Hi I am 38 years old Central banker and my wife is 35 years old financial professional with combined salary of Rs 2.80 lakhs per month ( post deducting all monthly EMI’s).Our combined Investment per month is as under-
-Mutual fund SIP- 1.75 lakhs ( includes retirement planning and educational planning for both the kids)
-PPF 10k each for both of us
-Sukanya Samruddhi Yojana
-10k per month for girl child
-VPF from wife’s ac- 12k
-NPS from my salary 35k
-Further, Life insurance Term plan of Rs 1.5 cr and 2.25 cr taken for me and my wife respectively.
-1 lakh per year goes towards HDFC Samchay plan for period of 12 years and expected 2lakh per year for 14 th year to 26 years.
$as on date portfolio of ours is as under:-
-direct equity- around Rs. 57lakhs
-Gold max 10lakh
-Mutual fund corpus- 52 lakhs
-2 residential flats and investment in 3 residential open plots.
- 40 lakh corpus available for investing lumps in mutual fund for additional retirement planning. Funds made available by selling a Bunglow property.
-monthly rental income is around 29 k.
Kids aged 6 and 2 years old.
Desire to retire at the age of 55 years and wife would like to retire at the age of 45 years.
-Current monthly expenses is around 1 lakh per month and considering inflation 7%, post retirement per month requirement would be 4 lakhs.
Please review and suggest improvement in investment strategy.
Thank you very much
Ans: Current Financial Snapshot
Combined Salary: Rs. 2.80 lakhs per month (post deducting EMIs)
Mutual Fund SIPs: Rs. 1.75 lakhs per month
PPF Contributions: Rs. 10k each per month
Sukanya Samruddhi Yojana: Rs. 10k per month
VPF from Wife's Account: Rs. 12k per month
NPS Contribution: Rs. 35k per month
Life Insurance Term Plans: Rs. 1.5 cr for you and Rs. 2.25 cr for your wife
HDFC Samchay Plan: Rs. 1 lakh per year for 12 years, expected Rs. 2 lakhs per year from 14th to 26th year
Portfolio Overview
Direct Equity: Rs. 57 lakhs
Gold: Rs. 10 lakhs
Mutual Fund Corpus: Rs. 52 lakhs
Real Estate: 2 residential flats and investment in 3 residential open plots
Lump Sum for Retirement Planning: Rs. 40 lakhs
Monthly Rental Income: Rs. 29k
Financial Goals
Retirement: You at 55 years, wife at 45 years
Current Monthly Expenses: Rs. 1 lakh
Post-Retirement Monthly Requirement: Rs. 4 lakhs (considering 7% inflation)
Children's Education and Future Planning: Ongoing investments in PPF and Sukanya Samruddhi Yojana
Analysis and Recommendations
Investment Strategy Review
Diversification: Your portfolio is well-diversified with investments in equities, mutual funds, gold, and real estate. This diversification helps in risk management.
Mutual Fund Investments: Continue with SIPs for long-term growth. Focus on actively managed funds rather than index funds for better potential returns.
Direct Equity: Rs. 57 lakhs in direct equity is significant. Ensure it's diversified across sectors to minimize risk.
Gold: Rs. 10 lakhs in gold adds stability to your portfolio. Consider holding it as a long-term investment.
Lump Sum Investment
Additional Retirement Planning: Invest the Rs. 40 lakhs lump sum in a mix of debt and equity mutual funds. This helps in balancing risk and ensuring steady growth.
Debt Management
Home and Car Loans: Ensure EMIs are manageable within your current income. Focus on pre-paying high-interest loans if possible.
Children's Future Planning
Education Planning: Continue investments in Sukanya Samruddhi Yojana and PPF. These provide stable returns and tax benefits.
Retirement Planning
NPS and VPF: Your contributions to NPS and VPF are excellent for retirement planning. They offer tax benefits and steady returns.
Projected Expenses: With a post-retirement monthly requirement of Rs. 4 lakhs, ensure your corpus is sufficient to generate this income.
Life Insurance
Term Plans: Your term plans are adequate. Ensure they are reviewed periodically to match your needs.
Emergency Fund
Liquidity: Maintain an emergency fund of at least 6-12 months of expenses in liquid assets like savings accounts or liquid mutual funds.
Review and Rebalance
Periodic Review: Review your portfolio every 6-12 months. Rebalance if needed to align with your financial goals and risk tolerance.
Final Insights
Your current investment strategy is robust and well-diversified. By continuing your disciplined approach and making periodic adjustments, you can achieve your financial goals, including early retirement and securing your children's future.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
