Your Financial Plan



I am 41. I work in a public sector bank. My wife, 38, is a home-maker. My elder daughter is in class 8 and younger one in class 2. I am eligible for pension of ₹1.6 lakh on retirement. I am open to investing 50 per cent of my savings in mutual funds. Please suggest suitable options.

Dheeraj

Pension at retirement is a great financial strength. With your current and future investments you can reach all goals.

Education: For your elder daughter’s graduation, earmark ₹11 lakh from the fixed deposit maturity which, if redeployed at 8 per cent, will account for ₹12.8 lakh. For younger daughter, allocate ₹10 lakh from deposits and if it earns 11 per cent (same assumed for other goals), it will account for ₹20 lakh in 2026. If you invest 50 per cent in equity mutual fund and 50 per cent in debt investments such as short-term fund or accrual products from mutual fund, you can earn post tax return of 7 per cent.

To meet elder daughter’s post graduation fee, allocate ₹6 lakh from FD, it will account for ₹11.2 lakh. For younger daughter, allocate ₹3 lakh, it will account for ₹10 lakh. To make up the shortfall in both cases, utilise existing mutual fund investments. For elder daughter’s marriage, invest ₹14,000 a month and for younger daughter, ₹9,000. Since your surplus is ₹20,000, allocate the current SIP for this goal. Although you can meet retirement needs, for other expenses earmark EPF and PPF accumulation. If it earns 8.5 per cent at retirement it will be ₹1 crore.

The writer is a SEBI Registered Investment advisor and Founder, myassetsconsolidation.com

Send your queries to blinefp@gmail.com

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