Strategic Financial Planning for Ramdas Patil’s Family Goals

Key Takeaways:

1. Building an emergency corpus of Rs.3 lakh is recommended, equivalent to six months of household expenses.

2. Patil can allocate his liquid fund and fixed deposit for the emergency corpus and invest the amount in a money market fund.

3. Saving for his children’s education involves estimated needs of Rs.31.8 lakh and Rs.35.8 lakh in eight and 10 years, respectively.

4. Patil can link existing SIPs worth Rs.69,000 to his children’s education goals and start additional SIPs in equity funds.

5. For early retirement in 13 years, Patil can allocate Rs.74 lakh from his equity fund corpus, which will grow to the required amount in the specified time frame.

6. Patil has a term plan of Rs.1 crore and a family floater cover of Rs.7.5 lakh provided by his employer. Guha suggests he also buy an independent family floater plan worth at least Rs.25 lakh.

Based on the information provided, Ramdas Patil has several financial goals, including building an emergency corpus, saving for his children’s higher education, and planning for an early retirement in 13 years at the age of 50. Financial planner Anupam Guha from ICICI Securities has provided recommendations to help Patil achieve these goals. Let’s break down the recommendations and strategies for each of Patil’s financial goals.

Emergency Corpus

An emergency corpus of Rs.3 lakh, equivalent to six months of household expenses, is recommended by Anupam Guha. Patil can allocate his liquid fund and fixed deposit for this goal and invest the amount in a money market fund.

Children’s Higher Education

Patil wants to save for his children’s education, with estimated needs of Rs.31.8 lakh and Rs.35.8 lakh in eight and 10 years, respectively. For the older child’s education goal, he can allocate his stock portfolio and start an SIP of Rs.12,885 in an equity fund. For the younger son’s goal, he will need to start an SIP of Rs.15,570 in an equity fund. Since he already has SIPs worth Rs.69,000 running in the required funds, Patil can link this amount to these goals.

Early Retirement

For early retirement in 13 years, Patil will need a retirement corpus of around Rs.2.4 crore to last him till he is 80. According to Guha, this goal can be achieved using Patil’s existing resources. Patil can allocate Rs.74 lakh from his equity fund corpus to this goal, which will grow to the required amount in the specified time frame. He will not need to make any fresh investments.

Insurance

Patil has a term plan of Rs.1 crore and a family floater cover of Rs.7.5 lakh provided by his employer. Guha suggests he also buy an independent family floater plan worth at least Rs.25 lakh, which will cost him about Rs.2,500 in monthly premium.

In summary, Patil’s financial planner has provided a comprehensive plan to help him achieve his financial goals, including building an emergency corpus, saving for his children’s higher education, and planning for an early retirement. The strategies involve allocating existing resources, starting SIPs in equity funds, and obtaining additional insurance coverage.

FAQ

Q1: What is the recommended emergency corpus for Patil?

A1: An emergency corpus of Rs.3 lakh, equivalent to six months of household expenses, is recommended.

Q2: How can Patil save for his children’s higher education?

A2: Patil can link existing SIPs and start additional SIPs in equity funds to save for his children’s education.

Q3: What is the suggested insurance coverage for Patil?

A3: Patil is suggested to have an independent family floater plan worth at least Rs.25 lakh in addition to his existing insurance coverage.