Need Expert Advice?Our Gurus Can Help
Ramalingam Kalirajan |8342 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Apr 23, 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
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 - Apr 12, 2025
I have a self owned house in a tier 3 city where I want to shift at ground floor and rest of 1st floor is 6K per month. I am currently earning 1.25 L per month and saving 60K per month in MFs. I have 11L in EPF, 3 L in LIC to be matured in August this year. 7 L LIC I will get in 2030 which has 13K installment per year. I have 10 L in FD 30 L in MF. My current expense is 65K per month including fee of 3 children. 1 girl child in 9th class and 1 girl and 1 boy is in 1st class. How can I plan to retire at the age of 50 or earlier in case I lose my job seeing current market trends. I am 40 years of age currently. Consider that I need the have money for the education and marriage of all my children. I do not have any personal Health or term insurance as if now. I am currently having only company provides term, accident and Health insurance
Ans: Your situation needs a full-circle planning approach. You are doing a lot of right things already. But to retire by 50, with three kids, some real shifts are needed now.
Let’s break it down in clear steps.
?
Current Financial Position – Well Structured but Needs Protection
You are saving Rs 60K per month. This is a great habit. Keep it going.
?
Your mutual fund corpus of Rs 30L is growing steadily. This will support early retirement.
?
Rs 11L in EPF is helpful. But don’t rely only on EPF for retirement.
?
Rs 10L in FD is low-yield. Keep it for short-term goals only. Not for retirement.
?
LIC maturity of Rs 3L this year and Rs 7L in 2030 is okay.
?
The Rs 13K per year LIC premium till 2030 is not very useful.
?
Your LIC policies should be reviewed. They are not wealth creators.
?
If these LICs are traditional plans or endowment type, better surrender now.
?
Reinvest this amount in mutual funds through a Certified Financial Planner.
?
Emergency fund is not clearly mentioned. At least 6 months’ expenses should be liquid.
?
Rs 65K per month expense means Rs 4L as emergency fund is minimum.
?
Rent income of Rs 6K from first floor adds passive income. That’s good.
?
House ownership gives stability. But don’t depend on it for investments.
?
Protection First – You Must Act Now
You don’t have personal term insurance. This is risky.
?
Company cover will stop if you lose job. Buy term cover now. Minimum Rs 1 crore.
?
Premium will be less as you are 40. But act soon. Each year premium rises.
?
Health insurance is also missing. Take family floater for your spouse and kids.
?
Keep it outside company insurance. You need it during job loss or retirement.
?
Add Rs 50,000 top-up later as medical costs are rising.
?
Accident cover also needed personally. Not just company one.
?
Secure your family’s future. Protection first. Investment next.
?
Children’s Education & Marriage – Big Goals, Start Separate Plan
Girl in 9th class. Education cost will start within 3 years.
?
Other two kids are in class 1. You have 10–12 years for them.
?
Education costs are rising faster than inflation. Plan now.
?
Allocate part of your monthly SIPs for children’s education goals.
?
You can use children’s funds or goal-specific mutual funds for this.
?
Do not depend on your retirement fund for kids’ goals.
?
For daughters’ marriage, you have 10 to 15 years.
?
Set aside a portion of your mutual fund SIPs with that time frame.
?
Avoid gold or real estate for marriage funding.
?
Early Retirement Goal – Possible, but With Adjustments
You want to retire by 50. You have 10 years from now.
?
Your expenses are Rs 65K now. This will double in next 10 years.
?
If you retire by 50, your corpus should support 35 years of life.
?
Your current MF corpus of Rs 30L is a great start.
?
EPF and LIC proceeds will help, but not enough alone.
?
Continue your current Rs 60K SIP. Try to increase by 10% annually.
?
Add Rs 10K more SIP each year if possible. Helps beat inflation.
?
Retirement goal should have separate portfolio.
?
Keep higher portion in actively managed flexi-cap, large and mid cap funds.
?
Do not choose index funds. They work only in trending markets.
?
Index funds give market average returns. You need higher return for early retirement.
?
Actively managed funds beat index in India due to market inefficiency.
?
Also, you are using direct funds. These don’t offer expert guidance.
?
Direct funds lack behavioral guidance. This creates emotional decision errors.
?
Switch to regular funds through a CFP and MFD channel.
?
A Certified Financial Planner will give holistic investment discipline.
?
Avoid direct investing. It lacks strategy and continuous monitoring.
?
Also avoid investing via apps without advisor support. Long-term damage is hidden.
?
Insurance Maturity Planning – Reinvest with Clear Goals
Rs 3L LIC maturing in August should not go into FD again.
