How to save Rs 1 crore for your child's education, marriage in 20 years
Financial planner Anupam Guha from ICICI Securities suggests that Singh build an emergency corpus of Rs.1.8 lakh, worth six months of household expenses. He can allocate his cash for this goal and invest it in a money market fund. Next, he wants to buy a car worth 6.7 lakh in five years and can assign his equity funds for the same.
He will also have to start an SIP of Rs.2,218 in a hybrid fund to achieve the goal. Singh also wants to buy a house worth Rs.60 lakh in seven years. For this, he can use the insurance maturity amount of Rs.17 lakh that he will receive on retiring in 2030, along with leave encashment of Rs.10 lakh.
In addition to this, he will have to start SIPs of Rs.26,370 in equity funds to meet the goal.
For his child’s education, he will need Rs.40.4 lakh in 17 years. For this, he will have to start an SIP worth Rs.6,815 in an equity fund. For the child’s wedding in 20 years, he will need Rs.64.1 lakh and can allocate his stocks for the goal.
He will have to start an SIP of Rs.3,281 to meet the goal. For retirement, Singh will need Rs.3 crore in 30 years and can allocate his AFPPF for the same. Besides, he will start getting pension from 2030 and this will be sufficient to take care of his expenses after retirement.
For life insurance, Singh has a group plan of Rs.75 lakh provided by the government, for which he is paying a monthly premium of Rs.7,500. As per Guha, he should also buy an independent term plan of Rs.1 crore at Rs.1,000 a month, as the group cover will expire in 2030. For health insurance, Guha does not have an independent plan as all his medical expenses are covered by the government and will be taken care of for the rest of his life.
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