Government staff must continue to invest in FP to accumulate wealth for retirement

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I have been working at CBI as a stenographer (central government job) since 1999. My net salary for the month of October 2021 is ??57,000 and my monthly expenses are about ??35,000. Although I have completed 21 years of service, but cannot deposit any money in any way except purchasing 2-3 small policies like SIP from ??2000 monthly for the last 3-4 years, LIC policy of ??2 lakh etc. Except these ??7-8 lakh in GPF. How do I go about investing my money?

Now I have to finance the education of my only daughter who will graduate next year, then the expenses of her marriage in 7-8 years. Apart from these I also want to buy a house but I don’t have a lot of money for the above mentioned expenses. I only left 12 years of service. So please kindly guide / suggest appropriate plans to earn money to do the above mentioned expenses.

Hidden name on request

We suggest that you continue to invest in GPF to accumulate wealth for your retirement needs. However, your ongoing investments in the LIC policy will provide life coverage to the term of the policy as well as the maturity corpus.

To continue building wealth to achieve your goals, we suggest you invest in equity-focused mutual funds. Considering the SIP investment of ??22,000 (monthly savings) for the remaining service life and assuming a 12% return per year from equity funds, you may be able to accumulate around 70 lakh in 12 years. You can consider a healthy mix of large and mid cap, flexible cap, and value in your portfolio for investments. You can choose Axis Growth Opportunity Fund & HDFC Large & Mid Cap Fund in the Large & Mid Cap category, UTI Flexi Cap Fund & Parag Parikh Flexi Cap Fund in the Flexi Cap category and IDFC Sterling Value Fund in the Value category.

I am 26 years old and my income is 30,000 per month. I invest ??1.5 lakh per year in PPF. Please suggest any mutual fund to invest in to raise a large body of work in 15 years.

-Name hidden on request

It’s a wise decision to invest ??1.5 lakh pa in PPF. This will not only give you wealth creation but also tax benefits every year under section 80C of the Income Tax Act. Considering your young age, we appreciate your decision to invest in mutual funds. You can build your portfolio by investing SIP in Mid Cap, Small Cap, Value and Flexi Cap funds over a period of 15 years. You can consider also dividing your monthly SIPs into Mirae Asset Mid Cap Fund, Kotak Small Cap Fund, IDFC Sterling Value Fund and Parag Parikh Flexi Cap Fund.

Sanjiv Bajaj, Co-Chairman and Managing Director, Bajaj Capital.

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