Chirag,28 years old, lives in Bangalore with his wife, Vandana, 25, and two children. Daughter 7 years old and son 5 years old.Chirag's tale home pay is Rs. 1.25 lakh every month, while the flat he bought a few years ago, fetches a rent of Rs. 12,000 a month. He is paying Rs. 23,000 for a home loan, Rs. 13,000 for a car loan, Rs. 15,000 for a personal loan and Rs. 21,000 for a loan from a friend. After this, the house rent, household expenses, education costs and insurance premium, as well as miscellaneous expenses account for another Rs. 29,700, leaving the Couple with a monthly surplus of Rs. 29,300.

Vandana is a College Lecturer and earns Rs. 50,000/- per month out of which she has an expenditure of 25% on herself. She has liquid assets worth 4 lacs and Mutual fund investments worth Rs.5 lacs. (on current value) Which earns 12% return on an average. She has no liabilities.

Assets and Liabilities:

Assets: Own house (under mortgage) Rs. 40 lakhs, Insurance (SV) Rs.3.76 lakhs,

Jewellery Rs. 1.8 lakh, Cash Rs 80,000 and PPF/EPF Rs 62,000

Liabilities: Home loan Rs. 24 lakhs, Personal loan Rs. 5.5 lakhs and Car loan

Rs. 2.2 lakhs

Insurance coverage:

He just has one Ulip, which offers him a cover of Rs. 3 lakhs (maturity period 10 years from now), and a child plan with an insurance of Rs. 2 lakhs. He recently bought a term plan, but it is a home loan protection policy, which covers him only for the outstanding home loan. Life expectancy of Chirag and Vandana is 85 years each.

Average inflation is expected to be around 5%. Retirement fund to yield 7.5% returnAssume that all SIP investments are made in Hybrid mutual funds which is expected to give 12% nominal annual return. All SIPs are made at the beginning of the month.

You are required to:

a.ascertain what is good and bad about their present situation?

b.Help the client to set and prioritise the goals and give your recommendations

to meet the goals.

Suggest a suitable estate planning method too for the couple.