Your financial plan



I am 33 and work in the private sector. My wife is a home maker. We have a one-year-old daughter. My parents are dependent on me. My extra income goes towards closing the home loan by next year. I have term insurance for ₹1 crore. How do I reach my goals?

Nilesh Rathod

You can easily reach your goals since you have started planning 15 years ahead of the target. Your current annual living expenses of ₹2.4 lakh will be ₹13 lakh when you are 58, if inflated at 7 per cent.

To meet the monthly expenses at retirement you need to have a corpus of ₹3 crore and it should be able to earn 1 per cent above inflation. If we assume that your salary increases by 10 per cent every year, the monthly EPF contribution of ₹4,500 and the employer’s contribution will also grow by a similar amount. These contributions will help you reach a corpus of ₹2.7 crore, provided the EPF continues to declare an interest of 8.75 per cent for its investments.

So, the shortfall will be ₹30 lakh. To reach the target you need to invest a sum of ₹1,500 per month to fund your retirement kitty till you turn 85.

Education: To meet your daughter’s education expense, you need to invest a sum of ₹2,270 and it should earn a return of 12 per cent. For her marriage, your target is too conservative. Invest a sum of ₹1,800 for your targeted corpus. But if possible set aside ₹3,600 instead.

To meet goals you need to save about ₹7,500 which is well within your present savings of ₹8,000. Build an emergency fund of ₹5 lakh for parents. In mutual funds, allocate 50 per cent to large-cap funds.





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