Financial Planning: Gaurav Mashruwala
I will be retiring next year and my wife in another four years. Our monthly income is Rs 1.75 lakh. Post my retirement, it would be Rs 75,000. Our monthly expenses are Rs 35,000, plus Rs 20,000 for the education of my nephew. We also part-pay the EMIs (Rs 18,000) for our son’s education loan. The rest of our money is diverted towards savings. Rs 12,000 goes towards public provident fund (total balance is Rs 28 lakh in both PPF accounts). We also contribute towards equity investments; Rs 25,000 via systematic investment plans (total equity investments = Rs 14 lakh). The rest of the earnings are used to top off a recurring fixed deposit (Rs 7.5 lakh). I will be getting employee provident fund of Rs 25 lakh on retirement. I would need about Rs 10-15 lakh for my son’s marriage. Apart from this, we would need money for our monthly expenses after retirement. We also plan to travel over the next five -seven years and expect an annual expense of Rs 2-3 lakh for it. Are my goals achievable? Do I need to skew my investments to meet these?
First, please obtain maximum possible health insurance for yourself and wife. While funding your son’s marriage, liquidate your equity portfolio. From monthly income and investment portfolio of Rs 64.50 lakh (after setting aside funds for son’s marriage), you will be able to generate enough income to fund your vacations.
During retirement, you will have three fund requirements: Liquidity, regular income and the growth of corpus to beat inflation. Set aside funds for six months’ mandatory expenses for contingencies. Keep Rs 30,000 in cash at home and the rest in savings bank account linked to fixed deposit. For regular income, invest in senior citizen savings schemes, monthly income plans of mutual funds and post-office monthly income schemes. Once funds are set aside for contingencies and regular income, deploy balance sum in equity and gold. You may invest in these through mutual funds.
The writer is a certified financial planner. Views expressed are his own. Send your queries to yourmoney@bsmail.in