I am 48. I work in a private sector company and my wife works as a lecturer. My son, 20, is completing his engineering and my daughter is studying plus one. My concern is with my ₹35-lakh loan. Is it good to send my son for overseas education? My EPF balance is ₹18 lakh and I contribute ₹4,350. I have made provisions for my daughter’s marriage.

Raja

Since the global economy is on shaky ground, sending your children abroad for studies puts the family finance at risk. But since you have plots, you can take a risk, though it will impact your early retirement.

Daughter’s education: Earmark your insurance maturity proceeds of ₹7.85 lakh. To meet the third and fourth-year fees, invest ₹15,400. It should earn10 per cent return to meet the target.

Retirement: Your current expense of ₹20,000 at 55 will be ₹32,100 if inflated at 7 per cent . So, a retirement fund of ₹1 crore is needed and it should earn 1 per cent return over and above the prevailing inflation to sustain you till you reach 85.

Your EPF will account for ₹48.15 lakh if it earns 8.75 per cent till your retirement. The plot with present value of ₹30 lakh, if its value grows at 7 per cent, will account for ₹48 lakh in 2023. Your gratuity and other retirement benefits will bridge the gap. The EPF pension will be a cushion.

House construction : Sell the plot worth ₹25 lakh and build a house in your hometown. The capital gain arising out of sale will get adjusted against the construction cost. Four years prior to retirement, buy a health cover for ₹5 lakh for any pre-existing ailments too. This will protect your retirement corpus.

The writer is a SEBI registered investment advisor and founder,

myassetsconsolidation.com

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