PLAN OF ACTION

■ Retirement is quite some time away but risk exists on life and health. Term assurance of 2 crore may be taken by Mithun Sharma for 30 years which will cost about 40,000 per year.

■ The disposable surplus of 11.20 lakh can be invested in the following manner every year for the next 25 years:

■ Investments may be carried out in a systematic investment plan of balanced ( equity and debt) of 50,000 per month over the next 25 years. This shall help create a corpus of 1.5 crore at cost (` 4.72 crore in value terms if growth is aimed at eight per cent a year). This will help him to plan for his children’s marriage and his retirement.

■ A sum of 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 70.6 lakh. This money can be placed in a debt fund from the age of 55- 70 years and systematically withdrawn for later on needs in life. In between the term , if required funds can be partially withdrawn for childrens higher education expenses.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 1 25 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 each of the spouse.