?
Reinvest into mutual fund goals like kids’ college or your retirement.
?
Use STP if market is high at that time.
?
Don’t delay deployment. Idle cash loses value.
?
Job Loss Fear – Let’s Prepare Mentally and Financially
You are worried about job loss. That’s natural in current market.
?
First, take personal health and term insurance immediately.
?
Second, strengthen your emergency fund to 12 months if job is unstable.
?
Third, diversify income. Rent income is good start.
?
Build skillset for freelance or part-time work if needed later.
?
Financial security is half preparation, half peace of mind.
?
Children’s Protection – Gift Them Stability
Take child education insurance? No. Better create dedicated mutual fund for each child.
?
Assign goal, duration, amount. Then invest SIP through CFP.
?
Teach your children financial habits. They will face future with confidence.
?
Taxation Angle – Use New Rules Well
Long-term capital gains above Rs 1.25L taxed at 12.5%.
?
Short-term capital gains taxed at 20%. Keep this in mind while redeeming.
?
Debt mutual fund redemptions taxed as per income slab.
?
Avoid frequent switching and redemption. Stay invested for long-term goals.
?
What You Can Start Immediately
Buy personal term and health insurance today.
?
Stop new LIC policies. Surrender old ones if not needed.
?
Move FD surplus into mutual funds slowly using STP.
?
Separate retirement, education, and marriage goals.
?
Don’t combine all in one SIP. Each goal needs different asset allocation.
?
Shift from direct funds to regular funds through a CFP.
?
Don’t fall for low expense ratio. Look for better returns, not cheaper funds.
?
Review progress with a Certified Financial Planner once in 6 months.
?
Finally
You are 40 now. With good planning, you can retire peacefully by 50.
?
But planning for early retirement must include:
Children’s future needs
Medical costs
Protection for your family
Passive income generation
?
Mutual fund SIPs alone won’t cover all.
?
You are already doing well with savings and discipline.
?
Now, layer it with goal planning, insurance, and regular fund guidance.
?
That will make your financial future strong and peaceful.
?
Best Regards,
?
K. Ramalingam, MBA, CFP,
?
Chief Financial Planner,
?
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Let’s break it down in clear steps.
?
Current Financial Position – Well Structured but Needs Protection
You are saving Rs 60K per month. This is a great habit. Keep it going.
?
Your mutual fund corpus of Rs 30L is growing steadily. This will support early retirement.
?
Rs 11L in EPF is helpful. But don’t rely only on EPF for retirement.
?
Rs 10L in FD is low-yield. Keep it for short-term goals only. Not for retirement.
?
LIC maturity of Rs 3L this year and Rs 7L in 2030 is okay.
?
The Rs 13K per year LIC premium till 2030 is not very useful.
?
Your LIC policies should be reviewed. They are not wealth creators.
?
If these LICs are traditional plans or endowment type, better surrender now.
?
Reinvest this amount in mutual funds through a Certified Financial Planner.
?
Emergency fund is not clearly mentioned. At least 6 months’ expenses should be liquid.
?
Rs 65K per month expense means Rs 4L as emergency fund is minimum.
?
Rent income of Rs 6K from first floor adds passive income. That’s good.
?
House ownership gives stability. But don’t depend on it for investments.
?
Protection First – You Must Act Now
You don’t have personal term insurance. This is risky.
?
Company cover will stop if you lose job. Buy term cover now. Minimum Rs 1 crore.
?
Premium will be less as you are 40. But act soon. Each year premium rises.
?
Health insurance is also missing. Take family floater for your spouse and kids.
?
Keep it outside company insurance. You need it during job loss or retirement.
?
Add Rs 50,000 top-up later as medical costs are rising.
?
Accident cover also needed personally. Not just company one.
?
Secure your family’s future. Protection first. Investment next.
?
Children’s Education & Marriage – Big Goals, Start Separate Plan
Girl in 9th class. Education cost will start within 3 years.
?
Other two kids are in class 1. You have 10–12 years for them.
?
Education costs are rising faster than inflation. Plan now.
?
Allocate part of your monthly SIPs for children’s education goals.
?
You can use children’s funds or goal-specific mutual funds for this.
?
Do not depend on your retirement fund for kids’ goals.
?
For daughters’ marriage, you have 10 to 15 years.
?
Set aside a portion of your mutual fund SIPs with that time frame.
?
Avoid gold or real estate for marriage funding.
?
Early Retirement Goal – Possible, but With Adjustments
You want to retire by 50. You have 10 years from now.
?
Your expenses are Rs 65K now. This will double in next 10 years.
?
