Stagger plan to meet goals
Since the
Bengaluru couple wants to focus on buying a house, all other goals will have to
wait.
Suhas
Mahadevabhatt, 28, works in the IT sector, in Bengaluru, and is married to
Sheetal, 27, also an IT professional. They bring a combined income of `72,000,
and are planning a kid in a year or so. Their goals include saving for
contingencies, a house, their future child's education and wedding, retirement,
car and vacation.
The
couple's portfolio includes `4.3 lakh in equity, `1.2 lakh in debt and `15,000
in cash. After taking care of household expenses (`32,167) and insurance
premium (`3,583), they are left with a surplus of `36,250. Financial adviser
Pankaaj Maalde suggests that they start by building the emergency fund worth
three months of expenses, which equals `1.17 lakh. They can allocate their cash
and debt funds for this and, for the shortfall, should save the surplus for two
months. This amount should be invested in a short-term debt fund. The other
goals start after this period.
Since
buying a house worth `73.5 lakh in five years is top priority, the couple has
agreed to forgo the other goals for now.They can start investing `32,000 in the
suggested funds to build the down payment of `26 lakh. For the balance `48
lakh, they will have to take a 20-year home loan and the EMI will come to
`43,750 at 9.25%.This can be met from the surplus of `32,000 and `13,000 saved
on rent. For retirement, they can allocate their stocks, equity funds and EPF
corpus, and start an SIP of `6,500 in the suggested funds only after a rise in
income. They will also need to wait to invest for their child's goals till their
income rises and will have to let go of the goals of buying a car and vacation
for now.
As for
insurance (see Insurance portfolio), both Suhas and Sheetal need to buy term
plans worth `1 crore and `75 lakh, respectively. They should also pick a family
floater plan of `10 lakh, besides critical illness and accident disability
plans of `25 lakh each, for both. The extra premium of `3,334 can be met from
the surplus. They can also retain their four traditional plans and review the
Ulip after five years.
