Important Note: This plan is a guideline. Actual returns and market conditions can vary. It’s crucial to consult with a qualified financial advisor for personalized advice.

Understanding the scenario: Husband and Wife earning 12L per annum, considering tax liability under new regime 2025

  • Date of Birth: 01/07/1995
  • Age: 30 years old
  • Combined Annual Income: ₹24 Lakhs (₹12 Lakhs + ₹12 Lakhs)
  • Tax Regime: Indian Tax Policies (We’ll assume the new regime for simplicity, but will also point out options for old regime)

Financial Goals and Timeline:

  1. Car (₹6 Lakhs): 5 years (2029)
  2. Home (₹1 Crore): 9 years (2033)
  3. Vacation (₹2.5 Lakhs): Every 3 years (2027, 2030, 2033, etc.)
  4. Child Education (₹25 Lakhs): 16 years (2040)
  5. Retirement (₹5 Crore): 30 years (2055)

Investment Strategy:

We’ll use a diversified approach, combining:

  • Equity (for long-term growth)
  • Debt (for stability and short-term goals)
  • Tax-saving instruments

Assumptions:

  • Average annual inflation: 6%
  • Average equity returns: 12%
  • Average debt returns: 7%
  • Average increase in salary 5% per year.

Detailed Plan:

1. Current Financial Situation:

  • Annual Income: ₹24 Lakhs
  • Monthly Income: 2 Lakhs
  • We will assume 50% savings rate for investment. Monthly savings 1 lakh.

2. Tax Planning (New Tax Regime):

  • The new tax regime offers lower tax rates but eliminates most deductions.
  • However Section 80CCD(2) employer contribution to NPS is still deductible.
  • We will assume 50,000 rupees per year is invested into NPS by both the employer and employee.

3. Goal-Based Investments:

  • Car (₹6 Lakhs by 2029):
    • Timeline: 5 years
    • Investment Strategy: Short-term debt funds or recurring deposits.
    • Monthly investment required: Approximately ₹8,500.
  • Home (₹1 Crore by 2033):
    • Timeline: 9 years
    • Investment Strategy: A mix of equity mutual funds (large and mid-cap) and debt funds.
    • Monthly investment required: Approximately ₹45,000.
    • Consider a home loan for a significant portion of the purchase, leveraging tax benefits (if using the old tax regime).
  • Vacations (₹2.5 Lakhs every 3 years):
    • Timeline: 2027, 2030, 2033, etc.
    • Investment Strategy: Short-term debt funds or recurring deposits.
    • Monthly investment required: Approximately ₹6,000 (spread across the 3-year cycle).
  • Child Education (₹25 Lakhs by 2040):
    • Timeline: 16 years
    • Investment Strategy: Equity mutual funds (flexi-cap, mid-cap).
    • Monthly investment required: Approximately ₹8,000.
  • Retirement (₹5 Crore by 2055):
    • Timeline: 30 years
    • Investment Strategy: Aggressive equity mutual funds (flexi-cap, small-cap), National Pension System (NPS).
    • Monthly investment required: Approximately ₹32,500.

4. Investment Instruments:

  • Equity Mutual Funds:
    • Large-cap funds (for stability)
    • Mid-cap funds (for growth)
    • Flexi-cap funds (for diversification)
    • Small cap funds (for agressive growth)
  • Debt Funds:
    • Short-term debt funds (for short-term goals)
    • Corporate bond funds (for moderate returns)
  • National Pension System (NPS):
    • Tax benefits and long-term retirement savings.
  • Recurring Deposits (RDs):
    • Safe and predictable returns for short term goals.
  • PPF (Public Provident Fund):
    • If using the old tax regime, this is a great option.

5. Monthly Investment Allocation (Approximate):

  • Car: ₹8,500
  • Home: ₹45,000
  • Vacations: ₹6,000
  • Child Education: ₹8,000
  • Retirement: ₹32,500
  • NPS: 10,000 (5000 employee, 5000 employer)
  • Total: 110,000

6. Review and Rebalance:

  • Review the portfolio annually.
  • Rebalance investments to maintain the desired asset allocation.
  • Adjust the plan as needed based on life changes, income changes, and market conditions.

Key Considerations:

  • Emergency Fund: Maintain an emergency fund of 6-12 months’ living expenses.
  • Insurance: Ensure adequate health and term life insurance coverage.
  • Debt Management: Minimize high-interest debt.
  • Financial Advisor: Consult with a SEBI-registered financial advisor for personalized guidance.

Disclaimer: This is a general investment plan. Actual results may vary. It’s crucial to conduct thorough research and seek professional advice before making any investment decisions.

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