This composite case is built from patterns I see repeatedly in practice. Names and numbers are fictional. I show every calculation so you can check it and reuse the method. This is Part 2 of a four-part case study.
Read Part 1 here: Retirement Planning Case Study Part 1.
Read Part 2 here: Retirement Planning Case Study Part 2.
Read Part 3 here: Retirement Planning Case Study Part 3.
About the author: Ajay Pruthi is a fee-only SEBI-registered investment advisor. He can be contacted via his website plnr.in.
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The story so far
In Part 1, two calm moves, equity SIPs and a debt-fund migration, fixed a 40 lakhs tax leak and reached 50 with about 80 lakhs of cushion. In Part 2, his clever shortcuts died on human facts, and his freedom window settled between 49 and 51. In Part 3, the 1.5 crore house question opened five doors, each with a price between one working year and a brother’s signature.
Every cushion he has built now meets its final claimants: his parents’ health, a possible marriage, and one insurance decision that surprises everyone.
Scenario 12: I asked about his parents’ health. Diabetes and blood pressure at 70 means insurers may refuse them. Verdict: build a 60 to 75 lakhs medical fund in his own name first; supports like government cover come after.
Suppose we apply for about 10 lakhs of health cover for each parent and the applications come back refused, which at 70 with diabetes or heart history is common. Then his money is their health policy, and it must be sized honestly: two people across 15 to 20 years, cardiac procedures at 5 to 8 lakhs, joint replacements at 4 to 6 lakhs each, cancer treatments running 15 to 40 lakhs. A dedicated parents medical fund of 60 to 75 lakhs, kept in his own name after Scenario 5’s lesson, earmarked and excluded from every retirement calculation. Only after this fund exists do the supports enter: the government’s senior citizen cover as a floor for listed procedures, and a check, before he ever resigns, on whether his corporate policy can convert to a personal one, which quietly makes his resignation date a health insurance decision, not just a portfolio decision.
Fit it to the numbers: the Scenario 3 corpus of about 6.8 crores minus a 70 lakhs fund leaves about 6.1 crores against the renter need of 6 crores. The plan just about stands, and the cushion is fully spent. Every rupee of surplus in this file keeps getting claimed by a question nobody had asked yet.
Scenario 13: I asked, might you marry? He said maybe, who can say. Verdict: marriage moves the target more than any market event; retiring at 50 then survives only with a working spouse.
Suppose he marries in about 3 years, at 45: a wedding of 20 lakhs from the FDs, and joint expenses of about 1.1 lakhs a month in today’s terms for two people renting. Joint expenses at 50 become about 1.75 lakhs a month, or 21 lakhs a year, plus health premiums for two people.
And here a detail most people never think about: the spouse’s age decides how long the money must last, because the plan must run until the younger of the two reaches 90. If his wife is 3 years younger, she is 47 when he retires at 50, and the corpus must last 43 years, until she is 90. At zero real return those 3 extra years cost about 65 lakhs, taking the total need to roughly 10.3 crores. If instead the wife is his age or elder, the horizon stays 40 years or shorter, and the same corpus stretches further. Two identical weddings, two very different retirement bills, decided by a birth date.
The full picture at 50 with a wife 3 years younger: safe money after the wedding cost, 1.8 crores in debt funds at 6 percent = about 2.9 crores; EPF 1.4 crores; equity SIPs at 10 percent = 2.2 crores; total about 6.5 crores against a need of roughly 10.3 crores. Shortfall: nearly 4 crores. Retiring at 50 on one income with a non-earning spouse is simply not possible, and even stretching to 55 on one income does not close it, because when money earns only inflation, the target inflates exactly as fast as the corpus grows.
The honest options: a working spouse whose income covers a good part of the joint expenses, which keeps 50 to 52 alive; retirement closer to 56 to 58 on one income; or joint expenses lower than I assumed. If children come, education arrives as a full new goal and shifts everything again. None of this is an argument against marrying. It is the reason I told him plainly: the day your relationship status looks like changing, come and see me that week, not that year, because that one event moves these numbers more than every market crash and fund choice combined.
Scenario 14: I asked, does anyone depend on your income? He said only my parents. Verdict: no term insurance needed; his existing 2 crores already self-insures them. What he actually needs is a will.
This question surprises people, because the standard rule says: if you have dependents, buy term insurance. He has dependents, his parents. So does he need a policy? Let us do the arithmetic instead of following the rule blindly.
