Your Financial Plan

I am 49 and work in the private sector. My wife, 45, is a home-maker. My daughter is getting married in September. I have saved enough for her. My son is joining engineering. My investments are only in deposits and gold. I am retiring in nine years. How do I provide for my retirement and my son’s post-graduation?


Your daughter is getting married in a few months and your son’s post-graduation is four years away. For your son’s education, invest ₹36,000 a month in the next four years. A 10.8 per cent return will earn ₹21.5 lakh. Inflation is assumed to be 7 per cent. For the balance, go for an education loan.

Your investment allocation should be 60:30:10 in mutual fund, debt and gold, respectively. Invest ₹21,600, ₹10,800 and ₹3,600, respectively.

Invest in two schemes each in large-cap, multicap and balanced funds, which should earn 14 per cent return annualised. If gold and debt give you post-tax return of 6 per cent, you can earn 10.8 per cent on the portfolio. After closing your loans by 2020, save ₹30,000 per month for five years to close the education loan at your retirement.

Retirement: If the monthly household expenses for you and your spouse are ₹25,000 now, at retirement you will need ₹46,000. A corpus of ₹1.62 crore is needed for this which should earn 1 per cent return over and above inflation. If your current EPF balance and future contribution earns 8.75 per cent, at retirement it will account for ₹1.45 crore. Meet the shortfall by saving ₹21,000 from 2020 for the next 60 months and it should earn 10.8 per cent return.

The writer is a financial planner and founder,

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