Your Financial Plan

My father is 55, self-employed, will retire in stages, starting at 60. My mother, 45, is a home-maker. They have medical insurance for ₹5 lakh each and wish to be financially independent. I plan to go for a home loan while my father will invest a lumpsum towards it. Is it good to use gold monetisation scheme for jewels?


If your father wishes to be financially independent, he should refrain from home investment. If he wishes to contribute for the home then he has to partially depend on you all his life. After 60, if he gradually retires over the next five years, he will be able to contribute little towards family expenses.

The current monthly expenses appear on the higher side, possibly due to your education expenses. Your parents may require minimum ₹30,000 including rent. The present monthly expenses of ₹30,000 will be ₹59,000 after 10 years, inflated at 7 per cent. At retirement, to receive such a monthly income, ₹1.28 crore retirement corpus is needed and it should earn 1 per cent over and above inflation to sustain them till they turn 85. If the financial assets earn post-tax return of 7 per cent at 65 it will account for ₹63.6 lakh.

To meet the shortfall he should invest ₹29,700 a month and it should earn post-tax return of 11 per cent. Consider investing it in a balanced fund. Alternatively, invest ₹20,000 a month and increase it by 10 per cent every year to meet the target.

Regarding gold monetisation, it will not be attractive since you will lose out on wastage. Post-retirement, as per your mother’s wish, you could convert a portion of the jewels into financial assets.

The writer is a registered investment advisor and founder, myassets Send your queries to

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