When Krishna Patel and his son Amit (names changed) walked into our office, they had a simple problem: The senior Patel (59) was to retire in a year’s time and needed to effectively use his retirement corpus.
The father expected his provident fund (PF) maturity to be around Rs 60 lakh. He had a fixed deposit (FD) balance of Rs 10 lakh, about Rs 1 lakh in savings account, an equity portfolio of around Rs 4 lakh and owned a small, self-occupied flat in the Mumbai suburb of Vile Parle. He had a personal health insurance cover of Rs 5 lakh that also covered his wife (56), a homemaker.
His goals included his son’s marriage in a year for which the FD would be used. His current monthly expenses were Rs 25,000 and this was expected to remain unchanged after retirement. Since he was used to travelling by car, he would need a new car in seven years and also a driver. He was presented with the following solution:
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