Hi sir, I am sneha 30 year old. I am earning 90k per month. I have 40k emi and one hdfc ulip of 1.3 lakh per year. Other than that I have not invested anywhere. Ppf and pf every month 5 k. I m planning to invest 20 k in hdfc pension scheme and 10k in SIP is it good idea?

Ans: You are 30 years old, earning Rs. 90,000 per month. You are currently managing a home loan EMI of Rs. 40,000, investing Rs. 1.3 lakh yearly in a ULIP, and contributing Rs. 5,000 per month to PF and PPF. You are now planning to invest Rs. 20,000 in a pension product and Rs. 10,000 in SIPs.

Let us now assess this from all angles and build a proper strategy for you.

Your Present Financial Structure
You have a stable income of Rs. 90,000.

EMI is Rs. 40,000 monthly. That’s about 44% of your income.

You contribute Rs. 5,000 monthly in PF and PPF.

You pay Rs. 1.3 lakh per year towards a ULIP.

That comes to around Rs. 10,800 monthly outgo.

After EMI and ULIP, you have Rs. 39,200 left.

From that, you plan to invest Rs. 30,000 more every month.

You are disciplined. That is the right first step. You are already doing well by saving.

Now, let’s make your savings work harder and smarter.

Review of Your ULIP
You mentioned you pay Rs. 1.3 lakh per year in an HDFC ULIP.

ULIP means Unit Linked Insurance Plan.

It combines investment and insurance.

Most ULIPs have high charges in the first 5 years.

Returns from ULIPs are usually low.

Flexibility is also very limited.

Insurance cover is also not enough.

ULIP is neither a good insurance product nor a good investment tool.

Action Plan:

Check how many years it has completed.

If it is under 5 years, assess if surrender charges are high.

If above 5 years, consider surrendering the plan.

Redeem and reinvest the proceeds in mutual funds.

In future, do not buy investment-cum-insurance policies.

Emergency Fund Is Must
You have EMI pressure of Rs. 40,000 monthly.

Any emergency can put stress on cash flow.

Keep at least 6 months’ EMI aside.

For you, this is Rs. 2.5 lakh to Rs. 3 lakh.

Keep this in FD or liquid mutual fund.

Do not invest this in equity or long-term funds.

This is your safety cushion. Build this first.

PPF and PF Contributions
You already contribute Rs. 5,000 monthly.

These are long-term products.

PPF is tax-free and gives decent returns.

PF will support your retirement.

Continue these contributions. They add stability to your retirement.

But they are not enough on their own. You need market-linked growth too.

Plan to Invest Rs. 20,000 in Pension Scheme
You are considering a pension scheme.

Pension schemes usually mean retirement products like annuities or insurance-linked plans.

Disadvantages of pension plans:

Most come with long lock-in.

Low liquidity during emergencies.

Returns are poor after charges.

Final payout is taxed.

Limited control over your money.

These are not ideal for someone still in their 30s.

You have better options.

Better Retirement Plan Than Pension Schemes
If you want to build a retirement corpus:

Use equity mutual funds.

Start SIPs in multi-cap or flexi-cap funds.

Add large-cap fund for stability.

Invest through regular funds via MFD with CFP.

Do not invest directly in mutual funds without guidance.

Problems with direct funds:

No help in choosing suitable funds.

No monitoring or rebalancing.

Wrong decisions can cause losses.

You lose emotional support during market falls.

Benefits of regular funds via CFP:

Goal-based fund selection.

Portfolio tracking and review.

Asset rebalancing on time.

Long-term handholding.

Start early and stay disciplined for retirement goals.

Your Rs. 10,000 SIP Plan
You want to begin SIP of Rs. 10,000.

This is the right step.

But Rs. 10,000 is not enough considering your future goals.

Start with Rs. 10,000 now and increase it gradually.

Choose funds based on your risk level and time horizon.

Suggestions:

Use flexi-cap fund for long-term.

Add one aggressive hybrid fund.

Do not use index funds. They lack downside protection.

Why not index funds:

They invest blindly in top 50 or 100 stocks.

They cannot avoid overvalued stocks.

They fall as much as the market during crashes.

No fund manager to take protective calls.

No chance to outperform the market.

Actively managed funds can perform better with expert handling.

Tax Efficiency of Mutual Funds
Understand the latest tax rules.

Equity mutual funds:

Long-term gains above Rs. 1.25 lakh taxed at 12.5%.

Short-term gains taxed at 20%.

Debt mutual funds:

Gains taxed as per your tax slab.

You can manage your tax by staying invested for long.

Avoid short-term withdrawals.

Life Insurance Planning
You have a ULIP. But that is not a good insurance cover.

It will not give your family enough protection.

You need a separate term insurance plan.

How much cover:

Cover should be 15 to 20 times your income.

You earn Rs. 90,000 per month.

So, take Rs. 1.5 crore term cover.

Premium will be around Rs. 12,000 yearly.

Do not mix insurance with investment.

Buy only pure term plan from reputed insurer.

Ideal Monthly Investment Plan for You
Let’s build your monthly budget properly.

Income: Rs. 90,000

EMI: Rs. 40,000

ULIP: Rs. 10,800 (till surrender)

Balance: Rs. 39,200

Plan now:

Rs. 10,000 in SIP (equity mutual funds)

Rs. 5,000 in hybrid mutual funds

Rs. 3,000 in debt or liquid funds

Rs. 3,000 in PPF/PF (already going)

Rs. 5,000 savings for emergencies

Keep Rs. 10,000 monthly buffer

Do not invest in any pension product now.

They are rigid and not suitable for you today.

Long-Term Goal Planning
In future you may plan:

Children’s education

Own home

Retirement

Health corpus

Start with mutual fund SIPs today. Increase amount as income grows.

Review goals yearly. Adjust investments with your Certified Financial Planner.

Common Mistakes to Avoid
Please don’t:

Invest in pension or annuity plans.

Invest in traditional insurance plans.

Take policies from friends or relatives blindly.

Invest in direct mutual funds without help.

Follow index funds or trending funds from social media.

These often harm long-term wealth creation.

Final Insights
Sneha, you have a disciplined mindset.

That is the biggest strength.

But your current investments need realignment.

ULIP is not useful. Pension schemes are not flexible.

Build your plan through equity and hybrid mutual funds.

Take help from a trusted Certified Financial Planner.

Keep it simple. Stay committed.

Start now. Your future self will thank you.

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