Financial planning for a 30 year old salaried professional

This is a visual overview of the financial plan for a 30 year old salaried professional, prepared with the help of a financial advisor.

A financial plan tells you how much to invest on a monthly basis to meet your goals like retirement, buying a house/car etc.

Sachin Shah is a 30 year old software engineer. Sachin stays with his wife Anjali (college professor), in a rented apartment  in Bengaluru. They are planning a baby in the next 2 years.

Sachin’s parents stay in their hometown Ahmedabad, in their family owned house. His father is a retired government servant and his mother is a housewife.

Anjali & Sachin have financial goals like comfortable retirement, car and their future child's education and wedding.

Cost today is the amount required if the goal were to be achieved today

Understanding cash flows helps determine the investible surplus. Many people underestimate the true extent of their expenses until their advisor asks them to jot down each expense.

The couple’s annual expenses are Rs 7.2 lakhs per year (12 times the monthly expenses of Rs 60,000)

With a 6% inflation, the annual expenses will increase to Rs 37 lakhs after 28 years i.e. at the age of 58 (retirement age)

Sachin & Anjali need to generate a corpus, which can fund their expenses from the age of 58 (retirement age) to 85 (assumed life expectancy).

The calculation of retirement corpus is a bit mathematically involed. The final amount comes to ...

Required retirement corpus at the age of 58

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As a salaried professional, Sachin and Anjali contribute to Employee Provident Fund (EPF) every month.

Based on the current EPF interest rate of 8.65%, and calculations of other people with similar age and income

They also have investments in mutual funds worth Rs 1.7 lakhs and fixed deposits worth Rs 1.5 lakh.

Assuming equity investments will grow at 10% and FD at 6% post-tax.

Estimated value of financial investments at 58

These are future values of existing investments

To achieve the balance Rs 5 crore, invest Rs 14,500 on a monthly basis. With a 10% return rate, you will accumulate Rs 5 crore in 28 years.

Increase your monthly investment amount by 7% every year as salary is likely to increase.

DhanWise’s advisors recommended an 70:30 split between equity and debt and suggested SIPs in the following funds: 

Fund choices need to be monitored for a periodic basis and need to be changed if required. A financial advisor can help you choose funds and monitor them.

A professional advisor can help you do this. Click on ‘Build Your financial Plan’ and DhanWise will connect you to an experienced advisor.

Anjali & Sachin are planning a baby in the next 2 years and it is assumed that that child will enter university at the age of 18 (20 years from now). We are assuming that the parents will fund the child's education without taking an education loan.

Assuming that today, a 4 year degree costs Rs 40 lakhs (including food & stay) at a private university.

With a 8% inflation, the education cost will increase from Rs 40 lakhs to Rs 1.86 Crore after 20 years.

Invest Rs 15,000 on a monthly basis. With a 10% return rate, you will accumulate Rs 1.86 crore in 20 years.

Similarly planning was done for the other goals: 

With a financial plan you will know how much to invest on a monthly basis to meet your goals and maintain your lifestyle when you retire!
Spend 2 minutes to answer a few questions and we will prepare a plan for you. For free!

Financial planning for a 30 year old salaried professional

Financial planning for a 30 year old salaried professional

Introduction