They also have a personal loan of Rs 3.05 lakh for which they are paying an EMI of Rs 36,006. Their goals include building an emergency corpus, saving for their kids’ education and weddings, and their own retirement.
Financial Planner Pankaaj Maalde suggests they start by building an emergency corpus of Rs 3.06 lakh, equal to six months’ expenses, by allocating cash and a portion of fixed deposit. This should be invested in a liquid fund. Maalde also suggests that they repay their expensive personal loan with the remaining fixed deposit amount.
Portfolio
Cash flow
Next, they want to save Rs 43 lakh for their older child’s education in eight years. For this, they can allocate Ulips and start an SIP of Rs 5,000 in diversified equity funds. For higher education in 11 years, they will need Rs 52.5 lakh and can allocate equity mutual funds for the same.
They will also have to start an SIP of Rs 12,000 in diversified equity funds. For the second child’s education, they will need Rs 56 lakh and Rs 69 lakh in 12 and 15 years, respectively. For these goals, they will have to start SIPs of 17,500 and 14,000 in diversified equity funds. For the kids’ weddings in 14 and 21 years, they will need Rs 82.7 lakh and Rs 1.08 crore, and will need to start SIPs of Rs 16,500 and Rs 12,500 in equity funds. Due to lack of surplus, however, they will have to invest for these after a rise in their income.
How to invest for goals
For retirement in 22 years, the couple will need Rs 3.4 crore and can allocate their PPF and EPF corpus, and one property. They should also continue to contribute Rs 5,000 a month to the NPS to reach the goal.
For life insurance, they have two Ulips worth Rs 15 lakh and two-term plans of Rs 1.05 crore. They should continue with these and buy a Rs 30 lakh term plan for Kajal for Rs 333 a month. For health, they have Rs 4 lakh insurance from Samir’s employer, a Rs 5 lakh family floater plan and a Rs 10 lakh top-up plan. Maalde suggests they continue with these. They should, however, pick a Rs 25 lakh accident disability plan for Samir, which will cost him Rs 333 in monthly premium.
Insurance portfolio
Financial plan by Pankaaj Maalde Certified Financial Planner
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