PLAN OF ACTION

The disposable surplus of `6 lakh can invested in the following proportion for the next 10 years:

Investments may be carried out in an SIP (balanced - equity and debt) of `25,000 per month over the next 10 years. This will help create a corpus of `30 lakh at cost (`46.94 lakh in value terms if growth is aimed at eight per cent a year). This will help her fund her retirement in full.

Medical insurance be purchased for `3 lakh which shall cost a bare minimum of about `15,000 a year. No claim bonus will help in later years.

Invest `1.5 lakh every year in a PPF yielding 7.6 per cent a year. Over 15 years, this will translate into a future value of `42,42 lakhs. This money can be used for buying an immediate annuity plan which shall fetch lifelong income.

Invest `1.5 lakh in a short-term debt fund for eight years, growing at 7.5 per cent a year. Its growth money can be withdrawn even earlier to meet vacation as and when it arises.

The EPF accumulation presently with funding at same pace, earning 7.6 per cent and gratuity at retirement will fetch her about `50 lakh.

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

Bank deposits may be kept at bare minimum levels to meet contingency requirement.