On track to meet goals
Given the high
savings and investments, Krishnan will have no problem in reaching his
milestones.
Mumbai-based Murali Krishnan works in
the IT industry and lives with his wife, Megha, 42, and two kids aged 14 and 8.
He brings in a salary of 1.75 lakh and also gets a rental income of 35,000. He
has three houses and a plot of land, and has taken a home loan of 46 lakh.
After household expenses, insurance premium, contribution to parents and a home
loan EMI of 52,100, he is left with a surplus of 74,258. His goals include
saving for emergencies, kids’ education and weddings, and retirement.
Financial Planner Pankaaj Maalde
suggests Krishnan start by building an emergency corpus of 12.4 lakh, which
includes a medical buffer of 5 lakh for his parents. He can allocate his fixed
deposit and cash holding for this goal. For his older son’s education, Krishnan
needs 32.7 lakh in four years. For this, he should start an SIP of 60,000 in an
equity income fund. For his younger son’s education, he needs 64 lakh in 10
years. To meet this, he should allocate his stocks and equity funds and will
also need to start an SIP of 20,000 in a diversified equity scheme. For his
children’s weddings in 11 and 17 years, Krishnan needs 73.5 lakh and 1 crore,
respectively. He should rely on his plot of land to meet these goals and will
not need to invest any more. For retirement, Krishnan will need 3.5 crore and
can assign his EPF corpus as well as two houses for the goal. He doesn’t need
to invest any further.
For life insurance, Krishnan has one
traditional plan and two Ulips. Maalde suggests he retain the former and review
the latter after the lock-in period of five years. Though these plans offer a
low cover, the needbased theory suggests that Krishnan doesn’t need to buy any
more life insurance as he has sufficient number of assets. Since his wife is
not earning, she too doesn’t need any life insurance. For health insurance, his
employer provides a cover of 6 lakh. Maalde
advises that he buy a 20 lakh family floater plan independently and this will
cost him 3,333 a month in premium.
