Mutual Funds for an Effective Retirement Planning

The slow rate ofeconomic growth, high rate of inflation, lack of investment knowledge and other potent factors make it difficult to save money.  In this time, it demands that a person builds a strong retirement plan for themselves more than ever. Having a solid retirement plan is essential to lead a comfortable and financially independent lifestyle after retirement and that is why investing in a sound scheme is crucial for everyone.

The market is filled with numerous investment schemes; the key is to find a suitable investment product that generates high returns and lessens the burden of risk. Though many people prefer traditional investment schemes for retirement planning, they seldom prove effective against inflation. This is where mutual funds prove better in planning your retirement.

What makes mutual funds best for retirement planning?

The mutual funds are primarily a pool of funds that are deemed suitable to cater to the needs of the investors with varying risk profiles. There are numerous mutual fund schemes that are designed keeping in mind the scope of the investment horizon, level of risk tolerance and theamount of investment for different investors.

The following reasons pinpoint how mutual funds are the best for your retirement planning:

  • The mutual funds are designed keeping in mind the various investment needs of the people.
  • The mutual funds offer the investors the flexibility to invest in an array of bonds, stocks and different securities on the basis of their risk profile. When compared to the other investment tools, mutual funds are a more flexible option of investment.
  • The mutual funds do not put penalties on the investors in case of discontinuing investments, partial withdrawals and irregular behaviour.
  • In the long run, the capital gains on the equity funds are deemed tax free which means more revenue for building a retirement corpus.
  • The funds allow the investors to start with an investment in affordable schemes where they can invest a minimum sum. This encourages new and young investors to build a retirement plan over the years.
  • The feature of easy liquidity offers the vulnerable investors with the benefit of protecting themselves against financial risk and thus helps in protecting the funds they have saved aside for their retirement.
  • Depending on the risk profile of the investors, they can choose from among Equity funds that yield high returns, Debt funds that yield low returns and the Hybrid funds that yield moderate returns.
  • The mutual funds are the versatile and convenient option of wealth creation that is also among the least expensive investment tools when compared to most unit-linked structured products and insurance schemes.

Take into consideration the number of years left for your retirement, the fund you want to create over the years, your risk appetite, monthly income to sustain a comfortable lifestyle before selecting a scheme that can be deemed most suitable for your retirement planning.

Contact our financial experts and market analysts to help you select the best mutual funds for effective retirement planning.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not an indicator of future returns. Wealth Redefine is a AMFI registered Mutual Fund distributor – ARN - 167127

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