Seek help in financial planning for woman

POSTED BY saatvika ON June 13, 2012 4:44 pm COMMENTS (4)

I am a 25 year old IT professional, soon getting married to an NRI & relocating to US shortly. We are looking at spending next 10 years in US.
I want to create some corpus in India which would meet our needs after returning. Please help me in structuring a plan . [strictly woman’s perspective ]

Before:
• Currently I am investing 6K/month in SIPs..
o ICICI Focused Blue Chip 2K
o SBI emerging business fund 2K
o UTI opportunities 2K
• GOLDbees ETF 1 unit per month. Currently holding 10 units
• Insurance cover with 12K /year premium.
• Shares worth 30K

After:
1. Individual term plans to cover both of us. Again, Can he be covered in India ( he is not a GC holder yet)
2. Build a corpus of 5 lakhs in FDs in next 2 years – emergency fund
3. SIPs 15K/ month for next 10 years. Please suggest if the above are good or need any modifications
4. Continue GOLDbees ETF 1 unit per month
5. Add PPF 50k per year
6. short term investment mode to buy jewelry every 2 years
Please suggest if I am missing anything in the plan.

4 replies on this article “Seek help in financial planning for woman”

  1. BanyanFA says:

    Just as a disclosure Ashal – I am reasonably aware of US & UK tax laws from NRI perspective.

    1. Dear BanyanFA, thanks for the disclosure. I’m well aware of this aspect regarding you & that’s why I agreed with you for the basic query of dear Saatvika that she should sit with a financial planner. After all opting you or anyone else should be her choice. Hope you do not mind. 🙂 🙂 🙂

      Thanks

      Ashal

  2. Dear Saatvika, the most important point for your financial planning is that you are relocating for US of A at least for 10Y as of now (which may increase in future or you may remain there permanently) & the taxation issue ‘ll impact you in a big way. I’m agree with dear BanyanFA here that you please sit with a financial planner who is competent enough on US Taxation.

    Thanks

    Ashal

  3. BanyanFA says:

    Saatvika,
    I do appreciate most of your points in your queries. However, the answer to that is not that simple as you may be expecting. Points which you need to consider are :
    1. Regulatory requirements in US considering you would become a US resident. One example is that US NRIs can not invest into any schemes / ULIPs/ products of ICICI Prudential’s
    2. Regulatory requirements in US – e.g. NRIs can not invest legally into PPF
    3. Your and your husband’s Tax liability in US – NRE FDs, though tax free in India are taxable in US. You need to declare them there.
    4. Option of taking insurance in US – at times it is cheaper and more convenient to take insurance in your respective foreign country.
    5. Tax liablity in India – if you don’t plan adequately, you would end up paying a massive chunk of your investments to the tax returns.

    And above all, there is no ‘Women Perspective’. Women are equally treated when it comes to financial planning, unless they are not earning and that too from tax perspective only. It would be really important to have lengthy financial discussions to completely understand your financial position and future before venturing into any advise.

    A lot of my NRI clients based out of USA have got their fingers badly burned in US from tax perspective because they didn’t really think about many facets mentioned in the above paragraphs and hence attracted much avoidable tax implication.

    One thing is very important – before you leave from India – please open a NRE bank account so that you can legally make investments from US.

    Regards
    BanyanFA

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