalirajan |10872 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 25, 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

Asked by Anonymous - Sep 25, 2025Hindi

Dear Sir, I am reaching out to seek your professional guidance and assistance in formulating a comprehensive financial plan based on my current financial situation and long-term goals. Below is a detailed summary of my income, expenses, liabilities, ongoing investments, and financial objectives: Personal & Family Details: Age: 39 years Family: Spouse 32 years and two sons (ages 7 and 5 yrs) Income: My monthly take-home salary: ₹1.7 lakh Spouse's monthly take-home salary: ₹15,000 Total household income: ₹1.85 lakh per month Monthly Expenses & Liabilities: Personal Loan EMI: ₹22,239 (until June 2026) Home Loan EMI: ₹26,816 (for the next 14 years) Chit Fund Payment 1: ₹42,000 (until May 2026 - already lifted) Chit Fund Payment 2: ₹10,000 (until September 2026 - not yet lifted) Other monthly expenses (including groceries, utilities, Fuel exp etc.): ₹25,000 Credit Card Payments: ₹5,000 monthly Gold Loan Worth 2.2 lakh Insurance Coverage: Term Insurance: ₹1 crore (self) Health Insurance: ₹5 lakh floater (self, spouse, and two children) with restore benefit ₹10 lakh policy for my mother (age 58+) Investments: SIP in Mutual Funds: ₹35,000 per month (started November 2024) Step-up SIP Plan: Planning to increase SIP by 10% annually Current Mutual Fund Portfolio Value: ₹3.8 lakh EPF Balance: ₹4 lakhs Stocks Investment: ₹15,000 Emergency Fund: 55k 23 Lakhs is given for interest(lending) in May-24 for trust worthy relative, i will get 46k interest amount monthly but they pay that amount yearly once. Financial Goals: Child Education & Related Expenses: Target corpus of ₹1.5–2 crore over the next 7–8 years (by 2032–33) Retirement Planning: Target retirement corpus of ₹10 crore over the next 21 years (by age 60) Plan to use SWP (Systematic Withdrawal Plan) post-retirement based on required monthly expenses Given the above financial profile and goals, I would appreciate your expertise in: Reviewing my current asset allocation and suggesting adjustments, if any Validating the feasibility of my targeted corpus based on current investment strategy. Recommending any additional steps or instruments required to meet my short-term and long-term objectives. Structuring an optimal investment roadmap, including debt, equity, and other assets, aligned with my risk profile. Looking forward to your detailed analysis and recommendations.

Ans: You have shared a very detailed picture of your financial life. That clarity is a strong foundation. You have a good income, a supportive spouse, and early focus on investments. You have also taken important covers like term and health insurance. This shows responsibility and discipline. With few refinements and structured planning, your goals can be achievable.

» Income and expense review
– Your family income is Rs 1.85 lakh monthly.
– Core household expenses, including EMIs and chit payments, are about Rs 1.31 lakh.
– That leaves you a surplus of around Rs 50,000 each month.
– Current SIP of Rs 35,000 is part of this surplus.
– After SIPs, you still save some part for emergencies or ad-hoc needs.

Your surplus will grow once chit fund and personal loan end in 2026. That will release Rs 74,000 monthly. This extra amount can be shifted to wealth creation.

» Debt and liability assessment
– Home loan EMI is Rs 26,816 for 14 years. This is fine since property is a long-term need.
– Personal loan ends in 2026. This is a relief.
– Chit fund commitments are heavy until 2026. Once done, you will have better cash flow.
– Credit card dues are low, but better to clear them monthly in full.
– Gold loan of Rs 2.2 lakh should be closed early. Avoid rolling interest here.

Reducing smaller high-interest loans first will ease your future surplus.

» Insurance protection
– Term cover of Rs 1 crore is good. But your income and family size suggest higher cover. Around Rs 2 crore is more suitable. You can add another term plan for extra protection.
– Health insurance is Rs 5 lakh floater. For a family of four, this is low. Upgrade to Rs 15–20 lakh coverage using super top-up. It will be affordable and protective.
– Coverage for your mother is fine. Maintain that, as her age makes fresh cover costly.

