Secure future with Ulip pension plan

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Name: Shwetha Sharma
Job: Manager
Age: 26 years
Dependants: None
Income: Rs 2.16 lakh/year

Name changed to protect identity

Shwetha Sharma, a 26- year-old engineer with a postgraduation degree in management, has just started her career as a manager with a multinational information technology company.

Her parents are well settled. She has a younger brother in high school. She earns a net salary of Rs 6 lakh per annum. She has studied with the help of an education loan and has to pay about Rs 1.44 lakh per year for the next five years to clear it off.

Household and commuting expenses would cost about Rs 2.4 lakh per annum. This would leave her with about Rs 2.16 lakh per annum as saving. She would like to continue working for about four years before getting married.

Financial goals

Shwetha wants to buy a home in the next five years and retire at 50 years.

Where are they now?

Shwetha will get a share in her parental home. Her mother has saved some jewellery for her marriage. Her father has kept Rs 2.6 lakh in a bank account to meet any contingency including to partially meet her marriage expenses.

The balance in Shwetha’s bank account is about Rs 1 lakh.

Her employer has provided her with a Rs 5-lakh personal accident insurance cover besides a mediclaim of Rs 1 lakh.

Recommendations

*Continue paying off the education loan;

*Real estate investment could be pursued after an year or more;

*Take a life insurance (term cover) for about Rs 20 lakh for a 40-year term. The premium could be around Rs 8,000 per annum;

*Take a Ulip-Pension plan with contribution of about Rs 50,000 a year

*Invest in two equity diversified mutual fund schemes with a monthly outgo of about `8,000;

*Invest about Rs 5,000 per month in gold ETF;

*Buy a disability or job loss insurance;

*Transfer Rs 1 lakh balance that you have in your savings bank account to a fixed deposit for a three-year term.

(L. Ravindran, PhD, is a financial advisor and MD of Wealthmax Enterprises Management Pvt. Ltd.)