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Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
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Most people delay retirement planning, thinking they have ample time to plan for retirement and create a retirement fund. Only when nearing retirement do people realise their mistake of not working earlier on the retirement plans and end up disrupting their financial freedom.

Retirement planning is something that should be started as early as in the late ’20s or at least by the early ’30s. In the case of long-term plans like retirement, the real rate of return depends on multiple financial factors such as inflation, interest rates, rising medical costs, etc.

Industry experts say, one of the most important attributes of wealth creation is the return on investment. This is where mutual funds play a big role, by offering exposure to various classes and subclasses of assets, which enable one to get greater returns on his/her investments.

Get started with SIP
While investing in Mutual fund Systematic Investment Plans (SIP) is the ideal way to go. SIPs in equity mutual fund scheme is known to average the cost of one’s purchase (Rupee Cost Averaging) by taking advantage of the volatility of the stock market. One can easily invest in MF schemes through SIP, completely based on his/her need along with their risk appetite. Ankit Agarwal, MD, Alankit says, “The right way of investing is to diversify some (around 10-15 per cent) portions into highly rated diversified blue-chip funds. This strategy will also help provide a better ‘Tax adjusted real rate of returns’”.

Having said so, experts say it should always be kept in mind to maintain a balance between one’s current expenses and savings. Additionally, when nearing retirement it is highly recommended to get such investments invested and parked into short-term debt funds just to protect them from any financial loss that might be caused due to other external financial factors.

Make SWP work for you
Mutual Funds are another investment option that could be used in providing regular income after retirement. The benefits of mutual funds for retirement planning is to use the SWP (Systematic Withdrawal Plan). It allows an investor to withdraw an amount from their investments periodically. With SWP, investors can withdraw a predetermined amount every month at fixed intervals.

A Systematic Withdrawal Plan is kind of opposite to a Systematic Investment Plan. In SIP, the investor decides the amount and date on which the money is debited from his/her account and transferred to the mutual fund. With SWP, a predetermined amount is debited from the investor mutual fund and transferred to his/her bank account. Hence, experts say, SWP may be considered by anyone who seeks regular income, be it a retired individual or someone who is planning to start his/her own business or simply anyone who seeks regular income through their MF investments.
Each one of us has individual financial needs. Some are more complex than others. But regardless of your situation, achieving financial success requires careful planning of your finances and expert guidance to meet your goals and objectives.

Let’s look at this five-point checklist to help you set your future goals and build a unique plan for your financial freedom and security.

Goal setting
Your financial goals are targets that you wish to achieve over a specified period. It could be any dreams or plans that you have set for yourself or your family. For example, if you have a growing family, you will have a goal to buying a new home. Similarly, there are short-term goals that you may want to reach within a year, such as buy a new computer or go on a family vacation. Likewise, mid-term financial goals include financial targets that could take anywhere between 5 and 7 years to achieve. Long-term financial aims are those that take longer to accomplish. These include saving for your child’s education and saving for your own retirement.

In order to set your financial goals you need to:
# Know what matters to you.
# Sort out what you want to achieve in the short, mid and long term.
# Ensure your goals are SMART— Specific, Measurable, Achievable, Relevant and Timely.
# Set or know the value of your goals and know how much you can keep aside to achieve those goals.
# Set your priorities.
# Establish a realistic budget to know what’s coming in and going out of your bank account and use it to plug financial leakages.
# Keep monitoring the progress and ensure you are hitting benchmarks.

Asset Allocation
Now that you’ve set your goals, you need to achieve the right investment mix for a balanced portfolio. Regarded as one of the most important choices you can make, asset allocation shows you how much of your portfolio must be in income-producing investments and how much in growth-oriented investments.

Mutual Funds (Equity): High Risk, High Return, Debt: Low Risk, Real estate: Low Risk, Gold: Low Risk Low Return.

