Your Financial Plan



I am 40, working in a PSU. My wife is a homemaker. My elder son is in class 6 and the younger one in class 1. I am expecting salary hikes from 2017. I wish to enrol my son into IIT, for which I wish to spend for coaching. Do suggest investment options to reach the goals with my new surplus.

Mahesh



A four-year integrated IIT coaching programme costs ₹8 lakh. The total expense, including the school fees, will not exceed ₹12 lakh for 4 years from class nine.

Education: Assume that ₹5 lakh will be the IIT coaching fee for the first two years for your elder son. To reach the target in 30 months, invest ₹15,000 a month in mutual monthly income plan which would earn a return of 8.5 per centto reach the target.

To meet the ₹7 lakh expense for the next two years, invest ₹11,400 a month for the next 48 months which should earn a 12 per cent return. For his college admission earmark the insurance proceeds of ₹5.3 lakh.

Younger son’s education: Invest ₹7,400 a month to meet his college expense of ₹20 lakh. Earmark the current mutual fund SIP and increase it by ₹4,900.

Retirement: The present monthly expenses of ₹25,000 will be ₹97,000 after 20 years at a 7 per cent average inflation. So you will need to have a retirement corpus of ₹2.55 crore. The EPF contribution will account for ₹1.11 crore. Invest ₹14,500 a month to meet the shortfall of ₹1.44 crore.

The present current balance in EPF can be utilised for any escalation in second son’s education cost or to meet your post-retirement vocation plans. Follow an asset allocation of 60:30:10, respectively, in equity, debt and gold for plans regarding the younger son and retirement goals.

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

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