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Ramalingam Kalirajan |10879 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

Question by Anurag on Jul 11, 2025Hindi

Sir, I am sharing my financial portfolio, my age is 33 years, married, no kids( planning for 1 kid in future) Mutual funds- 1.4 crore(equity)(sip 70k per month) Fd- 50 lakhs Ppf- 5 lakhs Epf- 40 lakhs Nps- 32 lakhs Gold- 10lakhs Immovable property- 70 lakhs Can I plan for early retirement from present job at age 42, what corpus will be good for early retirement?

Ans: ? Strong Start and Impressive Accumulation at a Young Age
– You are just 33 and have built a powerful financial base.
– Rs. 1.4 crore in equity mutual funds shows great discipline and long-term vision.
– A monthly SIP of Rs. 70,000 is excellent for wealth compounding.
– Rs. 50 lakhs in FD adds good safety and short-term liquidity.
– Rs. 40 lakhs in EPF and Rs. 5 lakhs in PPF add long-term protection.
– Rs. 32 lakhs in NPS builds future retirement safety with tax advantage.
– Rs. 10 lakhs in gold adds diversification.
– Immovable property is not recommended as a retirement asset due to low liquidity.

– Your awareness, savings habits, and planning mindset are truly rare and inspiring.
– At 33, this is a solid position for anyone dreaming of early retirement.

? Thinking of Early Retirement at 42
– You want to stop working in 9 years.
– This means planning for nearly 40 years without job income.
– Retirement from age 42 to 85 or 90 requires strong preparation.

– You must not only build a large enough corpus but also plan it wisely.
– Retirement at 60 needs less money than retirement at 42.
– Your money must work harder and longer for you.

? Key Factors to Decide Ideal Corpus for Early Retirement
– Monthly expenses after retirement are the key.
– Inflation adds pressure on long-term retired life.
– Higher inflation, longer life, and no active income increase required corpus.

– Medical expenses will rise as you grow older.
– Education expenses for child must be considered fully.
– One-time goals like house repairs, travel, or celebrations also matter.

– You may live another 45 to 50 years post-retirement.
– Your portfolio must support lifestyle and emergencies.

– As a broad estimation, your future corpus must replace 35–40 times your annual expenses.
– It should also provide for child education and medical reserves.

? Estimating Target Corpus by Age 42
– We assume monthly expenses of Rs. 75,000–Rs. 90,000 (post-retirement, inflation adjusted).
– For safe retirement at 42, your corpus must be around Rs. 6 to 7 crore.
– This should include all investment assets, excluding house and gold.

– Assets should be mostly in mutual funds, EPF, NPS, and some FD.
– The goal is to have growing and inflation-beating assets.
– Your current assets are around Rs. 2.77 crore (excluding property and gold).

– You are already on a good path.
– You need to continue building aggressively for the next 9 years.

? Assessment of Each Asset Class
– Mutual funds of Rs. 1.4 crore is the main driver of growth.
– Equity mutual funds grow faster than inflation if held long-term.
– Continue SIP of Rs. 70,000 without stopping.

– Use actively managed equity mutual funds.
– Index funds do not offer flexibility or fund manager expertise.
– They may not handle Indian market volatility well.

– Avoid direct mutual funds.
– Direct funds offer no personal advice or review support.
– Regular plans through MFD with CFP give proper tracking and corrections.

– EPF and NPS are long-term and tax-efficient.
– But they have restrictions in withdrawal.
– So they are not good for early income generation.

– Rs. 50 lakhs in FD is high.
– FD returns are taxable and below inflation.
– Shift part of FD to balanced mutual funds.

– PPF of Rs. 5 lakhs can grow slowly.
– Use it only as a conservative portion.
– Do not rely on PPF for regular income.

– Rs. 10 lakhs in gold is for diversification.
– Gold does not give regular income or stable growth.
– Avoid increasing gold beyond current value.

– Immovable property is not a liquid asset.
– Do not consider it for retirement cash flow.
– Maintenance cost and low rent make it inefficient.

? How to Structure Investments Going Forward
– For next 9 years, focus mainly on mutual funds.
– Use a proper mix of large, mid, and flexi-cap funds.
– Have some hybrid mutual funds as well.

– Use 70% of fresh monthly investment in equity funds.
– Put remaining 30% in debt or balanced funds for stability.
– Review portfolio every year with a Certified Financial Planner.

– If FD is not needed, move Rs. 25 lakhs from it gradually to mutual funds.
– Do not invest any more in real estate or gold.
– Keep your portfolio fully financial and flexible.

– Continue with EPF and NPS contributions till age 42.
– After 42, they can remain invested until retirement age.

– Build a medical buffer of Rs. 10–15 lakhs in liquid mutual funds.
– This is separate from your investment corpus.

– Create a child education fund goal separately.
– Estimate future education costs in today’s value.
– Plan mutual fund SIPs specifically for this goal.

? Withdrawal Planning After Age 42
– From age 42, you will need monthly income from investments.
– Do not redeem entire corpus at once.
– Use Systematic Withdrawal Plan (SWP) from mutual funds.

– SWP gives monthly income and keeps capital growing.
– It is tax-efficient and highly flexible.
– Use different mutual funds for different income phases.

– Equity mutual funds are ideal for early retirement income.
– Withdraw carefully to keep taxes low.

– Equity mutual fund LTCG above Rs. 1.25 lakh is taxed at 12.5%.
– STCG is taxed at 20%.
– Debt fund gains are taxed as per slab.

– Plan withdrawals across multiple funds to save tax.
– Don’t exhaust safe assets early.

– Use a Certified Financial Planner to create income buckets.
– Allocate different funds for early, mid, and later retirement phases.

? Medical and Insurance Planning
– Health expenses can grow faster than inflation.
– Keep a good health insurance cover for both you and your spouse.
– A base policy plus a top-up of Rs. 20–30 lakhs is recommended.

– Buy health insurance before age 40.
– Early buying means low premium and less exclusions.

– Build separate medical buffer in liquid mutual funds.
– Do not use retirement corpus for medical needs.

? Risk Management and Estate Planning
– Make nominations for all your investments and insurance.
– Write a Will by the age of 40.
– Update it every 5 years.

– Protect your portfolio from market panic.
– Avoid frequent fund switching.
– Stick to long-term strategy with regular reviews.

– Create clear goals for child’s education, retirement income, and lifestyle.
– Allocate funds separately and don’t mix short- and long-term goals.

? Key Action Points for You
– Continue Rs. 70,000 SIP with 70:30 equity-to-debt split.
– Move Rs. 25 lakhs from FD to mutual funds in phased manner.
– Build separate fund for medical needs and child education.
– Don’t depend on EPF, PPF, NPS for early income.
– Track and review portfolio every year.
– Stick to regular mutual funds with support from MFD and Certified Financial Planner.
– Avoid index funds, direct plans, annuities, and new real estate.

? Finally
– You are in a strong position already at just 33 years.
– You can achieve early retirement at 42 with smart planning.

– Build Rs. 6–7 crore investment corpus by that time.
– Use mutual funds as your main engine for growth and future income.

– Ensure all financial goals have proper fund allocation.
– Use SWP after retirement to generate monthly income.

– Stay focused, review yearly, and maintain financial discipline.
– With proper guidance, early retirement is possible without stress.

– You have the mindset, consistency, and savings habit to succeed.
– Your future is bright and well within your control.

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

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