Really after reading comments of yours on this qn "I am 48 years old I am planning to quit. I have 3 lands worth 85 lakhs, FD 15 lakhs, PF 60 lakhs, MF 50, 3 houses"...I think this generation should never ever think of getting retirement...He who takes a knife will die by the knife...such he who learns , who earns, will die by learning continuously earning continuously...funny but true

Ans: Hello;

Supposing you quit your job today, how do you plan to financially support yourself till the age of 55(15 years from now)when your pension is scheduled to begin.

Your input will help us advise you suitably.

Best wishes;

Ans: Hello;

No that is not correct however people should avoid making retirement corpus estimate based on some thumb rules floating on social media which can be dangerous to your financial well-being and health.

If you have "adequate resources" of inflation indexed income, such as:

1. SWP from a hybrid mutual fund
2. Rental income from residential or commercial property
3. Inflation indexed annuity income

In addition to interest income, dividend income, pension, if any, self occupied house plus separate provisions for kids higher education and some emergency fund for health issues apart from adequate healthcare insurance for the family.

This can work for many people.

The key thing is people who are in late 30s/early 40s have a burnout feeling due to toxic work culture in most Indian establishments and also having created some corpus are eager to exit the rat race without proper due diligence.

Such people may try to pursue alternate vocation or profession to remain engaged, keep earning and also get out of the rat race after careful consideration and planning.

Best wishes;
X: @mars_invest

Ans: You have already taken very good steps. You are consistent with LIC, PPF, SIP, RD, and FD. At 34, you still have 16 years before your planned retirement at 50. This is a strong time window. You can definitely build a retirement plan that targets Rs. 2 lakh monthly income. Let us carefully assess and plan across all areas.

» Present snapshot
– Annual income is Rs. 15 lakhs.
– LIC premium is Rs. 1 lakh per year.
– PPF investment is Rs. 1.5 lakhs per year.
– SIP is Rs. 10,000 monthly.
– Recurring deposit is Rs. 23,000 monthly.
– FD corpus is Rs. 4 lakhs for 2 years.
– Retirement goal is at 50 years, only 16 years away.
– Post-retirement goal is Rs. 2 lakhs monthly income.

» Retirement goal clarity
– Rs. 2 lakhs per month is a high target.
– This equals Rs. 24 lakhs annually.
– At retirement, you need a large corpus to sustain it.
– The corpus must last for 30–35 years of retired life.
– Investments must balance safety and growth.
– Current investments are good but too conservative.

» Loan and liability check
– No loan or debt is mentioned.
– This is a positive point.
– Avoid new loans unless absolutely necessary.
– Being debt-free helps wealth creation faster.

» Insurance assessment
– You pay Rs. 1 lakh yearly for LIC.
– LIC policies usually give low returns.
– They mix insurance and investment.
– Insurance should protect, investment should grow.
– At your stage, insurance need is pure term cover.
– Suggest surrender of LIC policies.
– Reinvest proceeds in mutual funds with long-term view.
– Buy pure term plan with adequate cover separately.

» Current savings efficiency
– PPF is safe but return is low.
– SIP of Rs. 10,000 is growth-oriented but small.
– RD gives guaranteed returns but very low compared to inflation.
– FD of Rs. 4 lakhs is temporary and also low-return.
– Too much allocation is in low-yield products.
– Inflation will eat away value of these savings.
– More growth exposure is needed for your target.

» Importance of equity allocation
– Equity is essential for beating inflation.
– At 34, you can handle equity exposure.
– 16 years horizon is long enough to reduce risk.
– SIP should be increased step by step every year.
– Start with Rs. 25,000–30,000 monthly in equity mutual funds.
– Regular funds with Certified Financial Planner support are safer.
– Avoid direct funds, they do not provide monitoring or advice.
– Mistakes in direct funds can damage long-term compounding.
– Actively managed funds can beat inflation, unlike index funds.
– Index funds only copy market, no active strategy.
– Professional management ensures timely sector rotation and stock picking.

» Role of debt allocation
– Debt cannot be ignored.
– Keep PPF but do not increase further.
– Use some debt mutual funds for balance.
– Allocate 20–30% in debt for stability.
– Debt provides cushion during market fall.
– It also helps in systematic withdrawals after retirement.

» Future income stream plan
– After 50, salary income stops.
– You will need a systematic withdrawal plan.
– Mutual funds allow monthly withdrawals like pension.
– Called SWP, it creates fixed monthly income.
– This income is more tax-efficient than FD interest.
– Combine SWP with senior citizen schemes for safety.
– Do not depend only on one source.
– Diversification gives better stability in income.

» Tax efficiency awareness
– New tax rules affect withdrawals.
– Equity mutual fund long-term gain above Rs. 1.25 lakh is taxed at 12.5%.
– Short-term equity gain is taxed at 20%.
– Debt mutual funds are taxed as per income slab.
– FD interest is fully taxed each year.
– This shows mutual funds are more tax-efficient.
– Structuring withdrawals smartly reduces taxes and increases income.

» Increasing SIP power
– Current SIP is only Rs. 10,000 per month.
– Increase gradually to at least Rs. 40,000–50,000 monthly.
– Salary growth should be partly channelled into SIP increase.
– Even 10% rise every year creates a big impact.
– Do not wait to invest lump sum later.
– Regular growth ensures compounding works harder.

» Emergency fund creation
– Keep 6–12 months of expenses separately.
– Use liquid mutual funds or sweep FD for this.
– Emergency fund avoids breaking long-term investments.
– It protects retirement plan from sudden shocks.

» Health protection
– Health insurance is equally important.
– Hospital bills can destroy retirement corpus.
– Take comprehensive cover now when young.
– Premium will be lower and coverage wider.
– Review policy every few years.

» Lifestyle planning
– Rs. 2 lakh monthly after retirement is ambitious.
– Adjusting lifestyle to match corpus is also important.
– Avoid excessive spending during working years.
– Save at least 35–40% of income consistently.
– This discipline will secure retirement target.

» Estate and family planning
– Keep nominees updated for all assets.
– Make a simple will for clarity.
– Maintain a list of investments in one place.
– Inform family about insurance and health policy details.

» Psychological readiness
– Early retirement at 50 means longer retired life.
– Plan also for how to use free time productively.
– Some side income or consulting work can help.
– This reduces pressure on retirement corpus.

» Finally
– You are disciplined but need portfolio correction.
– LIC should be surrendered and redirected into mutual funds.
– RD and FD should be reduced gradually.
– Increase SIPs into actively managed regular funds with CFP support.
– Maintain some debt for safety, but focus on equity for growth.
– Build emergency fund and health cover.
– Target Rs. 40,000–50,000 monthly savings in mutual funds.
– With 16 years of compounding, Rs. 2 lakh monthly income is realistic.
– Careful planning and discipline will make this goal achievable.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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