Better insurance ensures your goals remain intact even if sudden risks occur.

» Current investment profile
– Monthly SIP of Rs 35,000 is a good start. Step-up of 10% yearly will add power.
– Current value of Rs 3.8 lakh shows you started recently. Stay patient for compounding.
– EPF of Rs 4 lakh is useful for safe debt exposure. Continue contributing.
– Stocks of Rs 15,000 is a small allocation. Direct stocks need skill and time. Better to restrict and focus more on diversified funds.
– Emergency fund of Rs 55,000 is too low. For your income, it should be at least Rs 6–8 lakh. Gradually build this over time.
– The Rs 23 lakh lent to a relative generates Rs 46,000 interest monthly, but paid yearly. It gives 24% return, but risk exists. Keep monitoring repayment and have a backup plan.

» Goal: child education
– You want Rs 1.5–2 crore in 7–8 years.
– This is a short to medium goal, so equity allocation must be balanced. Too much equity brings risk, too much debt brings low growth.
– Better to keep 60% equity and 40% debt for this goal.
– SIPs for education can be in multi-cap, flexi-cap, and mid-cap funds.
– Debt part can go into short-duration debt funds or recurring deposits.
– Step-up of 10% will improve corpus creation speed.
– You may also use part of the yearly interest from lending after 2026.

» Goal: retirement planning
– You want Rs 10 crore at 60 years. That is 21 years away.
– For long-term goals, equity focus must be high. About 75% in equity funds and 25% in debt is balanced.
– Your EPF can serve as part of debt allocation.
– Equity SIPs should cover large-cap, flexi-cap, mid-cap, and small-cap categories.
– Debt can go to EPF, PPF, or debt funds.
– Avoid index funds, as they lack active management. Index funds just copy the market. They don’t protect during market falls. They don’t capture special opportunities. Active funds managed by skilled professionals give better risk-adjusted growth in India.
– Step-up SIP will ensure inflation is managed, and corpus target becomes realistic.

» Tax efficiency
– Remember, equity mutual fund gains are taxed at 12.5% LTCG beyond Rs 1.25 lakh yearly. STCG is 20%.
– Debt funds are taxed as per income slab.
– Use family accounts smartly to spread tax liability.
– EPF and PPF are tax efficient for long-term debt allocation.

» Cash flow improvement after 2026
– From June 2026, chit payments and personal loan end. That frees up Rs 74,000 monthly.
– You can raise SIPs from Rs 35,000 to Rs 80,000 or more after that.
– This single move will create a big push for both education and retirement goals.
– Using some yearly interest from your lending will further strengthen.

» Emergency fund building
– Currently, Rs 55,000 is not enough.
– Slowly increase to Rs 6–8 lakh.
– Keep in sweep-in FD or liquid mutual funds.
– This will give peace of mind during job breaks or health issues.

» Asset allocation suggestion
– For child education (7–8 years): 60% equity, 40% debt.
– For retirement (21 years): 75% equity, 25% debt.
– For emergency fund: 100% liquid or FD.
– Avoid gold loans and speculative assets.
– Direct stocks should not exceed 5% of your portfolio.

» Additional steps
– Upgrade your health insurance soon.
– Increase term insurance coverage.
– Start separate SIP buckets for each goal. Don’t mix education and retirement in same SIP.
– Build emergency fund slowly.
– Avoid new chit funds or informal lending. Concentrate more on formal investments.
– Pay off the gold loan at the earliest.
– Keep a regular review every year.

» Risk profile matching
– You are in mid-age, earning stable salary.
– You can take moderate to high risk for retirement goal.
– For education, you need moderate risk only, as goal is near.
– Always rebalance portfolio yearly.

» Finally
You are already on the right track. Your income is good, and your discipline is visible. With extra cash flow after 2026, your investment capacity will double. Both your goals of child education and retirement are possible with proper planning. Keep increasing SIPs, balance equity with debt, and strengthen insurance and emergency fund. Stay invested with patience. You will reach your dream milestones.

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.

