Financial Planning

I am 35 years old and work in an MNC. My wife works in the IT sector. I have a five-year-old daughter, and we are expecting our second child. My wife may quit her job after that. I live with my parents. I have bought a flat from my savings. I will receive a one-time settlement from my father. How can I deploy my funds to meet my goals?

Sajjan

Your wife quitting the job could have a financial impact. But thanks to the one-time settlement, you could meet most of your financial goals.

For your daughter’s education, set aside 4.3 lakh. If the portfolio earns 10 per cent return, it should grow to about 15 lakh. For your second child’s education, set aside 3.6 lakh. This should grow to more than 20 lakh at 10 per cent annual return.

For your daughter’s wedding, invest 10 lakh. If it earns 10 per cent return, it will grow to about 70 lakh. For retirement, assume you presently need a monthly sum of 30,000. At age 55, you will need a monthly sum of 1.16 lakh if the inflation is 7 per cent. To have this income at retirement, you need a corpus of about 4 crore, and it should earn at least one per cent over and above inflation, to sustain till you turn 85.

If you earmark 40 lakh and it earns 12 per cent annual return (given the longer time horizon, you can take somewhat higher risk for higher return), it will account for 3.86 crore. Your EPF accumulation will be helpful in meeting the shortfall. After meeting all the goals, you will have 11 lakh; use this partially to close the home loan. Make all your endowments policies paid-up to avoid future premium payments.

 

 

 

 

 

The writer is an investment advisor and founder of Myassetsconsolidation.com.

This article was posted in Nanayam vikatan last week 28/10/2018

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