Main goals to be met easily
The
Hyderabad-based couple can retire early as planned if they continue to invest
in line with goals.
Manoj
Srinivas, a software professional, stays in Hyderabad with his wife and
three-year old child. He is 32, stays in his own house and already has an
impressive portfolio worth `75.5 lakh.This is made smaller due to a `17 lakh
home loan, for which he pays an EMI of `20,000.He has a monthly income of
`75,000 and after expenses and investment of `19,500 (in mutual funds, PPF,
small saving schemes), he is left with a surplus of `334.His goals include
saving for contingencies, child's education and wedding, and retirement at 55
years.
Financial
Planner Pankaaj Maalde suggests he increase his surplus so that he can invest
`26,000 for all his current goals.Srinivas can do this by shifting to another
lender and slashing his home loan EMI to `17,000, as well as revamping his
insurance portfolio. He has an offline term plan, a traditional plan and two
Ulips, which result in a low cover of `21 lakh and a high premium. He is
advised to surrender all these and buy an online term plan of `1 crore at a
cost of `1,000 a month. He also has a health cover of `8 lakh for his family
from his employer and has bought a `5 lakh cover for his father. Maalde
suggests he buy an independent `10 lakh family floater plan, as well as
critical illness and accident disability plans. This will cut his premium by
`7,874 a month.
For
emergencies, he can allocate his cash and save the surplus for six months.After
this period, he can start saving for other goals by investing in suggested
equity funds. For the child's education and wedding, he should start SIPs worth
`12,000 and `9,000 in equity funds and gold bond. For retirement at 55, he
should allocate his PPF, EPF, plot of land, mutual fund corpus, and insurance
value. Besides this, he will need to start an SIP of `5,000 in an equity fund for
the given term.