Money

Ans: You are doing well in building income, investments, and assets. That shows strong financial clarity and discipline. This lets us plan your path to financial independence over the next 8–10 years, while also taking care of your kids’ future education. You deserve appreciation for your hard work and family focus. Let us explore a complete 360?degree plan to help you reach both goals with confidence.

Current Financial Summary
Your salary in hand is Rs.?1.25?lakh per month.

Wife’s package is Rs.?7?lakh per annum with 10–20% increments.

Current rent income is Rs.?55k per month, dropping to Rs.?25k by Feb?2026.

Home loan 1: Rs.?60?lakh @?8%, EMI Rs.?60k.

This EMI will reduce to Rs.?40k soon after loan transfer.

Home loan 2: Rs.?14?lakh @?7.5%, EMI Rs.?15k.

Home loan 2 top?up: Rs.?24.5?lakh @?8%, EMI Rs.?25k.

Monthly spending is Rs.?40k; increasing by Rs.?15–20k in 2026.

Annual travel and leisure spending is Rs.?1.5–2?lakh.

Term life insurance of Rs.?2.25?crore is in place.

Medical cover for kids and parents is provided by employer.

Equity mutual funds (self) total Rs.?55?lakh; SIP Rs.?25k.

Equity mutual funds (wife) Rs.?1.8?lakh; SIP Rs.?20k.

Liquid funds Rs.?25?lakh for ongoing property development.

Receivables of Rs.?10–15?lakh.

NPS self is Rs.?25?lakh; monthly deposit Rs.?15k.

EPFO self plus is Rs.?10?lakh; monthly deposit Rs.?40k.

House property 1 valued at Rs.?1.5?crore.

Flat 2 valued at Rs.?2?crore.

Gold bonds worth Rs.?2.5?lakh.

Paternal property under development; returns likely from end?2026.

Likely need another top?up loan of Rs.?20?lakh for development.

You have clear income, investments, liabilities, assets, and projected changes. This sets a strong base for financial planning. Great job collecting this data.

Financial Independence Goal
You aim to achieve financial independence in 8–10 years. This means your passive income and investments cover your household expenses and lifestyle needs. You also have two children and want to fund their higher education, likely medical courses, as that was mentioned in your query.

Your goal is two?pronged: retire (or gain financial freedom) by 50 to 52 years of age, and fund two medical courses in 12–15 and 15 years respectively. We’ll work out a flexible, achievable plan to meet both.

Education Planning for Children
You mention medical education for both kids. Medical colleges in India are expensive. Today, medical education costs around Rs.?15–25?lakh per child per course (depending on public/private). With inflation (say 8–10% annually), the cost after 12–15 years can be around Rs.?60–90?lakh per child. That may rise higher if abroad is considered.

Therefore, aim to accumulate around Rs.?60–90?lakh for each child’s education fund by the time they enter college. That means a total goal corpus of around Rs.?1.2–1.8?crore dedicated solely to education.

We should treat these as separate financial goals, with dedicated investment plans.

Emergency Buffer and Loan Focus
Given your income and expenses, you need an emergency fund equal to six months of living expenses and EMIs—say around Rs.?5–6?lakh. This secures against sudden income drops, business slowdown, or emergencies during this intense property development period.

The high EMIs (especially the large top?up loan) and reducing rent income by Feb?2026 create cash flow pressure. To ease this:

Plan to pre?pay small extra amounts to reduce EMIs and interest costs.

Focus on restructuring your high?interest top?up loan, if possible, to reduce EMIs or interest burden.

Ensure liquidity remains intact for ongoing property needs and emergencies.

Creating an EMERGENCY RESERVE now prevents future setbacks.

Income and Expense Management
Your household income is substantial today. But upcoming changes in rent income and rising expenses require tight budget control.

Track expenses monthly to identify cost savings opportunities.

Review discretionary spends—like travel, entertainment, dining out—and moderate them.

Once property development is complete and rent income stabilises again, redirect surplus into investments.

Your current travel budget is fine but future budgets should consider children’s activities, schooling, and lifestyle inflation.

This disciplined approach secures your path to financial independence.

