Enough time to reach goals
Early start to
planning by Hyderabad-based Joshis will help them build sufficient corpus for
all goals.
Himanshu and Neha Joshi are IT
professionals staying in Hyderabad with their fouryear-old child. They get a
combined monthly salary of 1.9 lakh and, after expenses and investment, are
left with a surplus of 10,108. They have already bought a house worth 72 lakh,
for which they are paying an EMI of 45,000. They are also servicing a car loan
of 3.2 lakh with an EMI of 12,000. Their portfolio includes 14.4 lakh of debt
in the form of EPF, PPF, fixed deposits and a post office scheme, while equity
is in the form of mutual fund investment. Their goals include saving for
emergencies, taking a vacation, saving for the child’s education and wedding,
and retirement.
Financial Planner Pankaaj Maalde
suggests they start by building the emergency corpus of 4.3 lakh, worth three
months’ expenses, with their cash, fixed deposit and post office scheme corpus.
This can be increased to six months’ expenses and should be invested in an
ultra short-term fund. Next, the couple wants to save 11 lakh for a vacation in
seven years, for which they will need to start an SIP of 10,000 in a balanced
fund.
For their child’s education in 14
years, they have estimated a need of 39 lakh and this can be partially funded
with the mutual fund corpus. For the remaining amount, they need to start an
SIP of 8,000 in a diversified equity fund. For the child’s wedding in 21 years,
they need 62 lakh. They can again assign a part of the mutual fund corpus and
start an SIP of 5,000 in a diversified equity fund and 1,000 in the gold bond scheme.
For retirement in 25 years, they will need 6.4 crore, and can assign their EPF,
PPF and the remaining mutual fund corpus. For the remaining amount, they will
have to start an SIP of 18,000 in an equity fund.
As for life insurance, Himanshu has a
term plan of 1 crore and, Neha, 50 lakh. Maalde suggests Neha buy another 50
lakh term plan at a monthly premium of 375. As for health cover, the couple has
a 6 lakh plan from Himanshu’s employer and a 5 lakh family floater plan of
their own. Maalde suggests they pick a top-up plan of 15 lakh with a 5 lakh
deductible at 817 a month. They also have a 10 lakh cancer plan, but Maalde
suggests that both of them take a 25 lakh critical illness plan because it
covers more illnesses, as well as accident disability plans of 25 lakh each at
a monthly premium of 2,000.
