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Mutual Fund Retirement Plans
Retirement or Pension plans offered by Mutual
Funds do not get as much of mention compared to the other retirement
planning solutions like PPF, life insurance pension plans etc. These
schemes are essentially hybrid mutual fund schemes, i.e. they have both
fixed income and equity allocations in their portfolios. Investors can
invest either in lump sum amounts or through systematic investment plans.
Investments in Mutual Fund pension plans, in most cases, qualify for
Section 80C benefits under Income Tax Act. Post retirement the investors
can withdraw their corpus on a lump sum basis or through systematic
withdrawal plan at a chosen frequency for their regular income
needs during retirement. The balance units post withdrawals in either
case remain invested and continue to grow in value.
Benefits of Mutual
Fund Retirement Plans
- With higher
allocation to equities, some mutual funds retirement plans can
generate superior returns in the long run compared to other products
like PPF, life insurance plans etc. However, various plans under the
National Pension Scheme can also generate returns comparable to, if
not better than, mutual fund retirement plans.
- Some Mutual
fund retirement solutions offer higher flexibility in terms of
asset allocation options
- Charges of
mutual fund pension plans are much lower compared to insurance
products. However, they are higher compared to NPS
Below is the performance of some
Retirement Plans
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