I am a 52 year, Disabled Ex-Serviceman. My earning is 1 lakh /month. My Savings: PPF 30 Lakh(14 years running). FD 40 lakhs. MF one time investment 2.5 lakh (total value present). Medical insurance for 7 lakhs (26000.00 /yearly premium). No loan. Own ancestral property. Liquid cash in SB AC- 30 LKS. ONLY SON 16 years. Please guide me for my future planning.
Ans: Current Financial Situation
Age: 52 years
Status: Disabled Ex-Serviceman
Monthly Income: Rs. 1 lakh
Savings and Investments:
PPF: Rs. 30 lakhs (14 years running)
Fixed Deposit (FD): Rs. 40 lakhs
Mutual Funds (one-time investment): Rs. 2.5 lakhs (current value)
Medical Insurance: Rs. 7 lakhs (Rs. 26,000/year premium)
Liquid Cash in Savings Account: Rs. 30 lakhs
Other Assets: Own ancestral property
Dependents: Only son, 16 years old
Retirement and Future Planning
Assess Current Investments
PPF: Continue for another 1 year to complete the 15-year term.
Fixed Deposit: Provides safety but low returns.
Mutual Funds: Limited exposure currently.
Goals and Financial Planning
Goal 1: Retirement Corpus
Monthly Expenses: Estimate Rs. 50,000 per month post-retirement.
Inflation: Consider inflation at 7%.
Goal 2: Son's Higher Education
Duration: Plan for expenses in the next 2 years.
Goal 3: Medical and Health Security
Medical Insurance: Adequate but can consider increasing coverage.
Recommendations
PPF and Fixed Deposits
PPF: Continue till maturity. Re-invest maturity amount in diversified mutual funds.
Fixed Deposits: Gradually shift a portion to mutual funds for better returns.
Mutual Funds
Diversified Mutual Funds: Increase allocation for higher returns. Opt for SIPs to manage market volatility.
Lumpsum Investment: Use Rs. 30 lakhs liquid cash to start a combination of SIPs and STPs.
Insurance and Health Coverage
Medical Insurance: Increase coverage to at least Rs. 10 lakhs.
Term Insurance: Ensure you have adequate life cover to secure your son's future.
Education Planning
SIP for Education: Start an SIP dedicated to your son's higher education expenses.
Goal-Based Funds: Choose funds that align with the education timeline.
Investment Strategy
Regular Contributions
SIP: Allocate Rs. 20,000 per month from your income.
Diversification: Invest in a mix of equity and debt funds.
Lumpsum Strategy
Liquid Cash Utilisation: Invest Rs. 15 lakhs in equity mutual funds via STP over 12 months.
Balance FD: Keep Rs. 25 lakhs in FD for immediate liquidity and safety.
Long-Term Investments
PPF and SSY for Son: Invest in PPF for your son and consider SSY if eligible.
Financial Security and Contingency Planning
Emergency Fund
Maintain: Rs. 10 lakhs as an emergency fund in a liquid account.
Contingency Planning
Review Insurances: Regularly review your insurance needs.
Will and Estate Planning: Ensure your will is updated and includes all assets.
Final Insights
Balancing safety with growth is key. Increase your equity exposure gradually for better returns. Ensure your son's education and your retirement are well-funded. Regular reviews and adjustments will help you stay on track.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
