By Nivesh Gyan 18 JanuaryCategory: Retirement Planning
Future cannot be predicted but it can be planned! The very thought of retirement could be scary if the finances have not been planned right.
Is it possible to plan finances for the future when there would be no income but the same or even more expenses?
Actually, it can be way easier than what it looks like. One can be retired and still lead the same lifestyle without worrying about the money inflow. What is required is the right planning at the right time and understand that retirement planning is no more synonymous with the investment in pension funds only. In fact, with the emergence of lucrative mutual fund schemes, a whole new arena has opened for the investment in a vehicle that guarantees long term wealth creation while helping beat inflation.
The ideal time to start saving for retirement is as soon as one starts earning.
However, the self-employed ones are themselves responsible for building their retirement kitty; and this requires them to be pro-active and more disciplined in their financial planning.
The answers to these questions will make your investment journey smoother and worthwhile.
Now, the next question is where should one invest?
There are traditional options including Public Provident Fund (PPF), the National Saving Certificate Scheme, Employee Provident Fund (EPF) and even insurance policies. These options mostly come with a major drawback i.e. with the return of close to 8%, they in most of the cases neither beat inflation nor maximise wealth creation for retirement.
This is where mutual funds come into the picture which are low cost wealth creation options that beat inflation too.
|Less than 1 year||1-3 years||More than 3 years (LTCG)|
|Equity||15% Tax applicable||10% above ₹1,00,000 capital gains||10% above ₹1,00,000 capital gains|
|Debt||Based on Individual’s Tax Slab||Based on Individual’s Tax Slab||20% Tax applicable with benefit of indexation|
It can be safely said that if you can be disciplined in your investments in mutual funds, you can build a stress-free, tax-efficient and flexible financial future.