Sir, I want to know about my retirement plan that How much i should invest for next 10years so that I am able to withdraw 50000pm as monthly expense after 10years. My financial details are as follows... Homeloan remain to repay 600000...

Sir, I want to know about my retirement plan that How much i should invest for next 10years so that I am able to withdraw 50000pm as monthly expense after 10years. My financial details are as follows... Homeloan remain to repay 600000 Education Loan 1500000 Monthly Expense Rs.40000 Monthly Homeloan EMI RS 10000 BAJAJ FINANCE GOAL ASSURE Monthly premium rs12000 Life insurance rs32000 anually Mediclaim rs31000 anually One 2bhk flat (free hold property) PF -rs. 2500000 Thanks

Ans: Dear sir ,
???? I would also strongly suggest working with a QPFP / Financial Planner to create a detailed retirement cash flow plan and fund monitoring strategy.

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

Ans: Understanding Your Current Financial Snapshot
Your current financial status shows good discipline and foresight.

– Age is 45.
– Monthly income is Rs. 2 lakhs.
– SIPs of Rs. 20,000 running since 5 years.
– NPS contribution of Rs. 20,000 monthly since a year.
– Health cover of Rs. 5 lakhs.
– Term insurance of Rs. 25 lakhs.
– Additional life insurance worth Rs. 20 lakhs maturing in 2028.
– Emergency fund of Rs. 10 lakhs.
– Own independent house in Hyderabad.
– No loans.
– Two children aged 13 and 10.

You’ve done well in many areas. But retirement needs focused adjustments now.

Assessing the Gaps in Retirement Planning
You want to retire in 10 years. That means at age 55.

– Retirement corpus should last 30 years post-retirement.
– Inflation will impact lifestyle expenses over time.
– Children’s education and marriage needs will arise soon.
– Health care costs will grow sharply with age.
– Existing investments need deeper review.

You must now assess how much monthly income you’ll need after retirement.
Let’s assume lifestyle stays similar, and no rental income from the house.

Re-evaluating Your Insurance Coverage
Let’s start with life and health protection.

– Rs. 25 lakh term cover is low for your income.
– Ideally, term cover should be 10-12 times your annual income.
– That’s around Rs. 2 crore for your current earnings.
– You can enhance the term cover for next 10 years only.

– Health insurance of Rs. 5 lakhs is not sufficient.
– For a family of four, aim for Rs. 15 to Rs. 20 lakhs coverage.
– Add super top-up of Rs. 10 to 15 lakhs with Rs. 5 lakh deductible.

Review your life insurance maturing in 2028.
It’s not effective for investment or protection.
Such policies give low return and insufficient coverage.
If this is an investment-cum-insurance or ULIP, surrender it.
Reinvest the maturity amount through mutual funds via CFP-backed MFD.

Emergency Fund – Well Done
Rs. 10 lakhs as emergency fund is adequate for now.

– Keep it in liquid funds or FD for easy access.
– Review every year and adjust if monthly expenses increase.
– Emergency fund should be equal to 6-12 months expenses.

Review of Your Current SIPs
Rs. 20,000 SIP running for 5 years is a great habit.

– Let’s review where it is invested.
– If invested in direct funds, please note the concern.

Direct mutual funds come without advisory support.
Without proper guidance, you might choose wrong funds or exit too early.
It is always better to invest via regular plan through a CFP and MFD.
That way, you get regular portfolio review and personal guidance.

– If you are invested in index funds, there’s more to consider.
– Index funds are unmanaged and track the market.
– They cannot outperform the market.
– During market fall, they fall equally.
– Actively managed funds are better for long-term growth.
– Fund managers try to reduce risk and outperform benchmarks.

Continue your SIPs but ensure proper scheme selection and asset allocation.
Consult a CFP-led team to ensure your SIPs match your retirement goals.

NPS Investment – Understand the Role
Rs. 20,000 monthly in NPS is a good start for retirement.

– But NPS has limits.
– After 60, only 60% can be withdrawn as lump sum.
– Remaining 40% must be used to buy annuity.
– Annuities give very low returns and no flexibility.
– NPS withdrawals are taxed as per slab too.

So NPS should be just one part of retirement plan.
Don’t depend solely on it for retirement income.

Retirement Planning for 10 Years Ahead
Now we plan for your main goal – peaceful retirement at 55.

– You have 10 years to build enough corpus.
– This needs aggressive but balanced investing.
– Continue with mutual fund SIPs. Increase it by 10% every year.
– Invest across large, mid, and flexi-cap funds.
– Include hybrid funds for stability.
– Get proper rebalancing done yearly.

– Shift money from poor performing policies.
– Exit from endowment or ULIPs after consulting CFP.
– Redirect that money to mutual funds.
– Avoid real estate. It is illiquid and not suited for retirement goals.

– Start a separate goal-based SIP for retirement.
– Keep this separate from education or marriage goals of children.
– If possible, save 30-35% of your income now.
– Since no loans or EMIs, you can invest more every month.

– Include international mutual funds if needed for diversification.
– These are actively managed and give global exposure.

Track retirement corpus every year.
Review fund performance with a CFP regularly.

Children’s Education and Marriage Goals
Your daughter is 13. Big expenses in next 5-7 years.
Your son will need it in about 8-10 years.

– Education costs are growing fast.
– Start separate SIPs for their goals.
– Use hybrid and balanced advantage funds for medium term.
– Review portfolio each year based on fee requirements.
– For marriage goal, keep timeline in mind.

Don’t mix these goals with retirement fund.
Prioritise education over marriage.

Tax Efficiency and Exit Strategy
New tax rules on mutual funds should guide your planning.

– Equity mutual funds:
LTCG above Rs. 1.25 lakh taxed at 12.5%.
STCG taxed at 20%.

– Debt mutual funds:
Taxed as per income slab, whether long or short term.

Plan withdrawals post-retirement to reduce tax burden.
Don’t withdraw entire corpus at once.
Use Systematic Withdrawal Plans (SWP) post-retirement.

– SWP from mutual funds gives regular income.
– Also gives better tax management than pension or annuities.

Estate and Will Planning
You’ve built good wealth. Protect it for your family.

– Make a clear and valid Will now.
– Mention asset allocation and nominee details.
– Add details about mutual fund folios, insurance, NPS etc.
– This ensures smooth transition for your family.

Inform spouse about where and how assets are held.
Keep a written record of all investments.

Regular Review and Course Correction
Retirement plan is not a one-time activity.

– Review portfolio once every year.
– Rebalance asset allocation if needed.
– If equity markets do well, reduce equity exposure after age 52.
– Shift to hybrid and balanced funds closer to retirement.
– Avoid panic-selling during market corrections.

Take help of a Certified Financial Planner regularly.
They guide with behavioural, technical, and tax aspects.

Avoid investing on friend’s or relative’s advice.
Choose advisors who are certified and experienced.

Finally
You have a strong foundation in place already.

– No debt.
– Good income.
– Regular SIPs.
– NPS contributions.
– Emergency fund.
– Term insurance.

Now build upon this foundation with a goal-specific approach.
Ensure every rupee is working for your retirement target.
Plan tax-efficient withdrawals post-retirement.
Separate goals for children’s future.
Upgrade insurance for life and health.
Invest only in professionally managed mutual funds.
Don’t choose index or direct funds without guidance.
Avoid real estate or annuities.

With right planning and support, retiring at 55 is possible for you.
360-degree financial clarity will make your journey peaceful.

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