If you retire by 50, your corpus should support 35 years of life.
?
Your current MF corpus of Rs 30L is a great start.
?
EPF and LIC proceeds will help, but not enough alone.
?
Continue your current Rs 60K SIP. Try to increase by 10% annually.
?
Add Rs 10K more SIP each year if possible. Helps beat inflation.
?
Retirement goal should have separate portfolio.
?
Keep higher portion in actively managed flexi-cap, large and mid cap funds.
?
Do not choose index funds. They work only in trending markets.
?
Index funds give market average returns. You need higher return for early retirement.
?
Actively managed funds beat index in India due to market inefficiency.
?
Also, you are using direct funds. These don’t offer expert guidance.
?
Direct funds lack behavioral guidance. This creates emotional decision errors.
?
Switch to regular funds through a CFP and MFD channel.
?
A Certified Financial Planner will give holistic investment discipline.
?
Avoid direct investing. It lacks strategy and continuous monitoring.
?
Also avoid investing via apps without advisor support. Long-term damage is hidden.
?
Insurance Maturity Planning – Reinvest with Clear Goals
Rs 3L LIC maturing in August should not go into FD again.
?
Reinvest into mutual fund goals like kids’ college or your retirement.
?
Use STP if market is high at that time.
?
Don’t delay deployment. Idle cash loses value.
?
Job Loss Fear – Let’s Prepare Mentally and Financially
You are worried about job loss. That’s natural in current market.
?
First, take personal health and term insurance immediately.
?
Second, strengthen your emergency fund to 12 months if job is unstable.
?
Third, diversify income. Rent income is good start.
?
Build skillset for freelance or part-time work if needed later.
?
Financial security is half preparation, half peace of mind.
?
Children’s Protection – Gift Them Stability
Take child education insurance? No. Better create dedicated mutual fund for each child.
?
Assign goal, duration, amount. Then invest SIP through CFP.
?
Teach your children financial habits. They will face future with confidence.
?
Taxation Angle – Use New Rules Well
Long-term capital gains above Rs 1.25L taxed at 12.5%.
?
Short-term capital gains taxed at 20%. Keep this in mind while redeeming.
?
Debt mutual fund redemptions taxed as per income slab.
?
Avoid frequent switching and redemption. Stay invested for long-term goals.
?
What You Can Start Immediately
Buy personal term and health insurance today.
?
Stop new LIC policies. Surrender old ones if not needed.
?
Move FD surplus into mutual funds slowly using STP.
?
Separate retirement, education, and marriage goals.
?
Don’t combine all in one SIP. Each goal needs different asset allocation.
?
Shift from direct funds to regular funds through a CFP.
?
Don’t fall for low expense ratio. Look for better returns, not cheaper funds.
?
Review progress with a Certified Financial Planner once in 6 months.
?
Finally
You are 40 now. With good planning, you can retire peacefully by 50.
?
But planning for early retirement must include:
Children’s future needs
Medical costs
Protection for your family
Passive income generation
?
Mutual fund SIPs alone won’t cover all.
?
You are already doing well with savings and discipline.
?
Now, layer it with goal planning, insurance, and regular fund guidance.
?
That will make your financial future strong and peaceful.
?
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.
MoneyReply
You may like to see similar questions and answers below
Ramalingam Kalirajan |8342 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jun 11, 2024
Ramalingam Kalirajan |8342 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jun 24, 2024
Ramalingam Kalirajan |8342 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Oct 09, 2024
Latest Questions
Shalini Singh |156 Answers |Ask -Follow
Dating Coach - Answered on May 14, 2025
Milind Vadjikar |1219 Answers |Ask -Follow
Insurance, Stocks, MF, PF Expert - Answered on May 13, 2025
Milind Vadjikar |1219 Answers |Ask -Follow
Insurance, Stocks, MF, PF Expert - Answered on May 13, 2025
Ramalingam Kalirajan |8342 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on May 13, 2025
Milind Vadjikar |1219 Answers |Ask -Follow
Insurance, Stocks, MF, PF Expert - Answered on May 13, 2025
Nayagam P P |4506 Answers |Ask -Follow
Career Counsellor - Answered on May 13, 2025
Ravi Mittal |585 Answers |Ask -Follow
Dating, Relationships Expert - Answered on May 13, 2025
Shalini Singh |156 Answers |Ask -Follow
Dating Coach - Answered on May 13, 2025
Nayagam P P |4506 Answers |Ask -Follow
Career Counsellor - Answered on May 13, 2025
Nayagam P P |4506 Answers |Ask -Follow
Career Counsellor - Answered on May 13, 2025
