I am Amarendra Prasad Sahoo working in a private company and my detail portfolio is give below. My age is = 29 years My wife’s age = 26 years My daughter’s age = 9 months Monthly PF contribution = 4,000 Monthly Net income excluding PF contribution = 55,000 Monthly Expenses = 20,000 Investment in Bank RD = 10,000 per month (8.5 % interest) Investment in mutual fund SIP = 10,000 per month; details are Birla Sun life Frontline Equity Fund = 5,000 per month Franklin India Smaller companies Fund = 5,000 per month HDFC click to protect term insurance of 50 Lacs; premium = 5,516 per annum LIC Jeevan Anand = 24,906 per annum investing since Jan 2009 ICICI ULIP (Life stage assure) = 10,000 per annum investing since Jan 2009 PPF contribution = 30,000 per annum investing since Jan 2009 SBI Blue chip – SIP Rs 4000 for 25 yrs RD A/c closed and Acc.bal.is 100000 LIC Jeevan Anand S.A. 5,00,000 20 yrs ICICI ULIP – S.A. 50000 10 yrs Ret. Age 58 yrs Life expectancy 80 yrs My goals are - For my child’s education need 25 Lacs (present value) after 15 years. For my child’s marriage need 50 Lacs (present value) after 20 years. For retirement need 3 crores (present value) after 30 years. Need suggestion to invest in NPS for 50,000 per annum ================================== All your goals are long term goals with a time frame of more than 10 yrs. Accordingly we advise you to start investing systematically in Equity mutual funds by way of monthly SIP’s. Also considering your income and expenses including all investments and premiums for existing policies you are able to generate a surplus of Rs 15,000 per month. Education goal of your daughter Assuming inflation rate @8% p.a., Rs. 25 Lakhs after 15 year for your daughter’s education is equivalent to Rs. 79 lakhs in today’s terms. To accumulate this corpus of Rs. 79 lakhs, you should start fresh monthly investment of Rs. 15,000/- in Equity mutual Fund. Assuming return of 12.60% p.a. this investment will give you desired corpus. You should utilise the monthly surplus of Rs 15,000 towards the education goal of your daughter Marriage goal of your daughter Assuming inflation rate @8% p.a., Rs. 50 Lakhs after 20 year for your daughter’s marriage is equivalent to Rs.2.33 crores in today’s terms. To accumulate this corpus of Rs. 2.33 crores, you should start fresh monthly investment of Rs. 21,500/- in Equity mutual Fund However after allocating the existing SIPs of in Birla Sunlife, Franklin India & SBI Blue chip totalling to Rs 14,000 you will be required to invest Rs 7,500 in a monthly SIP for 20 years in equity mutual fund which will help you achieve the marriage goal of your daughter. Retirement Goal Assuming inflation rate @8% p.a., Rs.3 Lakhs yearly expenses after 29 years is equivalent to Rs.28 lacs in today’s terms.Assuming a spending phase of 22 years this yearly expenses will require a corpus of Rs 6 crores. To accumulate this corpus of Rs. 6 crores after allocating your PPF and PF savings towards your retirement goal you should start fresh monthly investment of Rs. 10,000 in Equity mutual Fund. Tax planning As a part of the tax planning exercise you should also invest in ELSS to the extent required. NPS is good option for the retirement benefit with low cost. After age 60 you have to compulsory invest 40% of pension fund to buy annuity (pension plan) from one of life insurance Company approved by PFRDA. You can exit from pension fund before age 60, but in that case you to compulsory invest 80% of pension fund to buy annuity (pension plan) and 20% can be withdrawn in lump sum. Since you are short on your goals , we would not recommend NPS because of compulsory 50% debt and compulsory annuity. Recommended ELSS : ICICI Pru Tax Plan, Birla Sunlife Tax Plan,Franklin India Taxshield fund. Recommended Equity MF: Franklin India Blue Chip Fund, ICICI Pru Focused BlueChip Fund, IDFC Premier Equity fund.
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