Choosing the best retirement fund in India- Some handy pointers for you

Wish to choose the right retirement fund in India? You should closely analyze various kinds of mutual funds as part of your financial planning for the future. Selecting the best retirement benefit plan in Indiais highly imperative for building a safety net and solid corpus for the future. As a result, you should choose a mutual fund that matches your appetite for risk, helps you stick to a disciplined plan for investments via SIPs (systematic investment plans) and comes with ample tax efficiency and stellar returns.

Retirement saving in India with mutual funds

There are various funds that you can integrate into your strategy for retirement planning in India. Most retirement investment in Indiaplans encompass pension schemes but mutual funds are no less in terms of returns while enabling exposure to equity and lowering risks through portfolio diversification at the same time. You should ideally have an investment period of 20 years or 30 years and should invest every month through SIPs for benefiting from the power of compounding and stellar returns.

SIPs will help you invest fixed amounts for mutual funds each month and they have no upper limits in terms of the maximum amount that you can deploy. However, you should fix an amount that you can easily manage to invest each month. Along with creating a disciplined financial pattern amongst investors, SIPs will help you manage your money better and plan suitably for retirement in the future. Systematic transfer plans are often considered the best options for a retirement fund in India while you can also go for ELSS or tax saving mutual funds that come with deductions under Section 80C.

Systematic transfer plans help you easily shift between debt and equity based financial instruments, thereby enabling lower exposure to risks with the passage of time. Via ELSS, you can actually save on taxes annually. Mutual funds come with greater flexibility, i.e. they do not have restrictions on complete/partial withdrawal and you may stop investing at any point of time or change to another fund whenever you wish. Most mutual funds offer greater tax efficiency in comparison to regular pension schemes. The income from pension will be added to your income for taxes without exceptions while equity mutual funds will have long term capital gains being tax free till Rs. 1 lakh. Debt funds will have this imposed post indexation which majorly lowers tax liabilities as well. Mutual funds also offer more transparency since you can easily track fund performance and overall returns. This helps you assess how your investment is actually doing and take steps whenever required to set things in order.

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