Retirement Planning Inquiry - Aiming for Early Retirement I'm a 35-year-old married man with two children (an 8-year-old son and a 2-year-old daughter) and a homemaker wife, living in my own house in a Tier 3 city. My goal is to retire by age 45. Here's a snapshot of my current financials: Income: INR 2 Lakhs/month (post-tax take-home salary) Monthly Expenses: INR 60,000 Investments & Assets: My Portfolio: Mutual Funds (Self): INR 14 Lakhs corpus, with recent SIPs increased to INR 96,000/month. PPF: INR 21 Lakhs (maturing April 2029) PF: INR 11 Lakhs Property: INR 55 Lakhs Gold: INR 15 Lakhs FD (Emergency Fund): INR 5 Lakhs NPS: INR2 Lakhs corpus, INR 50,000/year contribution Wife's Portfolio: Mutual Funds: INR1 Lakh corpus, with INR 7,500/month SIP. FD: INR 6 Lakhs Children's Accounts: Daughter (SSY): INR 4.8 Lakhs Son (PPF): INR 4.76 Lakhs My Current SIP Allocation: ICICI Nifty Next 50 - INR 15k Invesco Mid Cap - INR 18k Quantam Gold Saving Fund - INR 6k MO BSE Enhanced Value Index Fund - INR 6k Axis Greater China FOF - INR 6k HDFC Small Cap - INR 18k Bajaj FS Flexi Cap - INR 6k Edelweiss US Technology FOF - INR 6k Kotak India EQ Contra Fund - INR 6k Wife's Current SIP Allocation: Nippon Small Cap - INR 2.5k MO Mid Cap Fund - INR 2.5k HDFC Nifty 500 - INR 2.5k I also have a INR 5 Lakh group health insurance cover. Given my financial situation and retirement goal, is my current approach sound? I'm looking for advice on optimising my portfolio and overall strategy.

Ans: You are 35 years old.
You want to retire by 45.
You have 10 years to build your wealth.
You have a monthly income of Rs. 2 lakhs.
Your expenses are Rs. 60,000 per month.
So, your monthly surplus is Rs. 1.4 lakhs.
This surplus is your real strength.
You already invest Rs. 96,000 monthly in mutual funds.
This shows good discipline.
You live in your own house.
That removes the burden of rent or EMI.
You also have a homemaker wife and two young children.
So, you carry full financial responsibility.
That must be managed carefully.

Wealth Snapshot Review

Mutual Funds (Self): Rs. 14 lakhs

Mutual Funds (Wife): Rs. 1 lakh

PPF (Self): Rs. 21 lakhs

PF: Rs. 11 lakhs

NPS: Rs. 2 lakhs

Gold: Rs. 15 lakhs

Emergency FD: Rs. 5 lakhs

Wife's FD: Rs. 6 lakhs

Property: Rs. 55 lakhs (self-occupied)

Daughter SSY: Rs. 4.8 lakhs

Son PPF: Rs. 4.76 lakhs

Your mutual fund SIPs are well distributed.
But some funds in your portfolio are not ideal.
There are index funds, direct plans, and international funds.
These may not help long-term wealth creation.

Problems With Index Funds

Index funds only copy the market.
They don’t create extra returns.
They don’t protect downside in crashes.
They don’t shift between sectors.
They can underperform in sideways markets.

Actively managed funds adjust during tough times.
They outperform over 10+ year periods.
They are managed by skilled professionals.
So, remove index funds from your SIP.
Shift to actively managed regular plans.
Invest only through MFDs with CFP support.

Issues With Direct Mutual Funds

Direct funds look cheaper but are risky.
No guidance is available during tough markets.
There is no behavioural or strategy support.
No rebalancing or switching is done.
Investing alone can lead to wrong choices.
You may also miss important portfolio reviews.

Regular plans provide you access to a Certified Financial Planner.
They help with asset allocation.
They give goal-based support.
They reduce emotional investing errors.
So, shift all SIPs to regular funds.
Choose only actively managed categories.

Asset Allocation Recommendations

Your retirement goal is 10 years away.
So, you need to be high on equity.
But you must split it into types:

Large cap funds

Flexi cap funds

Multi cap funds

Mid and small cap (only up to 30%)

Contra or value funds

International funds are not required.
Currency risk is high.
Regulatory changes often affect them.
They can also underperform India for long periods.
Avoid China funds or US tech-specific funds.
Instead, focus on Indian diversified funds.

Gold allocation is okay but don't increase it.
Gold is not for retirement wealth.
Keep it for emergency or marriage gifting.

Debt instruments like PPF and PF are good.
But they cannot beat inflation alone.
So, don’t over invest in them.
Use them for stability, not growth.

Optimised SIP Plan Suggestion

You invest Rs. 96,000 monthly.
That is around 48% of your take-home pay.
This is very good.
But you must shift to quality funds.
Avoid index and thematic international exposure.

Start SIPs in:

Large cap

Flexi cap

Multi cap

Balanced advantage

Mid cap (within 20% max)

Small cap (within 10% max)

Equity savings fund

Review every 12 months.
Don’t skip SIPs in bad market.
Increase SIPs by 8-10% yearly.
Don’t withdraw unless emergency.
Match SIPs to specific goals like retirement, education, etc.

Retirement Planning Focus

To retire by 45, you need a big corpus.
You will live 35 more years post-retirement.
Inflation will erode your money.
So, aim for Rs. 5 to 6 crores.
This will create monthly income for life.

You must invest for this goal alone.
Do not use this money for education or other needs.
Create separate plans for children’s goals.
Your current SIP will grow well if continued and increased yearly.
Also, your PF, PPF, and NPS will support the base.

Avoid spending on unnecessary luxury items.
Delay car or gadget upgrades.
Avoid real estate investments.
Don't lock money in long-term FDs.

Children’s Education Planning

Your son is 8 years old.
You need funds in 10 years.
Your daughter is 2.
Her college goal is 15 years away.
So, you have time.
Create two goal-based SIPs for each child.
Use equity mutual funds for both.

Don't mix their funds with your retirement corpus.
Keep their PPF and SSY accounts going.
But that is not enough.
Top-up with mutual funds regularly.

Health Insurance and Protection

You have Rs. 5 lakh group insurance.
That is not enough.
Add a family floater for Rs. 25 lakh.
Also take a Rs. 25 lakh top-up cover.

You are the only earning member.
So, take term insurance for Rs. 1.5 to 2 crore.
This will protect your family.
Don’t buy ULIP or endowment policies.
If you already have LIC policy, surrender it.
Reinvest in mutual funds.

Emergency Fund Adequacy

You have Rs. 5 lakh in FD.
Your expenses are Rs. 60,000 monthly.
So, you have 8-9 months of buffer.
This is good.
Keep it updated as expenses grow.
Don't use this for any investments.

What You Must Avoid

Don’t invest in index or ETF-based funds

Don’t continue direct funds

Don’t add foreign or thematic funds

Don’t delay health and life insurance

Don’t use retirement funds for other goals

Don’t skip yearly portfolio review

Don’t try to time the market

Don’t take loans to invest

Don’t invest in real estate

Don’t copy others’ portfolio

Finally

Your retirement dream at 45 is achievable.
You are disciplined and consistent.
You are investing more than 40% of your income.
This is a strong base.

Now you must:

Remove index and direct funds

Use only regular actively managed funds

Create separate portfolios for each goal

Increase SIPs every year

Review with a Certified Financial Planner

Stay consistent, not aggressive.
Focus on simplicity, not complexity.
Protect what you grow.

This will give you wealth and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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