PLAN OF ACTION

■ Buy term assurance of ` 50 lakh for about 34 years for about

` 10,000 per year. Buy car worth ` 6 lakh using in three years using ` 2 lakh of owned funds and the rest funded by a bank loan.

■ The rest of ` 7.2 lakh disposable surplus can be placed in the following proportion every year for the next 25 years:

■ Invest ` 25,000 a month in an SIP balanced ( equity and debt) for the next 25 years. It will help in creating a corpus of ` 75 lakhs at cost (` 2.36 crore in value terms if growth is aimed at eight per cent a year). This will help him to plan for his retirement, child’s education and marriage needs in full.

■ Invest ` 1.5 lakh every year in a PPF yielding 7.6 per cent a year. Over 20 years, this will translate into a future value of ` 70.6 lakh. This money can be placed in a debt fund from the age of 5570 years and systematically withdrawn for later on needs in life. In between the term, if required, PPF funds can be partially withdrawn for child’s higher education expenses.

■ The EPF accumulation presently of ` 10 lakh with funding at same pace, earning eight per cent a year and gratuity at retirement will fetch him about ` 1.55 crore at retirement.

■ The PPF at maturity can be used to buy an immediate pension policy at retirement. Bank deposits may be kept at bare minimum levels to meet contingency requirement for the next 15 years.

■ Create a Will in favour of his wife and ensure that all financial holdings have a nomination to secure the assets.