Mutual Funds

Your Financial Plan

Suresh Parthasarathy | Updated on January 24, 2018 Published on June 14, 2015


I am 50 and work in a private company. My wife is a home-maker. Our daughter and son are in class nine and UKG. I have a family health floater for ₹1 lakh and endowment for ₹6 lakh and invest ₹1 lakh each in VPF and PPF.

AG Desai

Though you have pursued a conservative approach by investing predominantly in fixed income instruments, you can achieve all your goals comfortably.

However, you need to buy adequate health and life cover to protect your goals.

Earmark fixed deposits of ₹5 lakh for your daughter’s education; this will be ₹6.55 lakh, assuming 7 per cent post-tax return. To meet the shortfall, invest ₹12,500 monthly so as to earn 12 per cent annual return. Also, set aside your current SIP for this goal.

Since you have adequate savings for tax saving under section 80 C, remove tax saver funds from your mutual fund portfolio and invest them in pension scheme to avail tax benefit of ₹50,000.

For your son’s education and daughter’s marriage you will need ₹67.7 lakh, assuming 7 per cent inflation. Set aside your retirement benefits for this. After meeting the goal, you will have a surplus of ₹7.3 lakh, which can be used to meet emergency needs. Should your marriage expenses overshoot your budget, utilise the gold to meet the shortfall. If the current balance and future contribution in EPF and PPF continue to grow at 8.7 per cent, at retirement, you will have a corpus of ₹1.75 crore. If you save ₹40,000 in recurring deposit till retirement, your corpus will be ₹69.2 lakh, assuming 7 per cent post tax return. With this you can comfortably live till 85.

The current health cover needs to be increased to ₹5 lakh and along with that buy a super-top policy for ₹5 lakh. Buy term insurance for ₹50 lakh.

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Published on June 14, 2015
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