Your Financial Plan







I am 65. How do I provide financial assistance to my wife, daughter, 34, and six-year old grandson? My daughter soon starts a job that pays ₹25,000 a month. I have diabetes and no health insurance.

Raju

There is no fixed formula for asset allocation. In your case since your monthly needs are protected by fixed deposits, take exposure to equity. However, considering your life expectancy, restrict equity exposure to 30 per cent of the assets. Such a portfolio will help you earn post-tax return of 8 per cent.

Grandson’s education: Invest ₹27 lakh in mutual fund from sale proceeds and earmark existing mutual fund for this goal. In all, restrict exposure to the equity mutual fund to ₹40 lakh. For monthly expenses, withdraw monthly 0.8 per cent of the assets through systematic withdrawal plan. With this you will also meet your expenses and be able to build a corpus over and above ₹40 lakh. At a period when the fund delivers abnormal return, realign the allocation.

Daughter’s marriage: Once your daughter starts earning, save all her salary to meet marriage expenses. I presume it will be a simple marriage at a cost of ₹8-10 lakh, since she has adequate jewels. Earmark ₹3 lakh receivable for this purpose.

Retirement: Although your current monthly expense is ₹60,000, it may moderate once your daughter marries. Assuming status quo, you need a corpus of ₹1.03 crore. It should earn 1 per cent more than inflation to sustain you till you reach 80. In the initial years, when you rebalance your equity mutual fund portfolio, set aside some funds for medical emergency.

The writer is a financial planner and founder, myassetsconsolidation.com

Send your queries to blinefp@gmail.com



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

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