All major goals within
reach
The Kolkata-based couple needs to increase the
equity exposure to ensure achievement of all milestones.
Saikat and Soumi Chakraborty stay with their two-year-old son and
Saikat's parents in their own house, in Kolkata. Both are working and bring in
a combined salary of 1.15 lakh. Their house is worth 30 lakh, for which they
taken a loan of 18 lakh and are paying an EMI of 20,000. They also have another
property worth 15 lakh. Their portfolio is worth 64 lakh, with the debt portion
of 13 lakh comprising EPF, PPF, fixed deposits and debt funds. The equity
portion includes balanced funds worth 5 lakh.
After considering household expenses of ₹44,833, insurance premium of 15,846
loan EMI and investments, they are left with a surplus of 13,943. Financial
Planner Pankaaj Maalde suggests the couple start by setting up a contingency
corpus of 4.7 lakh. This can be built by allocating their cash of 1 lakh, debt
funds of 2 lakh and fixed deposit of 1.5 lakh. This should be invested in an
ultra short-term fund.
Next, the couple wants to buy a bigger house worth 60 lakh. They can do
so by selling their existing flats and making a down payment of 27 lakh after
deducting the loan amount. For the remaining amount, they will have to take a
loan for 25 years, and at 8.3%, the EMI will come to 26,130, which can be
sourced from the surplus.
For their child's higher education expenses in 16 years, they estimate a
need of 88.5 lakh and this can be amassed by starting an SIP of 15,500 in an
equity fund. No other resource is allocated for this goal. Finally, for
retirement, the couple will need 6.8 crore in 26 years. They can allocate the
EPF and PPF corpuses, as well as the balanced fund corpus. They will also have
to start an SIP of 19,500 in a diversified equity fund to achieve the goal.
As for insurance, the couple has one term plan worth 1 crore and two
traditional plans of 20 lakh. Maalde suggests that both, Saikat and Soumi, pick
up 50 lakh term plans each. These will cost them 1,166 a month in premium. They
are also advised to surrender both their traditional plans. For health, they
have medical plans worth 27 lakh from their employers. However, Maalde suggests
they buy a 10 lakh family floater plan, which will cost them 1,500 a month in
premium. Saikat also has an accident disability plan worth 50 lakh. Maalde
advises he retain this and buy a critical illness plan worth 25 lakh, which
will come for a premium of 750 a month.
