Prioritise and reconsider

Deepak (36) is married and has two sons, aged seven and 10. He works as a marketing manager and takes home an amount of Rs 85,000 every month. His monthly expenses, including EMIs, amount to Rs 50,000, leaving an investible surplus of Rs 35,000 with him. He has a small home loan outstanding. Deepak also has some money in the EPF, PPF, NPS and also a small amount in stocks. He wants to accumulate a corpus for his retirement and pay for his children's education and marriage. He also wants to know whether he has sufficient life insurance. Emergency corpus At the moment, Deepak has Rs 1 lakh in his savings bank account. He should maintain an emergency corpus of Rs 3 lakh (equal to six month's expenses) in a sweep-in fixed deposit and liquid funds. This will help him earn a higher rate of interest without compromising on liquidity. Action: Build an emergency corpus and place it in a sweep-in fixed deposit and liquid funds. Life insurance Deepak has purchased a term life cover of Rs 1.50 crore in addition to the Rs 12.5 lakh life insurance provided by his employer. This takes his total life cover to Rs 1.63 crore. This is sufficient for his needs and proportionate

This article was originally published on November 03, 2021, and last updated on November 16, 2022.