Your Financial Plan



I am 53. I have taken VRS from a bank. I received ₹40 lakh as terminal benefits. I wish to invest it in FD, mutual funds and stocks. . Should I go for SIP or lumpsum in mutual funds. My wife, 51, works in a government school. My elder son is working while the younger son is doing his graduation. My wife is also eligible for pension.

M Kameswara Rao

The purpose and time horizon should be the prime criteria for selection of asset class. Since your wife will be working for the next seven years, meeting monthly expenses will not be a concern. She can also avail pension. With her pension and yours, you can comfortably meet your monthly expenses. So, all your investments are typically for long term and the beneficiaries are likely to be your children. I suggest planned asset allocation. Since you have lumpsum, no point investing through SIP. To reduce volatility, invest in a staggered manner.

Marriage: Use your monthly surplus to meet this goal. Invest ₹13,500 a month for the next 48 months to reach the target of ₹8 lakh. It should earn 11 per cent return.

For your younger son, to accumulate ₹12 lakh in the next seven years, invest ₹9,200 a month, it should earn 12 per cent return.

Medical fund: Since you have health issues, build a medical fund. Invest monthly a sum of ₹15,000. If it earns 10 per cent return, in 2024 it will be ₹18.1 lakh.

You can also invest monthly ₹10,000 to build a vocation fund. At 12 per cent return this will be ₹13 lakh when your wife retires. You can add her retirement benefits to it.

The balance surplus of ₹5,000 can be used to meet the insurance premium. When your wife retires, discontinue the life insurance.

The writer is a SEBI-registered investment advisor and founder, myassetsconsolidation.com Send your queries to blinefp@gmail.com

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