The sole purpose of retirement planning is to be capable of maintaining one’s present lifestyle post their retirement and to attain financial independence. In order to satisfy their requisites post retirement, the average investors in India usually invest money into LIC policies, MIS, Fixed Deposits, Employee Provident Fund (EPF), and Public Provident Fund (PPF). However, as a result of the burgeoning healthcare costs, higher inflation rates, and increased life expectancy, such schemes possess the likelihood of failing to meet the retirement requirements. You now must be pondering as to what can be the apt investment alternative for retirement planning. Well, it’s mutual funds. Mutual funds, with their tax-efficient returns and low cost features and good returns are the ideal investment option for retirement planning.

Advantages of Mutual Funds

Tax efficient: Compared to a fair deal of the saving schemes, the Equity Mutual Funds are considered quite tax efficient. The dividends of such mutual funds are also tax free in the hands of the investor after deduction of Dividend Distribution Tax by the mutual Fund scheme.

Systematic Investment Plan: For retirement planning, SIPs are the best investment option. Unlike pension plans or PPF, SIPs don’t come with penalties and limitations on steady SIP withdrawals and payments. SIPs permit an investor to commence chalking out plans for their retirement early in their employment tenure. An early planning would render the investors with an increased scope for accumulating wealth through the Power of Compounding. To know the nitty-gritty details of how SIPs work, you can also seek the help of a mutual fund advisor.

Systematic Withdrawal Plan: The investors can also go for Systematic Withdrawal Plan to fulfill their monthly income requirements post retirement. SWPs sanction the investors to withdraw particular number of units on a consistent basis, such as monthly, quarterly, etc. It furnishes them with a steady income with tax efficiency and without evoking TDS.

The retirement planning advisory services in India have rendered the method of singling out on a retirement plan quite easier, thus laying out myriad possibilities for the investors to approach such bodies.