In this edition of the reader story, “Here we are again with our fifth yearly audit. If you missed the earlier ones, you can read our previous audits on freefincal below. A huge thanks, Pattu sir, freefincal community and AIFW group on Facebook, which has been the constant source of guidance.”
A very brief background: we got married in 2020, just before the pandemic. I am Arka, currently 38, and I work in IT Consulting. Rupali is in Tax Consulting. We started serious financial planning only post-marriage in 2020 — a late start, but we are making up for it.
Our previous audits
- How a young couple is trying to balance travelling and investing
- How a young couple tries to balance their personal and financial aspirations
- How a couple reached their desired asset allocation after starting late
- How a couple navigate their finances through travel, life and long-term plans
Opinions expressed in reader stories do not necessarily represent the views of freefincal or its editors. We must appreciate multiple solutions to the money management puzzle and empathise with diverse views. Articles are typically not checked for grammar unless it is necessary to convey the right meaning and preserve the tone and emotions of the writers.
If you would like to contribute to the DIY community in this manner, send your audits to freefincal AT Gmail dot com. You can publish them anonymously if you wish.
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Please note: We welcome such articles from young earners who have just started investing. See, for example, this piece by a 29-year-old: How I track financial goals without worrying about returns. We also have a “mutual fund success stories” series. See, for example, how mutual funds helped me achieve financial independence. Now, over to the reader.
FY 2025-26 has been a year of contrasts. Income grew, savings discipline remained strong, and we continued building toward the house goal — but the equity markets delivered a sharp reality check. Also, our retirement corpus shrank for the very first time since we started tracking.
More on that below.
Basics – as of March 2026
Emergency Fund
We continue to maintain approximately 4 months of mandatory expenses (in the scenario where both of us stop earning) as an emergency fund, held entirely in savings accounts and fixed deposits. This fund is not touched for any other purpose.
Health Insurance
- 10L base + 50L Super Top-Up (Self & Wife) — taken independently, outside office cover
- 10L base + 15L Super Top-Up (Parents – both sides separately)
All policies are maintained outside employer health insurance, ensuring continuity regardless of job changes.
Term Insurance
- 10 years of current annual income (separate policies for both)
Income Distribution
Below is our monthly income split across different buckets — expressed as a percentage of combined income, including PF – and how it has evolved over the years.
| Bucket | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|
| Education / Home Loan EMI | 13.65% | 11.50% | 0% | 0% | 21.8% |
| Car Loan EMI & Maintenance | 4.00% | 3.30% | 2.84% | 2.3% | 1.8% |
| Other EMIs | 2.50% | 1.10% | 1.25% | 1.0% | 0.8% |
| Family Commitments | 8.50% | 9.00% | 7.70% | 8.5% | 6.5% |
| Personal Monthly Expenses | 21.60% | 18.70% | 17.62% | 16.2% | 13.4 |
| Insurance Premium | 3.28% | 2.80% | 2.39% | 3.8% | 3.3% |
| Investments | 32.00% | 35.20% | 50.18% | 50.75% | 43.4% |
| Travel | 14.50% | 15.50% | 14.93% | 14.0% | 6% |
| Savings: Medical Expenses | 0.00% | 2.90% | 3.00% | 3.6% | 3% |
Key Observations for 2025-26
- Travel allocation dropped sharply from 14% to 6 %. This was intentional — we consciously dialled back discretionary travel as we focus aggressively on compensating for the dip in investment due to the house purchase goal
- Investments dropped by 7% compared to last year. A significant share of income is being channelled into the house downpayment/EMI
- Personal monthly expenses continued their steady decline -largely driven by income growth rather than lifestyle cuts, as our day-to-day life has stayed largely the same.
- Family commitments eased slightly (8.5% → 6.5%) even as we continue supporting both families, including upkeep of the native home at Kolkata.
- Insurance premiums held steady, covering comprehensive medical and term insurance for self, wife, and parents across both families
- Car Loan is supposed to get over in the coming couple of months – which will then be used for investments
- Maintaining a separate medical fund which supports preventive tests, doctor visits and earmarked for any unwanted events
Goals — Status Update
1. Retirement
Our retirement goal remains targeting financial independence, with a corpus target of 40 years of post-retirement expenses. Retirement is nominally 17 years away (mid-50s), but we aim to reach FI earlier if possible.
