6 most fruitful retirement toolsMay 11, 2023
We all want to lead a happy retired life with a secure financial future and well-planned retirement investments. To accomplish this, it is also important to understand and explore the various available investment alternatives which can be beneficial to you. Here’s a list of six such fruitful retirement tools.
It’s a misnomer that the Pension Plans are to be taken by an Insurance Company. Pensions Plans are nothing but systematic withdrawal of money from the accumulated retirement corpus. The Pension Plans can be created on your own by investing in various asset classes, let them grow till your retirement and then withdraw it systematically. Hence, one option can be to invest in Mutual Fund systematically via Systematic Investment Plan (SIP) and withdraw it post your retirement via Systematic Withdrawal Plan (SWP). Insurance companies invest some of your component for your life insurance too. Hence, it may be noted as a thumb rule that take insurance only for insurance purpose and not for investments.
Employee Provident Funds
The Employee Provident Funds or EPFs are one of the most popular retirement saving tools in India. It is introduced by an employer for the employee benefit. With a little greater reliability on the employer and more transparency on the where one’s money is, this is one of the most preferred retirement investment tools used all over the country. People usually prefer staying invested in the EPF scheme by opting for EPF transfers while switching jobs. This ensures that you reap the benefits of guaranteed returns along with compounding for retirement.
While there is still some amount of scepticism and hesitance towards investing in equities, it is one of the highest value returning investments. While equity-related mutual funds offer an option of monthly SIPs, they also give you the flexibility to switch funds for better products and profitable returns. Another added benefit that tags along is that these investments are often made in a long term perspective hence keeping you on track with retirement goals and objectives.
Liquid Funds While you take retirement into consideration, you might want to make provisions for keeping aside some funds for an emergency or other financially draining situations. Liquid Funds provided by almost all the Mutual Fund houses prove as reliable tools to back on. Liquid Fund’s underlying asset are debt products which are relatively much less riskier than any other Equity product. In order to ensure that the amount invested in these tools also give out decent returns, one can opt for Debt Products of varying tenures. This investment is not only safely convenient but also tax efficient.
Monthly Income Schemes
Similar to the Pension Plans are other Monthly Income Schemes (MIS) which ensure you a regular income during the post-retirement phase. Various mutual fund companies provide these in the form of funds while other government or public sector run organizations like the Post Office too provides it with other varied investment and return schedules.
While seeking help from a financial advisor is not literally a financial tool for retirement investments, it is still surely nothing less than a reliable and profitable instrument to lead a secure retired life. To understand the best-suited investment for your personal future plans and available savings, seeking advice from a professional advisor is the best way to achieve and maintain a happy retired life.