Skip to main content

How to Plan for Retirement

Best SIP Funds Online 


While retiring rich and early is everyone's dream, only a handful are lucky enough. By developing a retirement plan and investing early in one's working life, retirement can be financially stress-free. A retirement goal should be based on three assumptions: The age at which one expects to retire; the lifestyle one hopes to support; and a longer lifespan than previous generations, given the increased lifespan of today's retirees. So it is very important to define a goal, make a plan and invest for the long run. This requires a focus on both saving and investing. Balancing personal risk tolerance with a longer investment horizon is essential to make informed asset allocation decisions for a retirement goal. At any risk level, diversification is key, as it can help to maximise returns for a given level of volatility.

Retirement investments
The foremost challenge is to make inflation-proof investments since rising prices will erode the value of money. When you are planning your retirement, you must factor in inflation. And to make the best of your investments and yet limit your risks, retirement planning must be a continuous process with an appropriate asset allocation strategy comprising equities, debt, gold, real estate and even alternative investments. Risks from volatile markets and fluctuating interest rates are the two most important dampeners for retirement corpus and, many a time, the corpus one wishes to have on retirement may not be achieved with the planned savings. The earlier you recognise this shortfall, the better it is, as it will help you to reach the goal more efficiently.

Save during working life
After the accumulation period ends with the completion of one's earning phase, chalking out the annuity income and regular cash flows is the next milestone. During the accumulation period, regularly review and re-balance portfolios to meet the needs of retired life. With some deft planning, it will not be difficult to plan and rejig investments which earn steady income. Most Indians prefer to invest in instruments like insurance and fixed deposits to build a retirement corpus.

Always invest a part of your savings in equity-related instruments for higher long-term returns. Equity investments, either through stocks or mutual funds, are ideal over the long term, and the returns are higher than what is earned through typical retirement avenues like provident fund and fixed deposits. When you near retirement, you can gradually de-risk to debt instruments. Even post-retirement, you can consider investing partially in equity or balanced mutual funds, after analysing your risk tolerance.

Understand cash flows
If you don't know what your annual expenses, debts and estimated taxes are going to be after retirement, it is impossible to figure out if you have accumulated enough assets to sustain your needs throughout retirement. Maintain an actual statement of expenses for the last few months before retirement to calculate average monthly expenses. You need to figure out how much you will need to withdraw in the first five years of retirement.

Then start to shift that money into more conservative investments to make sure that you will have that five-year runway. Ensure that your portfolio is not too aggressive as market fluctuation can wipe out significant part of your investments, especially if you need cash urgently. You need to invest some part of your money in capital growth asset class but it is important that you need to have adequate liquid cash to lead your new lifestyle. Your asset allocation should be such that it provides you a regular income.

Monitor and re-balance
An individual must monitor progress of the portfolio and revisit the plan at least once a year to factor in significant market moves or life changes. Modifying a plan according to circumstances will help build retirement wealth. With some deft planning, it won't be difficult to plan and rejig investments that earn steady income and counter inflation. One should invest in products that one understands. Re-balancing portfolios ensures that the investments do not over-emphasise on any particular asset category. Selling investments from over-weighted categories and using the money to invest fresh in under-weighted categories will help reap profit and escape longevity risk.



SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now