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47-Year-Old Father Seeks Advice on SIP for Daughter's Medical Studies

Ramalingam Kalirajan |6275 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 22, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Vivek on Jul 13, 2024Hindi

Dear Sir, I seek your advice on starting a Mutual Fund SIP for my daughter's higher studies. She is currently in Class 7 and aspires to be a doctor. I am 47 years old, with a monthly net income of ?3 lakhs. Currently, I invest ?1.25 lakhs per month in SIPs across large-cap, mid-cap, small-cap, and aggressive hybrid funds. I own a loan-free home in Navi Mumbai and am in the process of buying a ?90 lakh flat, for which I have already paid ?52 lakhs. I plan to work for another four years. My total savings, including PF, PPF, SSY, land, and mutual funds, amount to ?2.7 crores. My current household expenses are ?75,000-?85,000 per month. Could you please recommend a suitable Mutual Fund SIP for my daughter's education? Additionally, I would appreciate guidance on how much money I should have to ensure a comfortable retirement.

Ans: Current Financial Situation
You are 47 years old.

Your monthly net income is Rs 3 lakhs.

You invest Rs 1.25 lakhs per month in SIPs across various mutual funds.

You own a loan-free home in Navi Mumbai.

You are in the process of buying a Rs 90 lakh flat and have paid Rs 52 lakhs.

You plan to work for another four years.

Your total savings, including PF, PPF, SSY, land, and mutual funds, amount to Rs 2.7 crores.

Your household expenses are Rs 75,000 to Rs 85,000 per month.

Planning for Daughter's Higher Education
Investment Horizon
Your daughter is currently in Class 7.

She aspires to be a doctor.

You have an investment horizon of 6-7 years until she starts her medical studies.

Suitable Mutual Fund SIPs
Consider equity-oriented mutual funds for long-term growth.

Focus on diversified equity funds for balanced risk and returns.

Look for funds with a good track record and consistent performance.

Monthly SIP Amount
Determine an affordable SIP amount based on your current investments and savings.

Aiming for Rs 25,000 to Rs 30,000 per month would be prudent.

This ensures adequate funds for her higher education.

Ensuring a Comfortable Retirement
Retirement Corpus
Estimate your retirement needs based on current expenses.

Assume an inflation rate to maintain purchasing power.

Aim for a retirement corpus that supports your lifestyle for 20-25 years post-retirement.

Existing Savings and Investments
You have Rs 2.7 crores in savings and investments.

Continue your current SIPs and other investments.

Ensure your portfolio is diversified across equity, debt, and fixed income.

Additional Retirement Savings
Consider increasing your SIP amount if possible.

Maximize contributions to PF, PPF, and other fixed income instruments.

These provide safety and stable returns.

Reducing Expenses and Debt
You are buying a new flat.

Ensure you manage the remaining payment without straining your finances.

Avoid taking on unnecessary debt.

Focus on reducing household expenses where possible.

Professional Guidance
Consult a Certified Financial Planner.

They will help assess your financial goals and create a detailed retirement plan.

Strategies for Education and Retirement
Education Fund
Start a dedicated SIP for your daughter's education.

Choose equity-oriented funds with a strong performance history.

Ensure regular reviews and adjustments based on market conditions.

Retirement Fund
Maintain a balanced portfolio for retirement savings.

Include a mix of equity, debt, and fixed income.

Consider systematic withdrawal plans post-retirement for regular income.

Regular Monitoring
Review your investment portfolio regularly.

Make adjustments based on market performance and personal goals.

Seek professional advice for tailored guidance.

Final Insights
You have a stable financial situation with a good income.

Starting a SIP for your daughter's education is a wise decision.

Focus on equity-oriented funds for long-term growth.

Ensure your retirement corpus is sufficient for a comfortable life.

Diversify your investments and avoid unnecessary debt.

Regularly review and adjust your portfolio.

Consult a Certified Financial Planner for expert advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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