Financial plan for NRI young couple.

I am 32 and I have recently moved to the US. I am currently trying to find a job here. My husband, 35, is employed here with an IT company.

My son is two years old. I wish to stay in the US for the next 10 years.

My mother stays at an old age home in Chennai and I support her.

Is it a good idea to sell my 2BHK home and buy an old age home in Chennai for my mother?

Harini

Since your mother is living alone, it may be a good idea to buy a retirement home. But after 10 years, if you return to India and wish to keep your mother with you, you need to let out the property. Instead of selling your 2BHK, look for a rental accommodation in a retirement home from a reputed builder.

You can then let out your flat and meet the expense for the retirement home with the rental income.

Education: To reach your target of ?1 crore, you ought to save monthly a sum of ?17,400 for the next 192 months and your portfolio should earn 12 per cent. Since your spouse is an NRI, he is not allowed to invest in small savings schemes. This will narrow your options.

Since you are already overweight on real estate in your portfolio, invest in fixed deposits and mutual fund at 60:40 ratio to meet the goal (follow the same allocation for retirement goal).

Due to recent regulatory changes, only some mutual fund companies allow US tax-payers to invest in their schemes.

These include L&T, Pramerica and Sundaram. Invest in large-cap schemes of these fund houses and take marginal exposure to mid- and small-cap schemes.

Retirement: If you plan to retire at 55, you will need ?1.16 lakh a month, considering your current monthly expense of ?30,000.

To meet these needs at retirement, you need to have a corpus of ?3.9 crore and it should earn 1 per cent above inflation till your husband turns 85.

If you do not invest in your EPF account for three years, it will become inactive and will not earn any interest. So, withdraw the money and reinvest at 8 per cent. It will grow to ?1.16 crore. To meet the shortfall, you need to invest ?27,600 till the goal is achieved.

The writer is a financial planner and founder myassetsconsolidation.com. Send your queries to blinefp@gmail.com