By Prashant Pimple, CIO Fixed Income, Baroda BNP Paribas Mutual Fund
With guaranteed pensions becoming scarce, especially for those working in private sector jobs and entrepreneurial businesses, the need for regular checks for retirement has never been more critical. A well-structured financial plan ensures that retirement remains a comfortable and safe phase rather than financial stress. Reports show that by 2050, men and women in India are expected to live for 75 years and 80 years respectively. This means your plan will need to provide senior income and margin to meet higher fees for medical emergencies and housing assistance, etc. within 15-20 years after you stop the regular salary check.
Given the post-retirement time involved, this cannot be kept to temporary plans, but requires a centralized approach. We try to break it down into steps of progress.
Step 1: Identify your regular income needs
Understanding and planning recurring expenses are the basis of a solid post-retirement income strategy. These fees can be classified as:
Essential monthly expenses: groceries, utilities, transportation, health care and insurance premiums.
Quarterly and annual fees: health checks, property taxes and insurance renewal.
Discretionary fees: hobbies, travel, entertainment and dining.
Periodic and caking needs: home renovation, car replacement, home function or medical emergency.
Traditionally speaking, your retirement requires less money because it assumes that you will have fewer needs after retirement. But today’s retirees have a higher desire to use the time they never had in their working days to realize their dreams. With smart investments that balance risks and returns, maintaining the lifestyle you want can be a breeze.
Traditional source of retirement income in India
For investors who want to prioritize guarantors, a mix of annuities can be given priority, plus a fixed deposit or a senior savings plan. However, please note that this option provides lower comparison returns and assumes the risk of reinvesting mature deposits at a price threatened by the principal that poses a significant threat.
Let’s look at how to use mutual fund programs to create your own regular and regular spending to meet your cash flow needs
A system’s withdrawal plan (SWP) can help you create your own custom salary checks while allowing your savings balance to continue making money for you.
SWP can also be used in debt mutual funds, arbitrage funds, multi-asset and mixed equity plans
The cumulative phase of retirement plans is about time and asset allocation. The earlier you start, the greater the chance of achieving your goals. A longer investment perspective can also allow you to invest in options that can get better returns, such as pure stock funds.
Step 2: Optimize retirement withdrawal during the deletion phase
Now that you have saved enough money, it’s time to enjoy the fruits of diligence. Knowing how to best withdraw your money is almost as important as how to invest. Following the following steps will help you construct effectively
Step 3: Tax withdrawal method
The following content can be considered –
Amazing withdrawals from Employee Provident Fund (EPF) and NPS may help expand tax benefits
Structure collection of equity from taxes Equity-oriented mutual funds effectively utilize lower capital gains taxes
Conclusion: Ensure your financial future
A well-structured retirement income plan ensures financial independence and security. By diversifying in fixed deposits, mutual funds, annuities and government-backed programs, retirees can create sustainable and inflated salaries.
