Retirement Plans from Mutual Funds

In the US, retirement asset to GDP is nearly 80 per cent whereas in India, it is only about 15 per cent and therefore, the market is expected to grow faster in the years to come due to existence of large proportion of  of youth in the Indian population.


The first question may be how to plan for retiremnet? Most of the banks, insurance companies and mutual funds offer such planning facility on their websites. have a look at one such site.


The next question is about choosing your scheme. now a days, you have several options for planning the retirement kitty. the fixed income alternatioves are EPF and PPF of which EPF has become un-accessible to new employees. Then you have the insurance companies offering several shades of protection and income with deffered paymnets. Also one has the national pension plan that offers to build up your fund and makes your choice limited to 40% of the kitty and remaning as a compulsory annuity.


What makes Mutual Fund plans stand out in this segment is the freedom to select the kind of withdrawal from the plan during the golden age.


UTI entered Pension segment in 1994 with UTI Retirement Benefit Pension Plan and offers units without lock-in-period and no  exit load after three years. to qualify for pension, one should have remitted minimum of Rs10,000 by the age of 58.

Franklin India Pension Plan commenced in 1997 offers units with lock-in-period of three years and 3% exit load if comed out before age of 58.



Both of these schemes have one kind of a plan. To the existing line of these  two schemes, comes the Reliance Mutual Fund Pension Schemes with two alternative plans. one offering predominantly equity and the other predominantly debt.





Why pension plans from Mutual Funds ? One gets the tax benfits under Sec 80 C of IT Act 1961. later when you avail the pensions, the capital gains are tax free , the dividends are also tax free in the hands of the investor. And be sure to know protection as different from investing!


Happy Investing

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