Magazine Investment Planning Investment Planning

BEST INVESTMENT
OPTIONS FOR INVESTORS IN THE AGE GROUP OF 30-45 With increased social and domestic responsibilities, an accurate and complete financial plan comprising of savings plan, child education plan and pension plan is appropriate for investors in the age group of 30-40 years

The events like marriage or the arrival of a child, change the thinking process, financial preferences and financial goals of an individual.
An investor in the age group of 30-40 years has tremendous responsibility, towards his own family members. This is why the age 30-45 years is the most important phase in one’s life cycle.
Three distinct stages are evident during this phase —

Young married (up to 35 years)
An individual at this stage is young and newly married. He has to take care of himself and his spouse. A young couple becomes interdependent with a shared responsibility for day-to-day expenses as well as achievement of future goals. If both, husband and wife are working then both should get adequate life cover. The ideal life insurance policy would be the one providing a higher life cover at a lower premium. LIC’s Bima Kiran is an exceptionally flexible and profitable insurance policy. Endowment policies like Jeevan Anand are other another good options. These provide returns for their additional bonus amount along with the sum-assured and have life-cover benefits. Also, the risk profile of a married individual undergoes tremendous change. The risk that a married individual can endure on his investments is considerably lower than that a young unmarried investor. Further, the future objectives/goals start taking concrete shape during this stage. It is advised that compulsory saving and investment strategy should start taking roots now. A Systematic Investment Plan (SIP) of a Debt fund or Equity fund, depending upon the risk profile of the individual, is ideal under the situation. The gift of lump sum money received should be invested in Company Fixed Deposits for assured returns and Growth options of Income funds for realistic returns.

Young married with children (up to 40 years)
The arrival of a child completely changes the financial situation of any young couple. It increases the family’s expenditure. Thus, the need for life insurance of the bread earner increases. At this stage, health and personal accident cover also become essential. Apart from this, the family’s investment needs an increase. Planning for a child’s education and marriage comes to fore. So a parent now needs to create funds for the future expenses of his child. These investment needs catering to the betterment of the child are in addition to the parent’s needs for themselves — better house, better car, holiday plans and above all adequate provision for retirement. There is rarely sufficient money to divide among all these requirements. Bonds from financial institutions like ICICI’s Deep Discount Bond, Bonds for children, Fixed Deposits in HUDCO or HDFC could be taken at this stage. SIP of the earlier stage should be continued along with the new investments. Childcare plans from Mutual funds as well as from LIC and ICICI Prudential Life Insurance could be considered.

Married with older children (up to 45 years)
During this stage, financial objectives change due to available protection in terms of insurance taken earlier. At this point the planning needs change to investment needs. Income protection is still required, thus, endowment plans like Jeevan Mitra and Jeevan Griha could be considered. For investment needs majority of investments could be made in Debt funds or Equity funds for their long-term growth potential depending upon the risk profile of the individual. With the term to retirement getting shorter, the need to provide income after retirement in the form of pension becomes urgent. LIC’s Jeevan Suraksha Plan, ICICI Pru Forever Life Pension Plan and HDFC Life’s Personal Pension Plans are some of the best pension plans available in the country.