Consider asset allocation as the fundamentals of portfolio design. There is no cookie-cutter approach or a perfect mix of assets that would apply to an individual strategy. Hence, when building the right asset allocation for your needs, consider the following key elements carefully:

# Objectives. What is it that you are hoping to achieve using your investments? Are you looking to achieve capital growth, fund a specific financial objective such as college education or pay down debt?
# Risk tolerance. What is your comfort level with market volatility? Can you take in losses without panicking? Are you an aggressive investor willing to ride through the ups and downs of the market? When evaluating your risk appetite, take into account inflation and interest risks as well.
# Time horizon. What is the length of time that you’re willing to commit to achieving your objectives?
# Investment preferences. Do you have favorites among asset classes? Understand the features and characteristics of every asset class, their pros and cons, risks and rewards and your interest in them before investing.
# Taxation. When you mix in a wide range of asset classes, it could have varying tax consequences. Remember to be mindful of them and factor in the taxes at the time of redemption. When building a sound asset allocation strategy, remember to include periodic reviews as well. For instance, a shift in financial markets could change your financial situation. And with periodic gains and losses, your portfolio may require adjustments. As you go through your life stages, adjust your asset allocation strategy based on your requirements, preferences, risk tolerance and priorities.

A good financial plan will provide for adequate Life, Health and Personal Accident Insurance, the lack of which can cause much turmoil. That’s because, in the event of your untimely demise, your family members, without your support and income, may be unable to meet the various financial goals you’ve set for them. For instance, your spouse’s retirement, children’s college funding, home ownership and any other plans you’ve laid down for your family could get hampered. Similarly, if you are not prepared for any medical emergencies with adequate health insurance for you and your family members any such incidents can severely dent your finances. In such incidents you could be forced to withdraw from your investments which you had reserved for your future goals. When looking at an insurance plan, consider the following factors to choose the appropriate insurance plan and cover.

  • Age
  • Debt
  • Family situation
  • Financial goals
  • Savings rate
  • Other financial obligations
Having adequate insurance cover will grant you peace of mind and assurance to your loved ones even if you are no longer around to support them. Insurance planning is an essential part of a sound financial plan and can meet many life goals in your absence.

Tax Planning

When investing for your goals, there is a good reason to monitor the progress of your investments. But in addition to selecting the right investments and asset allocation, you also need to consider taxes and other costs. Every financial decision you make has tax outcomes, and hence planning your taxes can help you avoid potential actions that could eat into your returns. When looking into tax planning:

# Find out your taxable income and tax bracket.
# Take optimal use of tax deductions that you qualify for.
# Select suitable tax-efficient investments.
# Selling or holding specific assets could impact your short-term capital gains and long-term capital gains.
# Understand how to calculate your cost basis — the amount you pay for an investment in terms of brokerage fees and other charges.
# When withdrawing from your investments, ensure they are tax-efficient.
# Look for ways to transfer all gift assets to your heirs in tax-efficient ways.
A good financial plan with efficient tax planning encompasses various considerations, including when you invest, receive returns, purchase, spend, the type of investments you select, your income filing status and other deductions. When planning for your taxes, split them into three sections:

  • Invest in tax saving instruments
  • Find your tax payments
  • Know your income tax returns

Retirement Planning
When planning for your retirement, you need to start as soon as possible. When charting an effective retirement for your future, there are specific ingredients you need to look at to put yourself on the path to success. For instance:

# Find out new expenses you may have to incur once you retire, such as healthcare expenses, lifestyle costs.
# Look into those expenses that you can forget about, such as commuting to work, loan payments etc.
# Establish your retirement budget by calculating your retirement expenses.
# Figure out your revenue in retirement either through multiple or single income sources.

Planning for a financially comfortable retirement must be an ongoing process in your working years. And the sooner you begin, the better. Look into your plan at least once a year to understand whether you’re on track to achieve your goals. If required, make necessary adjustments.

