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Why Mutual Fund Investment is a good option to start Retirement Planning?

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Delaying your decision for planning your retirement could spoil your future financial condition if it is delayed for a longer time interval. It is always recommended by financial advisors to start your saving for your coming golden years in early ages only because to live financially strong after your retirement. Ideally, one should begin his retirement planning in 20s when he starts working but if you already have some family responsibilities in your shoulder then you can delay it for up-to 5 years. Although beginning your retirement plan after 30s will give less output to you than 20s plan when you’ll get retired.

Mutual Fund Companies offer different special plans for retirement after matching a certain percentage of the mutual fund buyer’s investment into these plans. Early investment on a specific retirement plan always ensures better life after retirement. For example, if a person starts his retirement planning at 25 and save 15% of his annual income, he will become financially independent at age 65. But if any person starts his retirement planning at 35 then despite of saving 30% annual income, he will be able to reach financial independence state after crossing age 65. That is why, it is better to start planning for your retirement as soon as you start working as it will never make you realize such investment for future as a burden.

Reasons to Investment in Mutual funds for Retirement Planning:

No need to buy annuity:- For starting investment on retirement, Equity funds investments are the most appropriate option. In fact, investment in equity funds ensures good fiscal management and high economic growth. The main advantage of investment in equity funds is that investor doesn’t need to buy an annuity which usually one need to buy in pension plans and NPS.

Give more equity exposure: Mutual funds are more tax efficient than other available retirement plans and investor has provision to opt for a systematic withdrawal plan to meet the requirement of regular cash flow. After buying a retirement plan through mutual fund investment, an investor can freely take a 100% equity exposure which is usually restricted to only 50% in NPS and other retirement plans.

Offers greater liquidity:- Mutual funds based retirement plans offers more liquidity to the investor compared to NPS and retirement plans of insurance companies. Investor here has the complete authority to withdraw his accumulated entity after the completion of minimum lock-in period.

Gives Instant Diversification:- Mutual funds based retirement plans gives instant diversification by pooling your money with investments of other investors. There is very low risk of your money being wiped out by any single bad debt which usually happens in plans offered by mutual funds companies.

Starting your retirement plan at early stage is a challenging but it also protects you from the challenges of old age poverty. Early retirement plan is a wise decision and for any assistance, you can freely contact your financial advisor to make this opportunity more lucrative.




Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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