I am 40 years old. I have recently started investing in mutual funds for the long term (15-20 years) with a few goals in mind. For retirement and wealth generation (Reliance-Small Cap fund, direct plan; Rs15,000); and daughter’s education and marriage (SBI Bluechip Large Cap fund; Rs15,000). If needed, I will shift these to a balanced fund after 10-15 years. I also have Rs5,000 SIP in L&T Tax Advantage fund direct plan. Apart from these, there is Rs2 lakh in fixed deposit (FD), Rs2.5 lakh in PPF and Rs2.8 lakh in PF. I have ancestral land (2 acres) in a good locality. I have term insurance of Rs70 lakh and Rs63 lakh coverage from the employer under group insurance. There is survivor benefit for my daughter (4 years old). My wife is no more. I have Rs10 lakh health insurance, and Rs2 lakh health cover for my parents.
I have a home loan of Rs18.7 lakh (EMI Rs18,200), and I get net rental income of Rs12,000. My rent is Rs10,000. My salary is Rs84,000 per month, which is likely to increase to Rs1.2 lakh in a year or two. My other monthly expenses are Rs20,000.
I want to close the home loan and buy another property (land) after selling the house. I also want to buy a car in 2019. My parents’ retirement funds are in FDs, from which an SIP of Rs5,000 can be created. Please advise.—Name withheld
Let’s start with your insurances. Your life insurance is in order as you have seven times your annual income as a term plan and you have a group insurance provided by your employer. Your medical insurance is also in order. However, try to increase the sum assured for your parents.