Investment Strategy for Independence
You already have significant equity mutual fund holdings. To build future passive income and wealth growth:

Continue SIPs in actively managed equity funds
They offer tailored allocation and better downside protection over time. Avoid index funds, as they just mirror market returns and may not buffer bear cycles as effectively.

Increase SIPs opportunistically
As rent income decreases and then rises again, redeploy surplus into additional equity and debt fund SIPs.

Maintain NPS and EPFO contributions
These provide tax savings and long?term security.

Add hybrid or balanced mutual funds
These mix equity and debt. They can provide steady growth and periodic income, useful for post?retirement stability.

Monitor tax impact
For equity mutual funds, long?term capital gains over Rs.?1.25?lakh are taxed at 12.5%, short?term at 20%. For debt funds, both are taxed as per income slab. Plan redemptions around this.

Segregate goal?based investments
Keep separate portfolios for education, retirement, and lifestyle goals. This helps clarity and prevents fund mixing or misallocation later.

Loan Repayment and Liability Management
Your liabilities are substantial. Reducing them is vital to achieve financial independence.

The top?up loan is sizable. Once the property yields income, aim to use it for part?prepayment.

If EMIs are overwhelming, consider extending tenure to reduce EMI burden—but not extend too far into retirement years.

Avoid new loans unless absolutely necessary for high?return investments.

Use excess cash post?loan reduction for investments rather than new borrowings.

This balances cash flow and future surplus creation.

Property Income and Asset Review
Your investment property is under commercial development with projected returns of Rs.?3–4?lakh per month by end of 2026. That will be a major positive cash flow stream. Until then, you have liquid funds and receivables covering the gap.

Maintain adequate reserve to complete development fully. Ensure rental contracts are aligned with lock?in periods and tenant terms once property is operational.

While property can be a source of income, do not allocate further new capital to real estate. Instead, redirect incremental savings into mutual funds for growth and liquidity.

Taxation and Benefit Planning
Tax planning can enhance returns and support goals:

Use tax?saving options like NPS and EPFO.

Be mindful of home loan interest deduction limits.

Manage capital gains tax on equity and debt systematically.

Consider the impact of bonus and perks as salary increases.

Good tax planning boosts available investible surplus.

Goal Allocation and Timeline
A long?term timeline (8–10 years) gives you time to build a strong corpus of Rs.?3–4?crore or more, sufficient to fund both education goals and financial independence. This will evolve in phases:

Months 0–24: Complete development, maintain liquidity, build emergency buffer, manage EMI.

Years 2–4: Reduce top?up loan, rent income stabilises, surplus invests into equity and hybrid funds.

Years 4–8: Equity and hybrid SIPs grow, property returns increase, education corpus accumulates.

Years 8–10: Finalise education corpus for elder child, begin partial use. Continue SIPs for younger child’s education and retirement planning.

Risk and Protection
You already have adequate term insurance (Rs.?2.25 crore) and medical cover. That protects family against major risks.

Maintain these as long as liabilities exist and children are dependent. Post-retirement, analyze whether coverage can be adjusted without risk.

As part of financial freedom, ensure you have sufficient liquidity and an active financial plan with regular reviews.

Regular Reviews and CFP Guidance
Active review is key to success:

Reassess cash flow and goals every year or after major life change.

Rebalance portfolios based on performance and goals.

Adjust SIPs and investments if goals change.

Work with a Certified Financial Planner for ongoing clarity, alignment, and discipline.

A professional can guide you to navigate cashflow changes and evolving goals smartly.

Final Insights
You are on a strong foundation. Your income, savings, investments, and property make you well?placed for financial independence.

The education corpus goal is large but achievable with consistent SIPs and disciplined investing.

Debt reduction, investment discipline, and budgeting are keys to your success.

Continue actively managed mutual funds via a Certified Financial Planner. Avoid index funds—they may underperform during downturns and lack active guidance.

Post?loan repayment, shift surplus into structured SIPs and hybrid funds.

Monitor taxes on mutual fund gains and structure withdrawals efficiently.

Keep risk protection intact and continue annual review with CFP guidance.

You already have strong financial habits. Now, combine them with a focused, systematic plan and professional review. That will shape your path to a secure, independent future and fully funded children’s education.

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