Adequate funds for all goals
Kolkata-based Das
needs to align his investments with goals to be able to reach them with ease.
Sambit Das is a
50-year-old engineer, who stays with his wife, a homemaker, in Kolkata. He has
no children but makes financial contribution to his parents. He stays in his
own house worth 60 lakh and has also bought land worth 40 lakh. However, he has
no loans or any other liabilities. After considering household expenses of 56,250,
a contribution of 30,000 to his parents, insurance premium of 4,450 and
investment of 55,000, he is left with a surplus of 54,300 a month. His
portfolio of 1.4 crore includes real estate, equity worth 13.1 lakh in the form
of mutual funds and stocks, debt of 27 lakh in the form of PPF and EPF, and
cash of 5.5 lakh. His goals include building an emergency corpus as well as a
medical buffer, taking an annual foreign vacation and saving for retirement.
Financial Planner Pankaaj Maalde
suggests that Das begin by building a contingency corpus of 5.5 lakh, which is
equal to six months’ expenses. He can do so by allocating his cash and
investing the amount in a liquid fund. Maalde also suggests that he build a
medical buffer of 5 lakh for his parents and can do so by allocating 20,000
from his surplus till the corpus is amassed.
Since Das doesn’t have any children,
he doesn’t have any kid-related goals. His other goals include building an
adequate retirement corpus and enough funds to take a 10 lakh foreign vacation
every year after retiring. This amounts to a corpus of 3.75 crore. He can
assign his stocks, mutual funds, PPF and EPF corpuses, and real estate to these
goals. Besides, he should start an SIP of 75,000 in a diversified equity fund
and 5,000 in a gold bond scheme. He should also continue to put in 5,000 in the
PPF till retirement. Both his goals will be met but he will be able to take a
vacation every alternate year.
For life insurance, Das has three
traditional plans of 27.5 lakh, for which he is paying a monthly premium of 2,867.
Maalde suggests he continue with these and recommends a term plan of 50 lakh.
This will cost him 1,300 a month in premium. As for health insurance, Das has a
family floater plan of 17 lakh, for which he is paying 1,583 a month. Maalde
suggests he continue with the plan, but advises him to buy a 25 lakh accident
disability plan for himself, which will cost him only 333 a month in premium.
This will take care of all his insurance needs.
