Mutual Fund

Mutual fund is a collective investment vehicle where resources of number of unit holders are pooled and invested as per the objectives disclosed in the offer document. A mutual fund is set up as a trust which supervises the function of Asset Management Company (AMC) which manages the investments collected in the mutual fund schemes.

Its advantages are

Professional Mnagement

Regulated Operation

Higher returns

Transparency

Liquidity

Tax benefits

Flexibility

Why Retirement Planning?

There is a need for retirement planning because the financial situation in the country has changed in the last few years in such a manner that it will be difficult for one to maintain a decent standard of living with the current means. This requires retirement planning and in addition, there are also several individual specific factors that will affect the process such as

It is need because:-

Longer life span

No fixed return

Falling rates on fixed return options

Inflation

Abolition of joint family system

Rising medical expenses

Rising standard of living

Positive mental state

Early retirement

Non-economic objectives

Leisure

Coping with family –health problems

World situation

 

Retirement Planning is the process of undertaking financial planning to provide after one retires from work. This means a process of saving and building up a corpus that is invested in various asset classes that will result in income and earnings for the individual over a period of time.

This income will take care of the fall in receipts as one ceases to work on a full time basis after taking retirement. Retirement Planning is meant to provide income during old age because with several people, the time period after retiring from work is the period of need.

In normal circumstances, a person who is receiving say Rs.35000 per month at the time of his employment in a particular place will cease to receive these fund when he retires. However, the need for money due to the various expenses and requirements in life doesn’t cease when one stops working and there will have to be some receipts to replace the earlier income. Planning for it in such a manner that there is a smooth roll over by raising the required revenue will constitute Retirement Planning.

Everyone will have to undertake undertake retirement planning in the days ahead as this will be a solution to a lot of social problems facing the people. This is one area of planning that deserves a closer look and hence, everyone should be looking at effective ways to plan well in order to enjoy life after the hard work put in during the best years of their life.