FUNDS REQUIRED TO MEET GOALS 1.02 CR `

PREM KUMAR, 30 years PROFESSION: Private employee DEPENDENTS: One

WHILE PLANNING IS CRITICAL TO OUR FINANCIAL WELL- BEING, IT HAS BECOME INEVITABLE IN THE UNCERTAIN TIMES WE NOW LIVE IN. HERE, DR RAVINDRAN ANALYSES YOUR FINANCIALS AND LAYS OUT A ROADMAP FOR ACHIEVING FINANCIAL GOALS.

PLAN OF ACTION

Net disposable surplus of 1.2 lakh can be invested in the following proportion for the next 31 years.

Invest 7,500 a month in an SIP of balanced ( equity and debt) over the next 31 years. This will help in creating a corpus of 27.9 lakhs at cost (` 119.89 lakh in value terms if growth is aimed at eight per cent a year). This will help him in building the retirement corpus. This fund can be placed in a debt fund to earn monthly dividends at retirement.

A sum of 2,500 be parked every month in a PPF. Over 15 years this shall translate into a future value of around 9 lakh.

Life insurance, unit linked, may be undertaken so as to gain on an upside, with a 10- 18 years horizon, soon after child birth, to undertake childs’ higher education. A sum of about 25,000 per year over 18 years shall yield a future value of 10.11 lakh with an eight per cent of yearly growth.

PPF and life insurance will partly fund the childs’ higher education programme. The growth in equity/ balanced fund may be used to fund the balance requirement for education and marriage as both events are scheduled prior to his retirement.

Health matters are taken care off by employer. But it would be advisable to buy another cover.

Term assurance of 50 lakh has to be taken to begin with which shall cost about 6,000 per year, extending upto about 65 years for him.