Many people prefer to retire when they are eligible for private or public pension benefits, though some are forced to retire when bodily conditions no longer permit the person to work any longer (by illness or accident) or as a result of legislation concerning their position.
Nowadays, most developed countries have schemes to provide pensions on retirement in old age, funded by employers of the company or the state. In many poor countries, there is no support for the elderly beyond that provided through the family. Nowadays, retirement with a pension is considered a right of the worker in many societies. In many western countries, this is a right represented in national constitutions.
The standard retirement age varies from country to country but it is typically between 50 and 70. In a few countries, this age is different for men and women.
Planning for retirement starts with a view about your retirement goals and how long you have to meet them. One needs to take due care in selecting a suitable retirement plan and is required to look at the different types of retirement accounts that can help you raise the money to fund your future. The plan should not only preserve capital but also offer inflation-indexed returns during retirement years. Mutual fund retirement plans are structured to deliver lump sum or annuity payouts and provide a wide range of products for retirement savings.
To invest in a mutual fund, KYC compliance is compulsory. The know your customer or know your client (KYC) guidelines in financial services demands that professionals make an effort to verify the identity, suitability, and risks involved with preserving a business relationship. KYC can be done beforehand or form and supporting documents can be presented at the time of investing. If the investor already has a folio with the fund house, the same can be used for fresh investment too. Investment can be made online as well as offline.
The next step is the choice of asset allocation. Asset allocation involves dividing an investment portfolio among various asset categories, The retirement fund offers a choice of different asset allocation from investing in equity to only fixed income instruments. The process of determining the mix of assets to hold in your portfolio is one’s own decision.
Taxation is another important factor that needs to be considered. Higher your total income, the higher the portion of your benefits that are taxed. Not more than 85 percent of the benefits are taxable, no matter how high the income is. Investments through notified retirement funds of mutual funds qualify for a deduction under Section 80C.
