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Sanjeev Govila | Answer |Ask -Follow

Financial Planner - Answered on Dec 25, 2023

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more

Asked by Anonymous - Dec 19, 2023Hindi

Hi i am 46 years old , married with no kids . Have my own house in gurgaon and no loan of any sort to be paid . Me and my wife( 45 yrs) are both working and jointly earning 60 lacs pa after tax . Also 9 lacs pa we are getting annuity for life from LIC from jeevan shanti , which will increase to 15 lacs (for entire life )after 2028 . Further I have invested in hdfc life sanchay plus that will generate another 3.2 lacs pa from 2028 for 25 years (with return of 40 lacs in 25 th year ). Another 5 lacs per anum we will be getting from 2031for next 25 years (with return of 50 lacs in 25th year ) from another policy of sanchay plus . Also 7.5 lacs pa for 12 years after 2032 from one more policy of hdfc sanchay plus . Apart from above I have invested in nps tier 2 schemeE , current portfolio value is 35 lacs and my wife invested in nps tier 1 ( 75 % in scheme E ) with current investment of 7 lacs . Further my plan is to invest in tier 2 @ 36 lacs per year for 5 years/ 7 years . Also we both are having ppf accounts and total corpus is 70 lacs and we are planning to continue investing 1.5 lacs in each account for next 15 years . Apart from above my wife is contributing 25 k per month in vpf , her portfolio cured value is aprox 7 lacs . Currently we are having approximately 40 lacs in bank FD We both have term insurance of 1.5 cr and 1 cr respectively Also have health insurance of 40 lacs Our current monthly expenses are 1.5 lacs per month . Pls suggest if we are on right track to retire in next 7/ 8 years . Pls suggest/ comment on our current and planned future investments.

Ans: Based on the information you've provided, you and your wife appear to be on a very strong track for retirement.

• Retirement corpus estimate: Considering your planned investments and existing assets, assuming an 8% annual return (market is not guaranteed), your accumulated corpus at retirement (in 7-8 years) will be more than sufficient to cater your future needs.
• Passive income estimate: Combined guaranteed future annuities from HDFC Sanchay Plus and LIC Jeevan Shanti & PPF withdrawals, you can expect at least 25 lakhs p/a passive income, which cover all your monthly expenses.
• Expenses vs. income: This suggests your passive income can potentially cover your current expenses with some buffer.

Investment Recommendations:

• Review NPS contribution: Assess if contributing the maximum 36 lakhs pa in Tier 2 for 5-7 years is optimal, it's worth exploring other options, potentially offering higher returns,
• Balance equity exposure: While annuities and PPFs offer stability, consider exploring equity mutual funds or balanced funds for potential long-term growth, especially with your comfortable current income.
• Review VPF: Your wife's VPF contribution seems good; ensure the chosen scheme aligns with your risk tolerance and retirement goals.
• Contingency fund: Maintain an emergency fund (3-6 months of expenses) for unforeseen circumstances.

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