Sumit Kumar, 37, stays in Mumbai with his wife Swagata Sinha, 36, and son, Mihir, 6. Sumit is a central government employee while Swagata is a homemaker.
<p>The Mumbai-based couple will have to carefully evaluate their goals and scale them down realistically</p>
Sumit Kumar, 37, stays in Mumbai with his wife Swagata Sinha, 36, and son, Mihir, 6. Sumit is a central government employee while Swagata is a homemaker.
The family’s income as on date is Rs. 55,000 per month. Though Sumit was promoted and his salary was increased by Rs. 22,000, the enhanced income will reflect after a few months. The family spends Rs. 35,000 per month on household and lifestyle expenses.
Their investments include gold (Rs. 2 lakh), Public Provident Fund (Rs. 1.6 lakh), Employees’ Provident Fund (Rs. 11 lakh), mutual funds (Rs. 22.25 lakh) and bank balance (Rs. 45,000). They do not have any liabilities. Sumit has total life coverage of Rs. 59 lakh and Swagata has a traditional plan with a sum assured of Rs. 50,000. Their annual premium outgo towards all life, health and vehicle insurance is approximately Rs. 60,000. Their main goals include buying a house, planning for their retirement and Mihir’s education and his wedding.
Contingency planning: 6 months
Monthly expenses (post recommendation) Rs. 36,762
Life insurance
Health and other insurances
Property purchase
Child’s education and wedding
Retirement goals
With a reduction in goal value, Sumit will need Rs. 50,000 per month in today’s value (Rs. 1.90 lakh per month starting 2035). The inflation-linked corpus of Rs. 5.10 crore is expected to last till Swagata is 85 years old. Sumit’s EPF maturity proceeds assuming his contributions continue till retirement has been allocated to this goal. But additional receivables on account of gratuity, leave encashment and superannuation (if any) have not been included. So, to meet the deficit Sumit should:
Tax goals
Sumit can avail himself of tax benefits under Section 80C of the Income Tax Act, 1961 through his contributions to his EPF, PPF and his life and health insurance premium outgo.