Planning is vital for anyone whether it’s for education, marriage, a holiday or any other event. Till the time we have an inflow of income, we need not worry much about the financial assets of those plans. However, the need for having a regular source of income post retirement vanishes, keeping the expenses consistent.
Importance of retirement planning
Before you invest, there are questions you need to ask yourself. The number of years left for your retirement? The sum needed at retirement? Your ability to take risks? Your lifestyle and income needed to sustain it? Once these questions are answered, the further planning becomes simpler.
A good retirement portfolio must comprise of both stocks and bonds, along with a little cash. If you have been thinking about retirement, you certainly have a great deal of choices in the form of retirement product from mutual funds.
With regards to your retirement money, this world is brimming with alternatives that you could utilise. It’s up to you to analyse those options that offer appealing features like principal guarantees and also protect your money invested, the rest play a role in guaranteeing a specific rate of growth. Over these years, retirement planning merely meant investing in small saving schemes like the Public Provident Fund, the Employee Provident Fund and the National Savings Certificate Scheme. Later, mutual funds were introduced when UTI was launched, however; these were seldom utilised for retirement planning.
With time, things have changed.
How to invest?
One of the preferred ways of investing in a mutual fund is through a SIP (Systematic Investment Plan). Through SIP, you have the flexibility of investing every month with a bare minimum cost of Rs 500. This helps you to save for your retirement life without actually disturbing your present expenditure.
With a variety of mutual funds accessible to you, you just need to settle on the asset allocation and customising your combination of debt, equity, real estate and gold. When it comes to gold allocation, you could opt for different gold savings fund or ETFs, from the larger perspective of investing into real estate, you can select one from different real estate portfolios available under alternate investment category of funds.
For the ones who fall into the bracket of their mid-career where they need to focus on the
preservation phase of their retirement planning, it’s time for them to adopt an aggressive
approach. Along with preservation, there’s a need for regular income generation. In this case,
the most suitable option is to opt for Systematic withdrawal or dividend payout options where as
an investor you could instruct the mutual fund houses to start paying a fixed amount only once
the available units are sold.
There’s no secret to plan your financial future; instead, there’s a roadmap with peaks and valleys
where we need to get started. That’s right: Investing money – starting today is the best route to
follow for a financially secured retirement.
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