Non-stoichiometric ferrite magnetic nanoparticles Mg0.5+xLi1-2xFe2O4 (x=0, 0.15, 0.35) were prepared using low-cost sol-gel method and annealed at temperature 700 degrees C. Thermal analysis measurement confirms that there is a decrease in weight with an increase in temperature which becomes thermally stable till 600 degrees C. The XRD study confirms that prepared nanoparticles are a cubic spinel structure having Fd3m space group. The crystallite size lies in the range of 26.41-31 nm. Lattice parameter was found to increase with decreasing molar ratio of Li ion. The FTIR spectroscopy confirms the spinel nature of ferrite nanomaterial having characteristics absorption peaks at 588 and 435 cm(-1.) HRTEM and SEM image confirms the cubic spinel structure and porosity in the material. The indirect energy band gap was evaluated for all samples using tauc plot and found to be 2.25, 1.89 and 2.03 eV respectively for x=0, 0.15 and 0.35. The energy band gap was found function of crystallite size. Strong luminescence was observed in the visible range of 580-610 nm. The non-molar ratio of Li=0, 0.15 and 0.35 mol leads to a systematic increase in all the magnetic parameters. The magnetization increases from 15.53 to 33.75 emu/g, retentivity from 2.66 to 7.11 emu/g and coercivity increases 116.56-161.37 Gauss, respectively. Prepared nanomaterial possesses pure phase porous crystal with luminescent property in the visible range, energy band gap in the range of 2.03-2.25 eV and uniform increase in the magnetic parameter. Hence, materials may be potential candidate for magneto-optical device, humidity sensor, hydroelectric cell applications and some other realted fields.