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POSTED BY ON December 23, 2012 10:42 pm COMMENTS (7)
Hi
I’m 24, my take home salary post taxes/PF/fuel and excluding performance bonuses is a little over 45k. I started investing in PPF last year and ensure to invest upto the ceiling amount.
I have no other financial committments, I stay with my parents so no HR.
After PPF => 45000 – 8300 = 36700. So i’m left with this amount to spare.
Please suggest any other investments I can afford to maximise my savings.Also, what retirement options should I look at? I don’t know if its an appropriate age to think about it but I just want to be clear in my mind.
I don’t want to invest the entire amount, just a reasonable chunk.
Thanks!
P L
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one more thing, property tax would double (atleast in bangalore) if property is rented out, I am not aware of rest of the country. It could be possible to show the property as part self-occupied and part rented.
I agree with Muthu Krishnan. IF you are paying more tax than your dad, it is recommend that you create a rent agreement and claim tax benefits but your dad should show them as income.
even though you are staying with parents, you can claim HRA. If you want to be totally safe, make a rental agreement (available at any typist shop), transfer money to your father/mother (owner of property) account and show this amount as rent. The receiver should also show this money in their tax returns. receiver gets to deduct property tax and 30% of rent. check out pros and cons of taking this option and decide.
PL,
Can you invest little more time on educating yourself by reading some books like.
1. Jago Investor Change your relationship with money.
2. Retire Rich – Invest Rs 40 a day.
Wow thanks for such a quick response!
Going through the document you shared right now.
Thanks again!
What I meant was: You dont need to invest in 1 lakh in ppf right now”. Sorry.
It is the perfect age to think of retirement. You dont need to invest in ppf right now. You should focus on equity MFs (~ 70%) and the rest can be in PPF
You need to select at least one large-cap MF and one mid-small-cap MF and perhaps one balanced MF. Review your portfolio each year.
If you cut down your expenses now and save even more you can afford to save less for retirement down the line if you have other goals.
You can use the retirement calculators available at my website to plan your goal
You could use this to select a MF
http://freefincal.wordpress.com/step-by-step-guide-to-choosing-a-mutual-fund/
Remember inflation is the enemy and starting early and saving a significant portion are key to combat.
you have both working for you. Good luck!