Plan Your Retirement- Beyond Provident Funds

Written on Friday, July 3, 2015
By Team - Bajaj Capital

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Retirement from regular income doesn't necessarily means you are in a position to retire from your accountabilities, whether towards your spouse, your family or yourself. The uncertainties will always be there throughout life. While money is not everything at a retirement age but it definitely adds a sense of stability in your life. As an investment service provider, Bajaj Capital always recommends that you should start investing as early as possible. There are several advantages of timely investment:

1. You have got all the time to take risks- If something unfavorable goes with your investment, you have enough time to recover and it would also make you vigilant with how you proceed for future investments.

2. Greater compound interest- Continuous reinvestment of your returns will result in exponential increase.

3. Improved spending habits- Being an early investor you would inculcate a habit of disciplined investment and when needed, you can easily cut down expenses.

4. Stay ahead- The early you start, the better your financial health will be.

5. Improved quality of life- Early investment reduces the risk that you might be forced to take in order to secure a stable retirement.

To generate a decent amount of retirement corpus we have been traditionally investing in PF schemes. But considering the inflation factor, it that enough? Presently, a good amount of account holders likely withdraw their savings before the retirement age due to numerous reasons such as marriage, child's education or even to suffice their other personal needs. In the latest development, government has proposed to cap the premature withdrawal limit to 75%. Here, we need to understand the logic behind this action. Primary purpose of this account is to provide social security in old age and hence, it should not be used as a bank account.
Now the question is how to fulfill the needs that are more likely to arise and can't be overlooked. The simple answer is better planning and investment in other schemes rightly designed to response such financial necessities. Before retirement you would need money for your child's education, for wedding, to buy a car or to build a house. Keeping in mind the goals (shot term & long term), Bajaj Capital recommends investors to build a portfolio with different mix of funds leading to different financial goals. Short-term goals can be easily achieved by fixed-income investment such as fixed deposits/company fixed deposits. To cater long term financial goals design a portfolio that has investments in equity mutual funds.
However, there are risks associated with these investments and to understand it better with regard to your needs, you can take help of different calculators available on our website or you can contact us for in-depth financial assessment so that our experts can help you create wealth.

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