Term insurance exists to replace your income for the people who depend on it, if you are not there. So the real question is: if he dies tomorrow, how much money do his parents need, and how much already exists? His parents are around 70, and we are planning to age 90, so their money must last about 20 years. Even if we assume their expenses at a generous 50,000 a month, that is 6 lakhs a year, and at our zero-real-return assumption, 6 lakhs × 20 years = about 1.2 crores. Against that need stand his 2 crores of FDs alone, before we even count the 50 lakhs of EPF. His existing assets cover his only dependents nearly twice over.
That is the textbook definition of being self-insured: the corpus already does the job a policy would do. Buying a term plan here would mean paying premiums every year to protect against a loss that is already protected. So the verdict is no, and any agent who tells this man he needs a 2 crore term plan because everyone needs term insurance is selling a product, not solving a problem.
But one thing replaces the policy, and it is not optional: a will, and clean nominations. If he dies tomorrow, the 2 crores exists, but can his 70-year-old parents actually reach it? Every FD, folio and account must have nominations in place, and a simple registered will must say plainly that his assets go to his parents, because a single man’s money, without a will, can get tangled in succession paperwork exactly when two grieving 70-year-olds are least equipped to fight it. The insurance he needs costs nothing at a premium and one afternoon at a lawyer’s office.
And note when this verdict flips: Scenario 13. The day he marries, especially a non-earning spouse, a new dependent arrives whose needs run 40-plus years, not 20, and whose required corpus his assets do not yet cover. That day, term insurance moves from unnecessary to urgent, sized to the gap between the family’s needs and the corpus, and bought quickly, while his health still prices it cheaply. No dependents, no term plan. Dependents already covered by assets, still no term plan, but a will. Dependents beyond the assets, term plan, immediately. The product never changes. The situation does.
Before you pick a scenario: the four actions that do not wait
You have now seen fourteen scenarios, and you may be tempted to first settle which one is yours. Do not. Whichever scenario wins, four actions happen this quarter, because they are common to every single one.
He buys his own health cover of 1 crore, built as a small base policy plus a large super top-up, together costing roughly 30,000 to 35,000 a year at his age; I have used 32,000 in the maths. Why now, at 42, while healthy? So that all waiting periods finish while his company cover still protects him. Insurance is bought with time, not just money. And that 60 lakhs of lifetime premiums you saw inside every target: it exists in every scenario too, which is exactly why this purchase belongs to all of them.
He applies for about 10 lakhs of cover for each parent, costly and co-pay-heavy at 70, but we apply while their health record permits. If the insurers refuse, Scenario 11 takes over: the medical fund first, supports like the government’s senior citizen cover and the corporate-policy conversion after. Supports have conditions; our own fund does not.
He completes nominations on every FD, folio and account, and signs a simple registered will in his parents’ favour, the free insurance from Scenario 14.
And he starts the debt-fund migration paperwork, because as Scenario 1 showed, the taxman is already collecting from the FDs every year while he decides.
Now, all fourteen scenarios. You choose.
Stay in FDs and fall just short, because the taxman compounds too. Send new savings to equity and reach 50 with about 40 lakhs spare. Migrate the FDs to debt funds as well and reach 50 with about 80 lakhs spare, the combination I recommended, with 49 genuinely in range. Push old money into equity for 35 lakhs more, or meet yourself in a crash. Gift to the parents and save over 4 lakhs a year, or hand a future court case to the family. Buy the house now for certainty and pay about one extra working year for it. Take the loan and pay the bank to hold your own money. Buy at 50 in the city you finally chose. Wait for a house that may be inherited, or inherited, sold and upgraded. Build a 70 lakhs wall around your parents’ health and watch your cushion vanish into it. Skip the term insurance an agent would love to sell him, because his corpus already does that job, and spend one afternoon on a will instead. Or marry, and cheerfully tear up every number on this page.
So, reader: which scenario is the best one?
Sit with that for a minute, because here is the truth this whole case was built to show you. There is no best scenario. The right answer depends on whether he has siblings, whether his parents are insurable, whether he knows his city, whether he will marry and whom, whether his hands shake in a crash, and a dozen more things no calculator, no app, and no article, including this one, can know about him. Two men with identical bank balances can walk out of my office with opposite plans, and both plans can be correct. That is not a weakness of financial planning. It is the entire point of it, and it is why the subject is called personal finance. The numbers are maths. The plan is you.
The end of the case, and of the series
If you read all four parts, you watched one simple question- which equity fund should I buy- need fourteen scenarios, a will, a brother, a possible wife and two 70-year-olds’ health reports before it could be answered honestly. That is not unusual. That is what every real financial plan looks like underneath, and it is why no article, calculator or fund list can finish the job that your own answers must start.