Where to Invest for Retirement?

It is important for you to invest your savings in a way that they turn to be fruitful to you than being futile when you enter your golden days.

Retirement Planning should not be neglected and it is important to take serious measures to plan for your nest egg when the paid work ends. It is always advisable to start investing as early as possible in order to secure the life of your loved ones and yourself after retirement.

As you begin saving early, the magic of compounding works in your favor. You cannot solely depend on the pension that you get. You need to have some good money flowing regularly in your account in order to keep you smiling.

There are a number of investment options available in the market but it is up to you to choose wisely from the bouquet of investment plans. Your choice would surely be affected by your spending habits, your lifestyle of today and the one you wish to maintain after your retirement, your risk taking ability, the time that you have in hand before your paid work ends etc.

Investment Options for Retirement

Have a look at few of the investment options that can guide you in building a diversified portfolio for yourself. 

• Equities – If you are the one who has started off early with your retirement planning then you can opt for equities. Investment in equities provides you with long term capital gains. If you create a diversified portfolio while you opt for equities you are bound to grow your money in the long run.

• Fixed Deposits – If you are the one who wants to play very safe and are close to your retirement year then investing in fixed deposits can be a good option. You can include fixed deposits in your portfolio as they give you attractive returns especially to those who fall under lower tax bracket. 

• Mutual Funds – You can always go in for mutual funds that are available with different paying options and risk factors. You can choose funds as per your requirements keeping in mind the risk that you can take, frequency of returns and the amount that you can pay. 

• Insurance – There are a wide variety of insurance schemes available in the market. You do not have to become a party to all of them but yes few are surely advisable. Medical Insurances, life time covers and Pension Plans can form a part of your portfolio as in the long run they prove to be very beneficial and help you remain secured. 

• Employee Provident Funds (EPF) – If you are a salaried individual then you cannot ignore the importance of EPF. If you pursue your job for long term, this forced saving can give you a good lump sum amount to be added to your capital gains. If you abide by certain prescribed conditions, EPF enjoys EEE status which says that it is tax deferred.  

• Public Provident Fund (PPF) – It serves as a retirement planning tool especially to those who will not be having a regular flow of income in form of pension after their retirement. If you wish to open one PPF account for yourself you can do that through an authorized post office anywhere within the country, State Bank of India and few branches of other nationalized banks. The first private bank that was given a green signal for opening PPF accounts was ICICI. Few other private sector banks also operate PPF accounts. You can invest a minimum Rs. 500 to maximum Rs. 1,00,000 in one financial year and can get the facilities such as loan, withdrawal and extension of account.. You can create fixed deposits and earn tax free returns every year. 

• National Pension Scheme (NPS) – The National Pension Scheme is another retirement planning tool that was introduced by Government of India in 2009.The minimum contribution is Rs. 6,000 per year. There is no limit on maximum contribution. Although, the maximum contribution through cash is Rs. 25,000 per transaction. You get tax benefits and can choose from six investment funds that are available as per your requirement. You must choose between active choice and auto-choice for distribution of his contribution. If active choice is selected, the subscriber must indicate the percentage distribution between corporate, gilt and equity. The maximum investment allowed in equity is 50%.

Planning your nest egg should not be delayed. The early you start the more sound financial grounds you can establish for yourself and your loved ones. Holding money in accounts would not solve the purpose. However that is also important but you should think of means as per your risk appetite and time that may lead to generation of wealth.

Apart from this you also need to lead a healthy nutritious life so that when you sit back on your rocking chair you only have a pleasant view.