Due to better healthcare and progress in science, people are getting healthier and living longer. It would not be uncommon for people to live quite easily up to 85 years in the near future. Moreover the life span of fixed income paying jobs is on a decline. A reducing career span has resulted in a rise in entrepreneurship which means people would need an entrepreneurship corpus at some stage in their life.
Inflation also plays havoc all the time by decreasing the buying power of your money. Hence there has been never a greater need of building a voluntary retirement corpus for overcoming the difficulties of post retirement period than today.
If one assumes an average career start age of 25yrs and an average retirement to catch up by the age of 55, then it means one has to work for 30 years and have to fend for 30 years on its own without any regular source of income. This is the ‘30-30 CHALLENGE’ that has to be surmounted.
It is vital to brace up to meet this challenge and avoid the throes of "old age poverty". There has never been a greater need for building a voluntary retirement corpus than now
Retirement Savings Fund is a carefully structured suite of plans designed to meet the investment needs of investors planning for retirement. It works as a retirement solution by offering choice of asset allocation to investors based on their life stage and risk preference.
Ideal for Investors:
Hence, to meet the "30-30" challenge and to avoid falling in to the "old age poverty" trap, it is advisable to start your retirement planning with Mutual Funds.
Investing in mutual funds can be tricky. Once you’ve decided between debt and equity, you have to choose between a systematic investment plan (SIP) or lump sum investment. While lump sum purchase of mutual funds seems attractive if you have a passion for tracking indices and funds, a SIP can earn more over time.
With a SIP, you invest a fixed amount regularly so it accumulates over a period of time. If you have a long-term goal, investing in an equity SIP will help your money compound over the years.
You can take advantage of time until your retirement
Building a retirement corpus requires investment discipline. A SIP in an equity mutual fund held for several years will help you build a tax-free, inflation-adjusted portfolio.
For most people, retirement will be the goal that takes the longest time to reach. Yet it’s the one we delay most often.
A SIP helps you stick to the “save first, spend later” mantra, since you invest the same amount at regular intervals, often through an automated withdrawal from your bank account. This reduces the pressure to invest your remaining disposable income after spending your salary on necessities.
If you start planning early enough, you’ll have a few decades to watch your investments grow. Because you have a long time until retirement, your money has time to rebound from any downturns.
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