This is the first year our retirement corpus has declined. Two main reasons
- Deliberate redemptions from the equity portfolio to accelerate the house downpayment fund, and
- The broader Indian equity market correction, which weighed on unredeemed equity values. The equity share of the corpus fell from 65.7% to 45.1% over the year.
In terms of years of retirement expenses covered, the corpus represents approximately 4.8 years — slightly lower than last year’s ~5.5 years — partly because of the reduced corpus and partly because of an upward revision to our retirement expense estimates.
While this temporary dip is planned and explained, it is a useful reminder to stay disciplined on retirement contributions going forward.
2. House Purchase
This remained our most important goal last year. We have now locked in the purchase, and EMIs have started. We had to sell some equity investments and stopped fresh investments for a few months for it – we now have clear visibility going forward. It was a big decision, and having a financial planner (fee-only), proved to be the best decision we made last year
Investments
Emergency Fund
100% in savings accounts and fixed deposits. No change from previous years.
Retirement Portfolio — Asset Allocation
The most notable shift this year is in asset allocation. We moved from 65.7% equity in March 2025 to 45.1% equity in March 2026 — the most significant reallocation since we started investing. This was driven by (a) redemptions of equity mutual funds to fund the house downpayment, and (b) continued PF/VPF contributions growing the debt side organically. Debt now forms 54.9% of the retirement corpus.
We have also initiated a small liquid debt MF position (SBI Liquid) this year as a short-term parking vehicle. We plan to rebalance back toward 60-65% equity post the house purchase.
| Component | % of Corpus | Category |
|---|---|---|
| PF + VPF | 49.5% | Debt |
| PPF | 4.5% | Debt |
| Debt MF (SBI Liquid) | 0.9% | Debt |
| Equity Mutual Funds | 37.5% | Equity |
| Direct Stocks | 7.6% | Equity |
| Total Retirement Corpus | 100% | Debt 54.9% | Equity 45.1% |
Mutual Fund Portfolio
The table below shows the allocation of each fund within the equity MF portfolio (as % of total equity MF current value) along with the overall XIRR from inception.
| Fund | % of Equity MF | XIRR | Investor |
|---|---|---|---|
| Motilal Oswal S&P 500 | 22.1% | 19.00% | Rupali |
| Parag Parikh Flexi Cap | 26.4% | 16.70% | Rupali |
| UTI Nifty Next 50 | 25.8% | 12.97% | Arka |
| ICICI Pru Nifty 50 | 20.9% | 2.00% | Arka |
| IndMoney Vanguard VOO | 4.8% | 11.80% | Arka |
| Total — Equity MF (CAGR) | 100% | 12.93% | Combined |
| Debt MF — SBI Liquid | — | 6.11% | Rupali |
Wife’s International-oriented funds — Motilal Oswal S&P 500 (19.00% XIRR) and Parag Parikh Flexi Cap (16.70% XIRR) — continue to outperform. These benefited from dollar appreciation and relatively resilient US/global equity performance even as Indian markets corrected. Together, they constitute ~48.5% of the equity MF book.
Arka’s India-focused portfolio (UTI Nifty Next 50, ICICI Nifty 50) bore the brunt of the domestic market selloff. The UTI NN50 still holds a healthy 12.97% XIRR given the longer holding period. The ICICI Nifty 50 XIRR of 2% reflects relatively recent SIPs that got hit by the correction — expected to recover over time.
Overall combined equity MF CAGR stands at 12.93% — a satisfying number given the market backdrop.
Direct Equity Portfolio
The table below shows each stock’s weight within the direct equity portfolio, along with absolute return and CAGR. Fresh investments in this had been stopped since last year after discussing with our financial planner. Only dividends are reinvested, and a small opportunity fund was used (which has been set aside for a few years now).
