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Funds required to meet goals Rs 1 crore

This money can be used for buying an immediate annuity plan which shall fetch lifelong income.

The disposable surplus of '6 lakh can be invested every year in the following manner for the next 25 years:

Invest Rs 25,000 per month in an SIP of balanced (equity and debt) over the next 25 years. This will help in creating a corpus of Rs 75 lakh at cost (R236 lakh in value terms if growth is aimed at 8% a year).

This will help her for her retirement in full.

Medical insurance be purchased for Rs 3 lakh which will cost a bare minimum of about Rs 7,000 per year.

No claim bonus will help in later years.

A sum of Rs 1.5 lakh be parked every year in a PPF yielding 7.6 per cent a year. Over 20 years this shall translate into a future value of Rs 70.6 lakh.

This money can be used for buying an immediate annuity plan which shall fetch lifelong income.

A sum of Rs 1.5 lakh can be saved in a short term debt fund for five years growing at 7.5 per cent a year which can be withdrawn every five years to meet vacation and foreign travel.

The EPF accumulation presently with funding at same pace, earning 7.6 per cent a year and gratuity at retirement will fetch her about Rs 80 lakh at retirement.

The PPF at maturity can be used to buy an immediate pension policy at retirement or a tax free bond.

Bank deposits may be kept at bare minimum levels to meet contingency requirement for the next 25 years.

Create a WILL in favour of her parents and ensure that all financial holdings have a nomination to secure the assets.

( Source : Deccan Chronicle. )
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