Financial Planning: Gaurav Mashruwala

I will be retiring next year and my wife in four years. Our monthly income is Rs 1.75 lakh and we own two flats, in Mumbai and Ratnagiri. After retirement, our income would be Rs 75,000. Monthly expenses are Rs 35,000, plus Rs 20,000 towards the education of my nephew (to be paid for another two years) and Rs 18,000 for son's education loan. The rest is saved: Rs 12,000 towards PPF, Rs 25,000 in mutual funds via SIP and the remaining in a recurring deposit. I will receive EPF of almost Rs 25 lakh. I would need about Rs 10-15 lakh for my son's marriage. We also plan to travel a lot over the next five -seven years and expect to spend Rs 2-3 lakh. Do I need to skew investments to meet my goals? How should I invest the EPF amount?
First, obtain the maximum possible health insurance for your wife and yourself, assuming you already have a life insurance plan. Link the equity portfolio to the goal of funding your son's marriage and liquidate it when required.

After retirement, from the income of Rs 75,000 every month and a portfolio of Rs 64.50 lakh (after setting aside funds for son's marriage), you will be able to generate enough income to fund vacations for the next couple of years.

When retired, you will have three distinct requirements: Liquidity, regular income and growth of corpus to beat inflation. Keep aside funds equivalent to about six months’ mandatory expenses for contingencies (liquidity). Make sure you have about Rs 30,000 in cash at home and the rest in savings bank accounts linked to fixed deposits. For regular income, invest in (i) the Post Office's Senior Citizen Saving Scheme, returning nine per cent a year, (ii) monthly income plans of mutual fund companies and (iii) Post Office's Monthly Income Scheme.

Once funds are set aside for contingencies and regular income, deploy balance amount in equity and gold. You may invest in these through mutual fund schemes.

I took a home loan of Rs 44 lakh last year at nine per cent. As the interest rates have increased, I am now repaying at 11 per cent. My bank has waived the pre-payment charges. Should I shift to a bank charging a lower rate? What are the factors I must keep in mind while shifting?
If you are getting a better deal from another bank, then you may want to consider shifting the loan. However, ask the existing lender and find if they have any offers which may be better than the new lender’s.

While shifting the loan, check all factors that you considered while taking the loan initially, like the rate of interest to be paid, service, other charges and so on.

The writer is a certified financial planner. Views expressed are his own. 
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