| Stock | Wt. in Portfolio | Abs. Return | CAGR | Direction |
|---|---|---|---|---|
| HUL | 8.8% | -12.10% | -3.62% | ▼ |
| ITC | 8.1% | +17.76% | +4.78% | ▲ |
| Infosys | 11.7% | -12.67% | -3.80% | ▼ |
| Bajaj Finance | 12.4% | +38.56% | +9.77% | ▲ |
| HDFC Bank | 10.7% | +8.37% | +2.32% | ▲ |
| Asian Paints | 8.0% | -21.39% | -6.64% | ▼ |
| Deepak Nitrite | 7.1% | -19.97% | -6.17% | ▼ |
| TCS | 7.4% | -30.94% | -10.04% | ▼ |
| Pidilite | 7.8% | -1.54% | -0.44% | ▼ |
| Fine Organics | 7.8% | -4.63% | -1.35% | ▼ |
| Titan | 10.3% | +23.23% | +6.15% | ▲ |
| Portfolio Total | 100% | -3.14% | — | ▼ |
The long-term mandate for direct equity remains dividend income and capital appreciation. We’re not looking to exit based on short-term performance, as the overall weight of this section remains less than 10% of the entire portfolio
The Retirement Corpus Journey
The table below shows how our retirement portfolio has evolved over the years — in terms of allocation mix and year-on-year growth (or decline). All figures are in percentage terms.
| Period | Debt % | Equity MF % | Stocks % | Total Equity % | YoY Change |
|---|---|---|---|---|---|
| Mar 2021 | 69.3% | 22.9% | 7.8% | 30.7% | — |
| Mar 2022 | 55.5% | 34.2% | 10.3% | 44.5% | +95.5% |
| Mar 2023 | 44.4% | 43.5% | 12.1% | 55.6% | +67.9% |
| Mar 2024 | 34.8% | 53.1% | 12.1% | 65.2% | +79.5% |
| Mar 2025 | 34.3% | 53.4% | 12.3% | 65.7% | +33.3% |
| Mar 2026 | 54.9% | 37.5% | 7.6% | 45.1% | -19.0% |
This is the first year the corpus has moved backwards. The equity market correction added to the decline. The net wealth position hasn’t necessarily deteriorated – assets have moved to a different bucket (if we consider the house) – but the retirement corpus in isolation did shrink by about 19%.
We intend to resume aggressive equity accumulation and rebalance back toward the 60-65% equity range.
Plan for 2026-27
- Resume full retirement SIP levels and begin rebalancing equity allocation back toward 60-65% of the retirement corpus.
- Keep the non-financial goals in focus too — regular exercise, eating right, and enough sleep
- With an increase in income and with any extra payout, pulling back the travel fund to its past level. Travel is one of our primary expense buckets, as both of us like to travel, so we keep a significant amount to fulfil our travel dreams. To compensate for that, we minimise discretionary spending, such as shopping and eating out, throughout the year and treat this travel corpus as our extended emergency bucket. We document our travels on our website and YouTube. Would love it if you have a look.
We want to thank Pattu sir and the AIFW Facebook group once again. The quality of discussion in that community — even for a quiet observer like me — is unmatched. The yearly audit tradition you all have built is something I genuinely look forward to. Here’s to continuing it for many more years.
Reader stories published earlier:
As regular readers may know, we publish a personal financial audit each December – this is the 2024 edition: Portfolio Audit 2024: The Annual Review of My Goal-Based Investments. We asked regular readers to share how they review their investments and track financial goals.
- First audit: How Suhas tracks his MF investments and reviews financial goals.
- Second audit: How Avadhoot Joshi evaluates his investment portfolio.
- Third audit: How a single mom is on track to financial freedom
- Fourth audit: How Gowtham started goal-based investing & took control of his money
- Fifth audit: Why my financial independence & early retirement plans were postponed by four years
- Sixth audit: How Abhisek funded his marriage & is on track to financial freedom.
- Seventh audit: How Rohit’s early struggles defined his investment journey
- Eighth audit: Why my investments are still on track despite job loss and lower income.
- Ninth audit: How a retirement planning calculation scared me to take action
- Tenth audit: I made several investment mistakes, but I have turned my life around.
- Eleventh audit: My net worth doubled in the last financial year, thanks to patient investing!
- Update: How I achieved investing nirvana.
- Twelfth audit: My financial journey: from novice to goal-based investor.
- Thirteenth audit: My journey: from a negative net worth to goal-based investing.
- Fourteenth audit: From Fixed Deposits to Goal-based investing in MFs.
- Fifteenth audit: My 10-year financial journey – mistakes made and lessons learnt.
- Sixteenth audit (part 1): How I achieved financial independence without mutual funds or stocks.
- Sixteenth audit (part 2): Lessons from my financial independence journey and future investment plans.
- Seventeenth audit: How I plan to achieve financial independence and move to my native place
- Eighteenth audit: I used the current bull run to reduce my mutual funds from 14 to 4!
