Early start to ease journey
Kolkata-based
Pandas should start planning for the more important goals at this stage of
life.
Abinash
Panda, a bank employee, is only 26, while his home maker wife, Ankita, is 23,
and the couple is expecting a child soon. Panda's parents are also financially
dependent on him. He gets a monthly salary of `50,000, of which `43,104 flows
out as household expenses, insurance premium (`5,104), contribution to parents
(`5,000) and investment (`3,000). This leaves him with `6,896 as investible
surplus.
This
amount can be increased to `8,583 by revamping the insurance portfolio.
Financial Planner Pankaaj Maalde suggests he surrender three of his four
traditional plans and buy a term plan worth `1.25 crore for 35 years, which
will cost around `12,000 a year. He should also purchase a family floater plan
of `10 lakh after the birth of his child, besides critical illness and accident
disability plans of `25 lakh each for himself.This will reduce his premium
amount by `1,687, and after adding his existing investment of `3,000, the
surplus will increase to `11,583.
Panda's
portfolio has `80,000 in equity funds, `6.25 lakh in fixed deposit, `3.58 lakh
in EPF and `10,000 as cash. His goals include saving for emergencies, future
child's education and wedding, retirement and buying a car. Maalde suggests he
build the contingency corpus of `5.3 lakh by assigning his fixed deposit. The
corpus includes `3 lakh as a medical buffer for his parents, while the
remaining amount is equal to six months of his expenses.
For the
child's education, he can amass `40 lakh by starting SIPs of `5,000 in equity
funds. Finally, for retirement, he will need `6.63 crore in 33 years, for which
he can assign his EPF and equity fund corpus.He will also need to start an SIP
of `6,000 in equity funds. Due to lack of surplus at the moment, Panda cannot
save for the child's wedding and purchase of car in four years. He should wait
for a rise in salary before planning for these goals.
