What A Dual Income-New Kid Family Needs

Adequate life insurance, an inflation-adjusted education fund and careful retirement planning are among the essentials

- Deepesh Raghaw

Vikas and Kirti are both 30 years old. Vikas works with an IT company while Kirti works with a financial services firm. The couple is expecting a baby in two months.

Having recently bought a home, part of which was funded by a home loan, Kirti and Vikas pay an EMI of ₹35,000 per month.

They have not bought any life insurance till now since they don’t have financial dependents yet. Their respective employers provide them with health cover of ₹5 lakh and accidental disability cover of ₹50 lakh each.

They have augmented their health insurance coverage with a family floater plan of ₹10 lakh.

Their monthly expenses (excluding loan EMI) are ₹40,000. Though their expenses are set to increase after the baby is born, they think they can invest ₹55,000 on a monthly basis.

They have ₹2 lakh each in their savings accounts, which they want to retain as ‘comfort cash’. Apart from that, they have ₹10 lakh in fixed deposits and liquid funds and ₹3 lakh in equity mutual funds. Besides, they have ₹12 lakh in their EPF accounts, with a monthly contribution of ₹22,000.

Their primary goals include planning for their kid’s higher education (expected cost ₹25 lakh in 17 years) and providing for their retirement income, for which they are not sure about the amount needed. Though a vacation is not a top priority now, they would still want to earmark ₹1 lakh a year for that.

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