- Nineteenth audit: How a conservative investor created his financial plan
- Twentieth audit: I plan to achieve financial independence by 46; this is my master plan
- Twenty-first audit: I have made many investment mistakes but am on course to financial independence by 45.
- Twenty-second audit: I felt worthless six years ago but have achieved financial stability today
- Twenty-third audit: My financial journey was directionless until age 40: this is how I made up for lost time
- Twenty-fourth audit: Why I increased equity MF investments by 275% and reduced PPF contributions.
- Twenty-fifth audit: How I track financial goals without worrying about returns
- Twenty-sixth audit: I am 24 and started investing 1Y ago, but what am I investing for?
- Twenty-seventh audit: How we plan to achieve a retirement corpus 50 times our annual expenses.
- Twenty-eighth audit: I thought equity investing was a gamble, but now I aim to hold 60% equity for retirement
- Twenty-ninth audit: My journey: From 5 lakhs in debt to building a corpus worth six years in retirement
- Thirtieth audit: My investment journey: From random purchases to a goal-based portfolio
- Thirty-first audit: My investment journey: from product-driven to process-driven
- Thirty-second audit: How a young couple is trying to balance travelling and investing
- Thirty-third audit: My journey: From Rs. 30 bank balance to financial independence
- Thirty-fourth audit: Our journey: From scratch to a net worth of 18 times annual expenses.
- Thirty-fifth audit: From a net worth of Rs. 6000 to auto-pilot goal-based investing
- Thirty-sixth audit: How I retired from corporate bondage at 46, two years ago!
- Thirty-seventh audit: How I learnt to keep it simple and build a net worth 19 times my annual expenses
- Thirty-eighth audit: How Abhineeth plans to achieve financial independence and build a house.
- Thirty-ninth audit: How Sahil plans to achieve financial independence by efficient tracking
- Fortieth audit: My Journey to a Ten Crore Portfolio
- Forty-first audit: Burdened with debt for several years, I am now aggressively investing in equity
- Forty-second audit: From Engineer to Librarian after Financial Independence and Early Retirement (FIRE)
- Forty-third audit: I lost six months’ income in F&O and ditched it for systematic investing
- Forty-fourth audit: My retirement plan to handle the harsh realities of the IT industry
- Forty-fifth audit: My investment journey: mistakes, 10 years of MF investing and recovery
- Forty-sixth audit: My MF portfolio is worth six crores despite multiple mistakes
- Forty-seventh audit: Saving, Investing, and Running Marathons: My 25-year Journey to Financial Independence
- Forty-eighth audit: Never Too Late to Start: How I Became Financially Savvy at 40
- Forty-ninth audit: My Investment Journey to a net worth 29 times my annual expenses
- Fiftieth audit: How I audit my portfolio without tracking returns
- Fifty-first audit: Financial Lessons Learned During and After a PhD
- Fifty-second audit: Investment & Financial journey of a 23 year old
- Fifty-third audit: The system I use to draw income and spend after retirement securely
- Fifty-fourth audit: From Start-Up Employee to Millionaire: A Success Story of Resilience and Smart Investing
- Fifty-fifth audit: 25-Year-Old Software Engineer’s Investment Journey: From Stocks to Mutual Funds and Beyond
- Fifty-sixth audit: Crossing the Million Mark: Our Journey to the First Crore
- Fifty-seventh audit: Navigating Market Volatility: How an IT Professional Transformed His Investment Approach for Retirement
- Fifty-eighth audit: How Sahil achieved a 10X retirement corpus by efficient portfolio tracking
- Fifty-ninth audit: How I achieved financial freedom by 45 without onsite assignments or ESOPs
- Sixtieth audit: Building Wealth on a Government Salary: Lessons Learned
- Sixty-first audit: Minimalism, Index Funds, and Staying Calm: My Investing Journey at 28
- Sixty-second audit: Building Wealth and Breaking Barriers: How Swati Took Control of Her Financial Future
- Sixty-third audit: My financial journey: How I missed the Compounding Bus!
- Sixty-fourth audit: My MF investment journey: From thematic funds to a 3-fund portfolio
- Sixty-fifth audit: From Debt to ₹1 Crore Liquid Net Worth: My Journey of Financial Awareness.
These published audits have had a compounding effect on readers. If you would like to contribute to the DIY community in this manner, send your audits to freefincal AT Gmail. You can also publish them anonymously.