Low surplus to hinder goals
The Kolkata-based
couple will have to put off some of their goals till a further rise in income.
Sanjoy Das, 35, is in private service
and brings home a monthly salary of 39,000. He stays with his homemaker wife in
a rented house in Kolkata. His portfolio includes debt in the form of NPS worth
5.79 lakh and PPF worth 1.73 lakh, equity in the form of mutual funds worth 3.3
lakh, and cash of 1.5 lakh. His goals include building an emergency corpus,
buying a house and saving for retirement.
Financial Planner Pankaaj Maalde
suggests Das start by creating an emergency corpus of 1.59 lakh, which is worth
six months of expenses. He can do so by allocating a portion of his cash (50,000)
and insurance surrender value of 1 lakh. This amount should be invested in an
ultra short-term fund.
Next, Das wants to buy a house worth 80
lakh in seven years. For this, he wants to make a down payment of 20 lakh by
allocating his mutual fund corpus, which is likely to yield 5 lakh in the
specified period. Besides this, he will have to start an SIP of 12,000 in a
diversified equity fund. For the remaining amount of 60 lakh, he will have to
take a home loan, which will result in an EMI of 52,070 at 8.5%interest. For
this, he will have to assign the existing SIP of 12,000 and rent of 7,000,
while the remaining will have to come from a rise in income. If his income does
not rise sufficiently in seven years, he will have to review his decision and
put off the goal till the time he can pay the EMI.
Finally, for retirement in 25 years,
Das wants to amass 3.2 crore. For this, he will have to assign his PPF and NPS
corpuses, which are likely to yield 1.07 crore in the given period. Besides, he
will have to start an SIP of 12,000 in an equity fund and continue investing in
the PPF and NPS. Since he doesn’t have adequate surplus, he will have to put
off the goal till a sufficient rise in income.
For life insurance, Das has two
traditional plans providing a cover of 5 lakh, and for which he is paying a
monthly premium of 1,885. Maalde suggests that he surrender both the plans and
instead buy a term plan of 50 lakh, which will come for a monthly premium of 583.
As for health insurance, Das has bought an independent 2 lakh family floater
plan. Maalde suggests he raise the cover size to 5 lakh which will come for a
premium of 1,667. He should also buy an accident disability plan of 25 lakh at
a monthly premium of 334.
