On track to reach
goals
Delhi-based
Pandits have started early and will not face difficulty in achieving their
milestones.
Gauri and
Mukul Pandit bring in a combined salary of `1.7 lakh.
Since
they stay in their parental house in Delhi, they don't have to pay a rent.
After considering household expenses, loan EMI, insurance premium and
investment, they are left with a surplus of `40,234.
Financial
planner Pankaaj Maalde suggests that they start by repaying their car loan from
their fixed deposit, which will save `8,700 as EMI. Next, they should build an
emergency fund by allocating their cash holding and fixed deposit, and
investing it in an ultra short-term debt fund.
They also
want to buy a house worth `1.1 crore in a year, but Maalde suggests they push
it back by five years. For the down payment of `40 lakh , they can assign their
fixed deposit and start an SIP of `40,000 in the suggested funds. For the
remaining 70 lakh, they will have to take a loan with an EMI of `56,000, which
can be sourced from the surplus and rise in income.
The
couple also wants to save for their future child's education (`1 crore) and
wedding (`1.7 crore) in 19 and 26 years, respectively.For these goals, they
will have to start SIPS of `12,000 and `10,000 in equity funds. For retirement,
they will need `12 crore. Maalde has allocated their PPF, EPF, NPS, stocks and
equity funds for this goal. Besides, they will need to start an SIP of `26,500
in equity funds. They must also invest `1,000 a year in the PPF, `1 lakh a year
in the NPS and contribute to the EPF till 60 years of age.
For
insurance, they have a term plan of `1 crore for each and three traditional
plans.They can continue with the latter, but should buy additional term plans
of `85 lakh for Mukul and `50 lakh for Gauri. They should also enhance their
health plan from `3 lakh to `10 lakh and take critical illness and accident
disability plans as well (see table).
