Your Financial Plan



I am 45. I am working in a Gulf country. My father 80, my only dependant, lives on his own in India. I wish to buy a house in 2017 and plan to settle in India by 2026. Should I buy a flat or construct a house? Please suggest suitable investment strategies for me. After retirement I may need ₹75,000 per month.

Nagaraj

Living in a community is better than living alone after retirement, from a safety point of view. People will be around to help at times of crisis. So, I suggest you buy a flat. If you are open to retirement homes, you could explore that as well. But retirement homes are generally built in the outskirts of the city. So commuting into the city will be difficult.

If you buy a flat for ₹50 lakh, avail home loan for ₹25 lakh. At 9.4 per cent interest rate for five years, your EMI will be ₹52,400. If you let out your property, the entire interest serviced towards home loan can be deducted from your Indian income. So, this will bring down your borrowing cost.

Retirement corpus: If you need ₹75,000 per month at retirement, you should have a corpus of ₹2.32 crore. It should earn 1 per cent over and above inflation to support your monthly needs till you turn 85.

Invest ₹1,10,000 a month which should earn 10.4 per cent return. The asset allocation should be 50:40:10 in equity mutual fund, debt and gold, respectively. At least four years prior to retirement, buy a health cover that covers pre-existing ailments too.

You will still be left with some surplus. Build an emergency fund for your father and for your India visit. Since you are single, write a will for easy transfer of assets.

The writer is a SEBI-registered investment advisor and founder, myassetsconsolidation.com

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