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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 29, 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 - Jul 11, 2025Hindi

We are senior citizens nearing 70. I have 3 daughters educated and working and self supporting.i have a home which I want to sell . It's 5 cr. but 80% cash where I live. So holding it till govt increases circle rate which is just 15 percent. I spent a huge fortune on my daughters for education. Now I want to live comfortably with some standard of a well of man. I retired with 30000 income monthly. No stocks share,etc. Spent on daughters not expecting or wanting reciprocity. Advise.

Ans: You’ve shown deep care and strength in supporting your daughters through their education. Now, as senior citizens near age?70, planning your next phase with dignity and comfort is vital. You own a home valued at around Rs?5?crore, but due to circle rate, excess property transaction tax is high. Your only income is a Rs?30,000 monthly pension. Let’s build a structured 360?degree financial plan to ensure you live comfortably in your well?earned standard of life.

? Clarify your goals and mindset
– You want peace, dignity, and financial independence for the rest of life
– You are not relying on children, and that is emotionally empowering
– Your primary concern is to fund living expenses, healthcare, and lifestyle
– You may want small travel, family visits, social activities—plan around that

? Income and expense snapshot
– Pension provides Rs?30,000 every month
– Likely insurance payouts or other income sources may exist—check them
– Living expenses may include food, utilities, medicines, personal upkeep
– Estimate monthly lifestyle cost—does Rs 30,000 cover it or shortfall exists?
– If expenses exceed pension by even Rs 5–10 thousand, gap must be covered

? Strategic options for the house asset
– Home is estimated at Rs?5?crore
– Property is nearly fully paid with 80% cash invested in house
– Circle rate undervalues property, leading to high tax on sale profit
– But moving to smaller home or loan cover may still net better buying power
– Alternatively, consider partial sale (e.g., share or portion) or lease to family
– Or delay sale until circle rate improves—but weigh opportunity cost of locked capital

? Immediate?term action: estimate expense vs income
– Track your monthly spend for two to three months
– Determine if pension alone suffices or you need Rs?5–10?thousand buffer
– If there’s shortfall, plan either sell portion of asset or start safe investment

? Option to monetize asset gradually
– If circle rate remains low, big sale triggers high tax—but partial sale may minimize tax
– Consider partitioning property into smaller plot or portion to sell at lower ? gains
– Use proceeds to build fixed income portfolio or safe debt instruments
– Keep rest property for emotional attachment or long-term hold

? Building a stable income roadmap
– You could sell partial property say 1–2 crore worth
– Invest in low-risk avenues like liquid funds, short-duration debt, senior citizen fund
– Monthly yield could be reinvested or drawn as systematic withdrawal
– Maintain some capital in immediate-access fund for liquidity

? Health cost and insurance considerations
– At age near 70, medical expenses become central concern
– Do you hold health insurance? If yes, review coverage adequacy and renewal terms
– If not insured, attempt to purchase senior citizen health policy with decent sum assured
– But premiums may be high due to age, so evaluate return?on?investment
– Set aside dedicated corpus—say Rs?20?30?lakh—for unforeseen medical needs

? Lifestyle funding and legacy planning
– Plan for travel, occasional gifting, personal hobbies—allocate monthly budget
– Consider making a living will or nominee instructions if you want to keep control
– If property is to be passed to daughters later, document your intention clearly

? How to invest the sale proceeds or savings
– Equity funds risk too high for elderly investors
– Also, index funds mirror market volatility without manager intervention
– Best approach: allocate primarily to debt, liquid, low-duration funds
– Small allocation (max 10–15%) to balanced/hybrid funds may provide slightly higher yield
– Use regular plans via a certified CFP?led MFD, not direct plans—guidance matters now more

? Example allocation of Rs 2 crore partial proceeds
– Liquid or ultra-short debt fund: Rs 50?lakh for emergencies
– Short-duration debt funds: Rs?50?lakh for yield buffer
– Senior citizen long-term deposit or debt fund: Rs?50?lakh for monthly interest payout
– Hybrid fund (conservative equity mix): Rs?20?lakh for slightly higher growth
– Remaining Rs?30?lakh in fixed deposit or recurring deposit for predictable income

? Generating monthly income and buffer
– Systematic withdrawal from debt/hybrid fund or interest from deposits may provide Rs?20–25k/month
– Combined with Rs?30k pension, you can have Rs?50–55k monthly income
– This covers present lifestyle and hedges health costs
– Keep extra liquidity separate for medical emergencies

? Balance between inflation protection and capital protection
– Most of your capital should remain safe and low volatility
– Too much equity exposes you to market risk, inappropriate at senior age
– A small hybrid allocation preserves purchasing power in the long?term
– Annual review ensures your asset allocation matches risk appetite

? Tax planning after selling property
– Capital gains tax may apply based on sale proceeds
– If you invest in specified bonds or long-term instruments, you may claim exemptions
– Also, fixed deposit or debt fund interest is taxed as per your bracket
– Plan withdrawals smartly with help from CFP to minimize tax impact

? Emergency fund remains essential
– Keep liquid fund of at least 6 months’ living expenses
– Use it before touching capital during medical or urgent crisis
– Don’t run down all reserves in one go

? Insurance and legal clarity
– If any investment?cum?insurance policies (ULIP/LIC) exist, review performance
– If underperforming, surrender and reinvest money in mutual funds or safe deposits
– Keep life cover minimal at your age; health cover is priority
– Ensure legal will and nomination papers are updated

? Longevity and lifestyle provisions
– You may live past age 75–80; plan corpus for 10–15 more years of living
– Include provisions for assisted living or caretaker help if needed
– Healthcare inflation rises faster than general inflation—build buffer accordingly

? Emotional well?being and independence
– Maintaining some capital independence gives dignity and self?respect
– Avoid total financial dependency on daughters, though they may support willingly
– Keep property or income sources in your control to the extent possible

? Annual review and professional guidance
– Set annual review with Certified Financial Planner
– Assess fund performance, expense trends, and tax changes
– Rebalance allocation as capital ages or income drops
– Increase conservative yield allocation if capital diminishes

? Final insights
– You have strong asset in form of property and steady pension
– Partial sale of house when circle rate improves gives liquidity without stress
– Invest proceeds in low?risk instruments for steady monthly income
– Build a buffer for healthcare and emergencies before lifestyle spending
– Avoid equity risk and index/direct funds at your life stage
– Opt for regular plan mutual funds with CFP?led support if you choose hybrid component
– Prioritize cash flow, protection, and dignity over aggressive growth
– With strategic planning and regular review, you can live comfortably and independently
– Your legacy stays with daughters without burden or worry

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

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