WHAT IS RETIREMENT PLANNING- A PROPER MUTUAL FUND IDEAL!

The well-known, Bill Gates had analyzed that most people always overestimate what they will be able to do in one year and underestimate what they will be able to do in 10 years. With the urgency of the word ‘now’, we always tend to leave out our retirement planning for the last few crucial years of life. However, it must be understood that retirement is like taking part in a marathon, the investors who end up taking the right steps in the changing path always reach the finishing line effortlessly. For securing a decent amount for your retirement, there is the definite need to make the right adjustments in the early stages by maintaining the perfect portfolio.

With the lack of a fixed source of income, many retirees always look for options that could be supporting their medical needs and daily requirements, and their financial security in general. There are senior citizen savings schemes, and insurance policies and also pension plans, bank fixed deposits which are basically several options that can assure you a satisfying retirement. However, we must understand that a mutual fund is such option that always fulfills the customary retirement needs and ends up providing a source of regular income with a systematic withdrawal plan.

There are also ample benefits of investing in mutual funds, the importance of which can be portrayed in the two crucial phases of retirement planning – accumulation and distribution.

Accumulation

This happens to be a period where we earn and simply gather the amount that we’ll need for our post-retirement life. There is a list of prudent strategies which includes the investment of your saved money in the right assets. Also, mutual funds always provide a culturally acclaimed and vividly versatile portfolio to gather a rather handsome amount till wereach our distribution phase. The compounded returns of mutual funds will make ussatisfied when we watch our money grow in multiples. Also, mutual funds are categorized to be under 5 major categories, out of which the topics being equity, debt, and hybrid are the basic and broad ones. It also offers a retirement plan under their solution-oriented funds, as per the SEBI’s new categorization rule.

Distribution

The distribution is a phase that begins after retirement and simply calls for the distribution of the money invested as and when needed.

Consider mutual funds’ past performance

Previous performance is undoubtedly an important parameter for measuring the growth of a fund, but critics always suggest that only considering the consistency of past returns over a period of 10 years is legitimate for investing in any scheme.

Apart from the continuous performance, proper funding management and efficiency of the asset management company are significant factors that must always be kept in mind. Since there are mutual funds that are subject to market risks, all that needs to be done is to choose a scheme that is based on our investment ideas, horizon expansion, and risk management profile.

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