House takes priority
The other goals can be achieved in a staggered manner.
Shiv and Smita Baruah stay in a rented house in Noida and bring in a combined salary of `1.38 lakh. Their goals include building an emergency corpus, buying a house and saving for retirement. Financial Planner Pankaaj Maalde suggests that since they don’t have any children, they can stagger their child-related goals and start investing for these after a few years.
The couple can achieve the goals as per the table given below. For the house worth `50 lakh that they want to buy in 18 months by making a down payment of `10 lakh, they will have to start an SIP of `53,000 in an ultra short-term fund. For the remaining amount, they will
HOW TO INVEST FOR GOALS
have to take a loan for 20 years. At an interest rate of 8.5%, the EMI will come to around `34,700 and this can be easily sourced from the surplus.
As for life insurance, Shiv has a term plan and a traditional plan worth `51.5 lakh. Maalde suggests he retain the two and buy another term plan of `1 crore for himself and `50 lakh for Swati, at `1,417 a month. The couple has a family floater plan of `5 lakh, but should buy a `10 lakh plan at `1,666 a month. Shiv should also buy a `25 lakh critical illness and a `25 lakh accident disability plan for himself, and a `25 lakh accident disability plan for Smita at `1,000 a month.