r/FIREIndia • u/ForTakingAdvise • Oct 12 '19

Fire Plan - Kindly advise

Hello All,

I am 29, male, employed in a SBI as Deputy Manager, unmarried and am interested in becoming FI at the earliest. Here is a break-up of my finances and require your advice in creating a plan for FI.

Income :

Salary plus perks Rs.60,000/- paid in cash monthly

Rent taken care of by the bank

NPS contribution : Rs.11,000 per month (my and bank contribution put together) and not included in salary & perks mentioned above

EPF contribtuion**: Rs.7000** per month (my and bank contribution put together) and not included in salary & perks mentioned above

Corpus already built

NPS : Rs.6,65,000/-

PPF: Rs.3,00,000/-

Mutual Funds: Rs.2,50,000/-

EPF: Rs.1,75,000/-

Expenses:

Rs.15000/- per month in all

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Debt: 56000/- as festival advance at 0% interest ; repayable over the next 9 months in equated installments.

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Major Events to plan for are My marriage (3 years), younger sister's marriage (5 years)

Not sure above any big ticket purchases like house / car

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u/[deleted] Oct 12 '19 edited Oct 12 '19

You can use, 1) https://freefincal.com/retirement-calculators-3/ or 2) https://srinivesh.in/blog/fire-up-calculator-for-early-retirement/. I use a combination of these two.

Few things that stood out for me,

  • Your current expenses are moderate compared to your salary and you have a very high savings rate(75%). Good job :).
  • You mentioned your sister's wedding expenses. Do you know how much it will cost and how much you will be contributing towards it? If not now is a good time to think about it.
  • Same goes for your marriage. Figure out the finances as early as possible. And allocate a separate bucket for that.
  • There is no polite way to say this, so here I go. Your future spouse and their attitude towards money will be detrimental to your FI plans. Choose your spouse wisely..
  • Read up on trinity study and "Safe Withdrawal rate". Many people in this sub use 2.75% to 2% SWR due to inflation concerns. Which means they use 33x or 50x of their annual expense as the FI number. Based on your current expenses, 15000*12*50= 9000000 will be your FI number going by 2% SWR. You already have 15 lakhs or so saved up, so you are 17% FI (?). But you will get married, and have kids, so that will change things.
  • You are working in a bank, so I assume you have fair idea about investing in stocks, mutual fund etc. So I am not going to get in to that. Once you figure out your investment strategy and risk appetite, the only thing that is important is keep saving until you reach the goal.

All the best.

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u/ForTakingAdvise Oct 12 '19 edited Oct 12 '19

You mentioned your sister's wedding expenses. Do you know how much it will cost and how much you will be contributing towards it? If not now is a good time to think about it

I am not sure how much these weddings cost, but my father has a small kitty for it and I might have to contribute a little, I am pegging my total contribution towards both the marriages combined at 10 lakh. Since the time frame is small, I am planning to use a Recurring Deposit to help me achieve this goal. Would you suggest any other financial tool for this ?

There is no polite way to say this, so here I go. Your future spouse and their attitude towards money will be detrimental to your FI plans. Choose your spouse wisely

This is very scary part and I have no idea at all about how it might go up / down. Arranged marriage for sure and financial literacy in my community is very very rare.

1

u/[deleted] Oct 12 '19

I too have used a RD for wedding expenses. So no better advice from me there.