Include Mutual funds in your Financial Plans.

[raaman]

Include Mutual funds in your Financial Plans.

Retirees usually invest their savings and investments in the bank's FD, PPF, gold, real estate, insurance, and other retirement schemes. During medical or other emergencies, this can cause unnecessary stress. These make it easy to withdraw money from mutual funds, offer excellent returns after tax, and provide easy cash withdrawals.

Many retirees, stay away for fear of fluctuations in the returns of mutual funds. Retirees can opt for a Systematic Withdrawal Scheme or SWP by investing a portion of their pension in debt mutual funds. Such investments will help them to earn a regular return. Debt funds are a bit safer than equity funds.

This is because they are invested in bonds issued by banks, companies, government agencies and money market based documents (bank CD, treasury bills, commercial paper). Compared to the bank's FDs, the SWP (Systematic Withdrawal Scheme) of debt funds will provide higher tax returns.

Income from FD / Pension schemes is taxed at a higher rate as compared to withdrawals under SWP (Systematic Withdrawal Scheme). Unlike in a retirement plan, you can easily suspend SWP (Systematic Withdrawal Scheme) or change the amount deducted from it at any time as per your requirement. Retirees, therefore, may include mutual funds in their financial plans.

 

[sincerem]

I really don't know how mutual funding works here in my country, even their is one I still doubt their transparency. The only investment I've found wanting and have consistently invested in is 'crypto currency. I am convincing how crypto operates, if I learn about how mutual funding operates with clearer understanding, I wouldn't hide away from investing into it.

Even crypto is an investment for everyone, civil servants, freelancers, offline and online entrepreneurs etc. Simply invest what you can afford to risk and watch your investment grow with time. I see crypto, stocks, as investment that transforms lives promoted it's of long term investment with funds you can afford to risk.

 

[Suba]

I don't understand what your complaint is and what you want to ask about mutual funds. But if you invest in mutual funds, your money will be managed by a third party, namely an investment manager, so investors cannot choose the desired investment, very different if you choose stock investments. In general, money market mutual funds are loans like bonds, with a maturity of about a year, minimal risk and liquid. Of course it will be very different if you choose to invest in stock mutual funds.