The starting point

Client: 62-year-old recently retired bank manager. Spouse age 58. One adult child, financially independent.

Portfolio (audit):

  • 17 mutual funds across 6 AMCs — accumulated over 20 years on agent recommendations
  • 4 endowment policies still in premium-paying mode, all with sub-5% IRR
  • ₹15L in a single bank FD
  • ₹95L in equity mutual funds — 80% equity exposure at age 62
  • No health insurance beyond a basic ₹5L corporate policy that lapsed at retirement
  • Expected monthly expense: ₹70,000

The problems

  1. Wrong asset allocation for life stage. 80% equity at 62 means a market crash could permanently impair retirement income.
  2. Endowment drag. ₹2L/year going into policies returning 4–5% — money trapped at sub-FD returns.
  3. No health cover. One hospitalisation could wipe out 2 years of expenses.
  4. No income mechanism. No SWP set up. Retirement income was coming from ad-hoc redemptions.
  5. Concentration: 17 funds were actually 4 versions of the same Nifty 50, plus 6 sectoral funds bought during fads.

The plan we built

Step 1: Protection first

  • Family floater health policy ₹15L + super top-up ₹40L (~₹38K annual premium total)
  • Separate ₹10L senior citizen policy for the spouse

Step 2: Right-size equity

Reduced equity from 80% to 45% via a tax-aware switch over 18 months (to harvest LTCG within the ₹1.25L annual exemption).

Step 3: Consolidate to 4 funds

  • 1 flexi-cap (equity core)
  • 1 large & mid-cap (equity satellite)
  • 1 short duration debt fund
  • 1 conservative hybrid (for the SWP)

Step 4: Set up an SWP for income

₹85,000/month SWP from the conservative hybrid fund. Tax-efficient because each redemption is partly capital, partly gain — and gains within the ₹1.25L LTCG exemption are tax-free.

Step 5: Surrender or paid-up endowments

Two policies past 5 years made paid-up (no further premiums, retain surrender value). Two policies surrendered after analysing the IRR math; freed up ₹1.4L/year of premium cash flow.

The outcome (18 months later)

  • Monthly income: ₹85,000 stable, tax-efficient SWP
  • Equity allocation: 45% (age-appropriate)
  • Health cover: ₹55L combined family + ₹10L senior
  • Number of funds: 4 (from 17)
  • Annual reviews scheduled, with 3 mini-reviews when markets move >10%
"For the first time in 20 years, I actually understand what I own and why."

Names and identifying details changed. This is one example, not a guarantee — your situation will be different. Book a free call if you'd like a similar review for your own portfolio.