Stagger goals for easy ride
Mumbai-based Gupta has started planning early,
but doesn’t have adequate surplus to invest for all goals.
Pooja Gupta, 28, is an IT consultant, and stays with her parents in
Mumbai. Of her monthly income of 60,000, she spends 32,500 on household
expenses, 3,583 as insurance premium, and 16,000 as investment, leaving her
with a surplus of 7,917. Her portfolio comprises 2 lakh in debt, 2.5 lakh in
equity and 10,000 as cash. Her goals include saving for emergencies, her own
wedding, buying a house, future child’s education and wedding, and her
retirement.
Financial Planner Pankaaj Maalde suggests she start by building her
contingency corpus of 1.06 lakh. For this, she can allocate her cash, fixed
deposit and debt fund corpus. This amount should be invested in an ultra
short-term fund. Next, Gupta wants to save 5 lakh for her own wedding in 18
months. However, Maalde suggests she bring down this amount to 3.5 lakh. To
achieve the goal, she will have to start an SIP of 18,000 in an ultra
short-term fund for the specified time.
While Gupta wants to buy a house worth 40 lakh after a year, she doesn’t
have the surplus to invest for it and will have to put off the planning till
after her wedding. She also wants to plan for her future child’s education and
wedding. She has estimated a need of 1.5 crore and 3 crore, respectively, for
these goals in about 20 and 27 years. For the former, she will need to start an
SIP of 15,500 in equity funds, and for the latter, 17,000 in equity funds and
gold bond scheme. However, both these goals will have to be put on hold due to
lack of investible surplus and can be considered after marriage.
As for retirement in 32 years, she will need about of 5.15 crore. For
this, she will have to allocate her PPF and EPF corpuses, stocks and equity
fund corpus. Besides these, she will have to start an SIP of 6 ,000 in an
equity fund to be able to reach the goal.
As for Gupta’s insurance portfolio, she has one traditional plan worth 20
lakh and Maalde advises she surrender this because of low returns that will not
beat inflation. Instead, she should buy a 1 crore term plan at a cost of 1,000
a month. For health insurance, she has a 1 lakh cover, which is too low and
Maalde suggests she purchase a 10 lakh plan at the next renewal, at a premium
of 1,000 a month. She should also pick a 25 lakh critical illness plan and 25
lakh accident disability plan at 1,000 a month.