It can be complex to navigate the world of finances but when you do it, you don’t have to do it alone. A professionally-qualified financial advisor can help you with your financial plan by providing right guidance and advise from his experience and expertise to overcome such complexities. They can guide you in identifying the right financial products and services to meet your goals and that suits your lifestyle.

To enhance your financial security and know how to find the right financial solutions it is best to consult an experienced financial advisor/ professional.

Mutual Funds recently have acclaimed the tag of emerging asset classes to build funds for several financial objectives or aims, one of them being retirement. More people are opting to invest in mutual funds, be it for their short term or long term goals.

Thoughtful planning paired with farsighted investment in mutual funds can help an investor to build a sizeable corpus, be it for any near financial goals or retirement.

While investing in mutual funds, there are several factors that come into play, such as risk capacity of the investor, investment horizon, liquidity requirements, tax implications, existing assets and liability evaluation, etc.

Here are certain things one should keep a note of while investing in equity mutual funds.

Investment Objective –  An investor’s choice to invest in any particular mutual fund scheme, experts say must be considered by scrutinizing the relevance of the scheme as per the requirement of the person opting for it. The investment objective becomes the deciding factor for the level and type of returns in the fund as well as the risk involved.

Units – The units derived from the amount invested in mutual funds represent the investor’s holding individually. While liquidating the fund, based on the number of units held by the investor and the current NAV, the total value is calculated.

Net Assets – The assets of a mutual fund scheme means the current value of the portfolio of securities held by it. There may be few current assets such as cash and receivables that together form the scheme’s total assets.

Net Asset Value (NAV) – The NAV is the method or process by which the net asset per unit of a scheme is calculated as net assets/number of outstanding units of the scheme is the NAV. The NAV of the scheme is considered to change with every change in the net assets of the scheme.

Mark to Market – The current value of the portfolio forms the base of the net assets of the scheme and therefore the NAV. For instance, if the portfolio was to be liquidated, this would be the value realised and distributed to the investors.

It is a very simple process to build a retirement corpus and portfolio with equity mutual funds and starting at the earliest is highly recommended. It will give an investor ample time for their money to sink in roots and grow, along with helping them figure out the right path to pursue financially in case they need to modify or change things in the mutual funds.

It is important to have funds only for the maximum period of 3-4 years to monitor one’s portfolio while concentrating on returns.

Life Insurance plans come with their own set of benefits that can differ from each insurance provider, but all of them offer a protective cover for your family.  So, what is life insurance and how do you pick one that is most suitable for you? Let’s find out.

Types of Life Insurance Plans for Your Family
Life insurance plans provide a multitude of coverage. Some offer basic insurance coverage, while the more targeted ones can give you additional advantages like pensions, survival benefits, etc. Let’s take a look at the best types of life insurance plans for your family:

Pension Policies
As the name suggests, a pension policy is primarily for securing your financial future after you retire. This ensures that even when you retire, you can support your family financially, and can stay afloat on your own.   

Pension policies provide a monthly income based on the premiums paid, and ensure a quality life after your hay days of working. Your family can even avail the pension benefits after you pass away based on who you name as the policy’s beneficiary.

Joint Life Insurance Policy
This is one of the most preferred life insurance plans if you’re looking to invest in one for the sole purpose of your family. Under this type of policy, a couple can take a policy together. They do it under a single contract and ensure that you and your partner can stay financially secure in the event of one passing away.  

Money Back Policy
These policies are the best ones if you want regular returns out of the scheme, and still, be sure that your family will get the full sum assured amount once you pass away. This scheme offers regular payments to the policyholder at defined intervals, which gives it its name “Money Back”. However, in the event of the policyholder’s death, while the policy is still in effect, the family gets the entire assured amount even when you might have received returns previously.

Pick The Best Suited Insurance Plan Now
Now that you’re aware of what is life insurance and the various types of life insurance plans for your family, you can pick the best-suited one out that serves your needs. Be careful and assess each insurance provider’s scheme before picking one, so that you can get the policy with the best coverage and returns.
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.