Your Financial Plan

I am 44, working in a school, and my son is in second year engineering in Chennai. I live in Tier-2 city. Since I am single parent, I am thinking of buying a house for me, either in Madurai or Chennai with all my savings. At retirement ,I am eligible for pension. Is it a good idea to spend all the money to buy a house.

Saritha

Buying house is not a bad idea, but the timing is important; whether it is the right time to buy. The answer is no. Being a single parent, it is advisable to live with your son or at least, if possible, live in the same city.

Once your son completes his education, take a call based on his employment to decide in which city you need to buy a house.

Given his educational background, chances of getting employment in Chennai are higher than in Madurai.

Being a single parent, you may want to get him married at 26 or 27. So, after marriage, if both are going to work, then at that point in time, you can decide where (in which location) to buy the house.

Assume after six years you buy 900 sq ft, 2BHK for ₹54 lakh. Your fixed deposits will be ₹36 lakh at 6.25 per cent interest.

If you invest as per the table given, you will have ₹21 lakh.

So, without any loan, you can buy the property. If you are keen to buy a bigger property,you still have eight years of service and it should not be a problem.

So, defer buying the property for six years. Earmark the retirement benefits as an emergency fund.

The writer is Investment advisor and founder, myassetsconsolidation.com. Send your queries to blinefp@gmail.com

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