5 Financial Planning Questions Answered Honestly (2026 Update)

Last Updated on April 8, 2026 by teamtfl

“The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing.” – Jean Baptiste Colbert

Every month I get questions in my inbox. Some are simple. Some carry the weight of a financial decision that has been worrying someone for months. I have answered thousands of these over 25 years – in person, in writing, on calls. What I share here are questions that come up repeatedly, answered the way I would answer a client sitting across from me.

These are real questions with real answers – not textbook definitions.

Q1: Tax on Sale of House Property

Question: My father is a retired senior citizen. He sold his house recently for Rs 40 lakh. What is the total tax liability? Can he park the money in a savings account while deciding what to do?

The tax depends on how long your father held the property. After Budget 2024, the rules have changed significantly:

If the property was held for more than 24 months (2 years), it is treated as Long-Term Capital Gain (LTCG). The tax rate is now 12.5% without indexation benefit (Budget 2024 removed indexation for property sold after July 23, 2024). The old rate was 20% with indexation – for properties bought before July 23, 2024, there is a grandfathering option your CA should evaluate.

If held for less than 24 months, it is Short-Term Capital Gain, taxed at your father’s applicable income slab.

To save LTCG tax, two options remain available:

First, under Section 54, reinvest the gains in a new residential property within 2 years of sale (or construct within 3 years). The new property must not be sold within 3 years of purchase.

Second, under Section 54EC, invest in specified capital gain bonds (NHAI, REC, PFC, IRFC) within 6 months of sale. The maximum deductible is Rs 50 lakh per financial year. The lock-in is 5 years.

On parking in a savings account: yes, he can. But the proceeds should ideally go into the Capital Gains Account Scheme (CGAS) at a nationalised bank if he plans to reinvest but needs time. Money kept in regular savings without CGAS filing loses the exemption benefit.

Q2: Education Loan – What to Check Before Taking One

Question: I want to take an education loan for my child’s higher education. What should I consider?

Before going to the bank, do this homework first. Research the course, institution, fee structure, and placement record. Calculate the expected starting salary after course completion versus the total loan amount including interest. A Rs 20 lakh loan for a course that typically places at Rs 5 lakh per year is a very different proposition from the same loan for a course that places at Rs 15-20 lakh.

Banks do not ask for security for loans up to Rs 7.5 lakh. Above Rs 7.5 lakh, collateral is typically required. Interest paid on education loans qualifies for deduction under Section 80E for 8 years from when repayment starts – this is worth factoring into the after-tax cost of the loan.

One important piece of advice: serve the interest during the moratorium period (while the child is still studying). Most borrowers skip this, allowing interest to capitalise. Serving the interest reduces the principal significantly and results in lower EMIs after graduation.

Q3: EPF and Pension After Retirement

Question: I am a Central Government employee who joined in September 2010. Rs 1,475 is deducted monthly towards EPF. How much will I accumulate and what pension can I expect at 60?

EPF is a defined contribution scheme – what you accumulate depends on contributions, growth, and time. With approximately 24 years of contributions (assuming retirement at 60) and assuming salary growth of 8% per year, your EPF corpus would be in the range of Rs 70-85 lakh from EPF alone. This is an illustration, not a projection – actual numbers depend on your exact salary progression and EPF interest rates, which change annually.

On pension: with this corpus, if you purchase an annuity at retirement, current annuity rates (approximately 5.5-6.5% for joint life with return of purchase price) would give you approximately Rs 32,000-45,000 per month depending on the annuity option chosen. Annuity income is fully taxable as income.

Important: NPS (National Pension System) now applies to Central Government employees who joined after January 1, 2004. Your EPF deductions suggest a Pre-2004 appointment – this matters for pension calculation under the old scheme. Verify your applicable pension structure with your HR department as it significantly changes the retirement income picture.

Q4: Best Retirement Investment When Starting at 40

Question: I earn Rs 25,000 per month and want to invest Rs 7,000-10,000 monthly for retirement. What is the best option?

There is no single “best” investment – the right allocation depends on your retirement age, current expenses, and risk tolerance. But here is the honest framework for someone starting retirement savings at 40 with a 15-20 year horizon:

Equity must be the primary asset class. At a 15-20 year horizon, equity is the only asset class that has historically beaten inflation by a meaningful margin in India. Debt gives you safety but not real wealth creation over this period.

A reasonable starting allocation: 60-70% in diversified equity mutual funds via SIP (spread across large-cap, flexi-cap, and mid-cap), 20-25% in EPF/PPF (tax-free and safe), 10% in NPS (tax benefit under 80CCD(1B)).

Do not name specific funds here – fund performances and structures change. Instead, choose SEBI-regulated, direct-plan mutual funds across market-cap categories, evaluated on 5-10 year track records. A SEBI-registered fee-only advisor can help you select the right current funds for your situation.

Most importantly: quantify your goal. Calculate how much you need at retirement (current monthly expenses × inflation factor × withdrawal multiplier). Work backwards to the monthly investment needed. Without this number, even good investments may not be enough.

Q5: What Should You Actually Expect From Financial Planning?

Question: What does financial planning involve? As a client, what should I expect?

At its most fundamental level, financial planning eliminates financial fear. The fear of what happens if you become unemployed, disabled, or die too soon. Planning cannot prevent those events. But it can prevent them from becoming financial disasters for your family.

What you should expect from a good financial planning engagement: a comprehensive review of your current financial situation (income, expenses, assets, liabilities, insurance), a written plan connecting your resources to your goals with specific timelines, and a clear picture of whether you are on track – and what needs to change if you are not.

You should also expect honesty. A planner who only tells you what you want to hear is not a planner – they are a salesperson. The uncomfortable conversations about insufficient corpus, under-insurance, or over-spending are the most valuable ones.

What you should NOT expect: guaranteed returns, market predictions, or miracles. Financial planning cannot create wealth from nothing. It can help you make the most of what you have, protect it from unnecessary losses, and ensure it goes where it is supposed to go.

“The goal of financial planning is not to make you rich overnight. It is to give you the best possible chance to live the life you want – financially worry-free.”

– Hemant Beniwal, CFP, CTEP | Founder, RetireWise

Read next: What is Financial Planning? The 6-Step Process That Actually Works

Financial planning questions are not signs of ignorance. They are signs that you are taking your financial life seriously enough to seek clarity. Keep asking. The answers – and the decisions that follow – are where financial security actually gets built.

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