Case Study For Cfp

FPSBI/CE/03-01/09/CE-1

Annual Case Study for CE Points for the year 2008-09 Case Study – Dr. Adarsh and Sunanda Saini Today is 31st March 2009. Dr. Adarsh Saini, aged 36 years, has come to you, a CERTIFIED FINANCIAL PLANNER CM, for help in prepare a Financial Plan to accomplish his financial goals. You have gathered the following information: Background Dr. Adarsh Saini is an Eye Surgeon running his Clinic in Chandigarh for the last eight years. His wife Sunanda Saini, aged 33 years, is working in a telecom company in Chandigarh for the last six years. They have two children, Dhruv and Anshika, aged 5 years and 2 years, respectively. Dhruv is studying in pre-school while Anshika goes to a play school. Adarsh’s parents stay at Ferozepur in their ancestral house. Adarsh’s father has retired from a private job and is financially dependent on Adarsh. Adarsh lives in his own flat gifted to him by his father-in-law in August 2004. Dr. Adarsh pays an annual rent of Rs. 1,50,000 for his Clinic premises. Dr. Adarsh also delivers lecture as a guest faculty in a medical college on weekends. He wants to retire at age 60 and spend his remaining life in his home town Ferozepur. Dr. Adarsh is also Karta in Saini & Sons (HUF). Income & Expenses Dr. Adarsh has earned a net professional fees (after deducting all professional expenses) Rs. 7,50,000 in the financial year 2008-09. This earning is expected to increase every year by 6% p.a. till his retirement. Sunanda got salary of Rs. 4,20,000 in FY 2008-09 which is expected to increase by 5% till her retirement at the age of 58 years. The living expenses of the family are Rs. 40,000 p.m. today. He has earned Rs. 95,000 as interest from his bank deposits in FY 2008-09. Assets & Liabilities of Dr. Adarsh and Sunanda, as on 31st March 2009 1) 2) 3) 4) 3) 4) 5) 6) 7) 8 9) 10) 11) 12)

Fixed deposit in a public sector bank Current a/c balance Savings a/c balance Salary a/c bal. of Sunanda Shares (Market Value) PPF a/c balance Equity diversified mutual fund units (Market value) Flat in Chandigarh (Market Value) Gold Jewelry (Market Value) Gold coins (Market Value) GPF a/c balance of Sunanda Car (Market value) ULIP Policy (Market value of outstanding units) Car Loan outstanding

Rs. 3,00,000 Rs. 52,000 Rs. 12,000 Rs. 62,000 Rs. 3,50,000 Rs. 2,55,000 Rs. 4,50,000 Rs. 35,00,000 Rs. 2,50,000 Rs. 3,00,000 Rs. 2,18,500 Rs. 2,50,000 Rs. 2,25,000 Rs. 1,15,000

Other Information He bought a ULIP in Sep 2004 with sum assured Rs. 10,00,000 by paying annual premium Rs. 60,000 for term 15 year. He has also taken a floater Health Insurance policy for his family with sum assured of Rs. 4,00,000. Goals & objectives 1. 2. 3. 4. 5. 6.

To provide for higher education of Dhruv and Anshika. To provide for Rs. 20 lakh in today’s value as marriage expenses for each child. Build a retirement corpus to maintain the same standard of living after retirement Income Tax planning for his family and Estate Planning for hassle free transfer of his wealth to heirs. Accumulate funds to purchase premises for his clinic after five year from today. Restructure Investment Portfolio by allocating assets as per their risk profile.

Assumptions 1. 2. 3. 4.

Average Inflation rate to be 5% p.a. Average return on equity shares, diversified mutual fund units and ULIP units is 15% p.a. Average returns on Debt oriented Balanced Mutual Fund a/c is 8.5% p.a. Monthly expenses after retirement will be 25% less than before retirement.

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