How to safeguard your Retirement Corpus - II

[Deepa Nittala]

Hi , 

Last time I had written about the various conventional products used by retirees . I had received some suggestions, to simplify them further and make things simpler to understand in layman terminology in this particular context.

I felt the best way to simplify was to take a case study mode, explain in the form of numbers , which will make things easier to understand . 

The crux is that the conventional products + pension + annuities are all taxed on bracket . Sometimes there is an option to use some of them flexibly to change the tax bracket , and sometimes, you can use more tax efficient options.In short : 

• In conventional products, the complete interest received is treated as income , and taxed.
  
• reverse mortgage is treated as loan and not taxed.
  
• In Debt mutual funds with Systematic withdrawal plan, each monthly credit is treated as a combination of principal + gain , only the gain is subject to tax and therefore , the tax implication is reduced drastically. Using debt funds makes the investment safer and stable , and does not change the risk nature at all. How ? Check out the attached sheet. 

This is only an attempt to simplify things from a telescopic view. It is not a customized solution as such . Customization and exclusive solutions are possible when dealing with individuals only. This is only an attempt to create awareness on available options and their tax implications .Everyone may have one or Retirees in family . This will help them.

Attached a copy of earlier write up and the case study sheet. Feel free to write to my individual i.d  deepan...@gmail.com or call 9849620066 for any clarification or a feedback for correction .

Trust this attempt helps .

Thanks

Best regards

Deepa