Need to step up investment
Pune-based Kunjirs will have to raise their equity
exposure and also stagger some of the goals for now.
Rohan and Pragati Kunjir stay with
their two kids, aged eight and six, in their own house, in Pune. They get a
combined monthly salary of 1.47 lakh and have bought another house as an
investment. This will increase to 1.54 lakh soon after they start getting rent
from one of their houses. They have also taken two home loans of 70 lakh and a
personal loan of 35,000. Their portfolio includes real estate of 95 lakh, cash
worth 2 lakh, equity worth 90,000 in the form of mutual funds, and debt worth 10
lakh in the form of EPF and fixed deposit. Their goals include building an
emergency corpus, saving for their children’s education and weddings, and their
own retirement.
Financial Planner Pankaaj Maalde
suggests Kunjirs repay their costly personal loan with a part of cash holding.
They should also reschedule one of their home loans to extend the term so that
the EMI reduces by about 10,000. These steps will help raise their investible
surplus by 15,000, which can be used to meet goals. The couple can start by
building their emergency corpus of 3.6 lakh, worth three months’ expenses, by
allocating their cash, fixed deposit and insurance surrender value. This should
be invested in an ultra-short duration debt fund.
Next, Kunjirs want to save 29.5 lakh
and 34 lakh for their children’s education in 10 and 12 years, respectively.
For these goals, the couple will have to start SIPs of 13,000 and 11,000 in
diversified equity funds, respectively. For the weddings of their kids in 17
and 19 years, the couple will need 47 lakh and 54 lakh, respectively. However,
they don’t have enough surplus and should start investing after a rise in
income. For retirement in 26 years, the couple will need 5.5 crore. For this,
they can assign one of their houses, EPF and NPS corpuses, and equity funds.
Besides, they will have to start an SIP of 5,000 in a diversified equity fund.
For life insurance, Kunjirs have 80
lakh of insurance from their employers, besides 55 lakh of a single premium
term plan. They also have a traditional plan of 5 lakh, which should be
surrendered. The couple should buy two term plans of 50 lakh each for 1,500 a
month. For health insurance, Kunjirs have 6.5 lakh insurance from their
employers. They should buy a 10 lakh family floater plan for 1,833 a month, and
25 lakh accident disability plans for both at 667 a month.
