Your Financial Plan

I am 38. I work in a media company and my wife works for a private firm. I have two children studying in classes 4 and 5. I live with my parents in their home on the outskirts of Chennai. They are financially dependent on me. How much do I need to save? Should I switch careers?

Palani Baskhar

For the middle-income group, it is always a challenge to meet aspirations. The surplus will shrink as children start to grow, making it difficult to meet investing goals. To meet all your goals, you must invest ₹37,700 a month against savings and surplus of ₹17,000. Since your salary is growing at 5 per cent, increasing your savings every year will be a challenge. As a result, the incremental savings on EPF will also be low. This will push up the shortfall in retirement corpus.

Changing jobs after a certain age will also become difficult. So, I suggest you switch careers earlier to meet the shortfall. Since your parents are financially dependent, you need to build an emergency fund. The current health insurance of ₹1 lakh each is low. As they grow old, any medical support will further reduce your surplus. So, it is better to take risk now to earn better.

The writer is a SEBI registered investment advisor and founder,

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