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I am a Central Government employee and I will retire in 2025. After retirement I will receive a pension which would be 50 per cent of my last drawn salary. My wife, aged 43 is a teacher and will not get pension after retirement. Her income is fully invested in postal schemes. My daughter is pursuing her graduation and my son is in class nine. I hope to meet his education expenses from my salary. We have health cover and own a house. Suggest a suitable plan to save ₹10 lakh for my daughter’s marriage and for my retirement.
Sushil
Your equity investment accounts for 8 per cent of your overall portfolio when your investment horizon is more than 10 years, indicating your conservative approach. Your wife’s investments would earn less than the inflation rate. You must change your asset allocation pattern.
Daughter’s marriage: In five years, if you wish to accumulate ₹10 lakh, invest ₹12,900 every month that will earn 10 per cent return. Maintain an asset allocation pattern of 60:40 in debt and equity. Since your wife’s income is lower than the basic income-tax slab, if you invest in an RD that delivers 8.5 per cent and park ₹13,500 every month, you can reach the goal.
If there is an increase in expenses, utilise the current savings in mutual funds.
Retirement: With your pension and GPF (general provident fund) proceeds, you are comfortably placed. If your current balance and future investments in GPF earn 8.7 per cent annually, then, at retirement you will have ₹33.2 lakh. If you deposit the proceeds and earn post-tax return of 8 per cent, you can comfortably manage expenses till you turn 80 . If you live beyond 80, the postal life insurance proceeds will act as a cushion.
Son’s education: Due to tax benefits, taking a loan is a good idea. Avoid raising loans against your postal life insurance policy. Buy a term cover of ₹50 lakh.
The writer is a financial planner and founder myassetsconsolidation.com
Send your queries to fp@thehindu.co.in
The writer is a financial planner and founder myassetsconsolidation.com Send your queries to >fp@thehindu.co.in
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