Why are Balanced Funds Good For Retirement Planning?
A famous writer aptly quoted that, "Retirement may be an ending, a closing, but it is also a new beginning.” It is quite important for everyone to have a strong planning for their retirement goals. There are several expenses which are associated with your retired life that may be contingent or known to you. And to meet those expenses, you require money.
So do you have enough capital for your retirement to sustain a better life afterwards? If not, then you must begin planning for the same now.
Making plans for retirement needs better research and analysis of the market conditions, and they must be made keeping the risk factors in mind. As the money required at retired age has to be certain, we cannot take enough risk to accumulate such capital. Thus, the plans that we opt for retirement must be risk averse and provide stable and consistent growth of money.
Does Mutual Fund Have Solutions for Retirement Planning?
Mutual funds these days are becoming quite famous due to several benefits that they offer to the investors. Every investor has a different meaning of retirement as per their current financial status, their future expectations and expenses, and the sources of income. If you stay with your children, then you will not be required to spend money on household expenses and need earnings for personal use, and if you live alone, you will need money for every necessity.
Mutual funds have a solution for every type of investor. The balanced funds in India are considered to be the perfect option for the investors who are planning for their retirement. These are the funds which have investments in the equity and debt instruments simultaneously and provide the benefits of capital growth and financial stability with minimised risk factors. As we know that retirement planning needs such plans which have a minimum risk and dual benefits, the balanced mutual funds are the perfect solution for the investors.
Reasons to Choose Balanced Funds for Retirement
1. Dual Benefits: The major reason for which balanced funds are considered to be the best for retirement is the dual benefits that they offer. Along with appreciation in the capital with equity investments, they tend to provide regular income as well from the debt instruments.
2. Tax Efficient: The equity-oriented balanced funds which have minimum 65% of the asset allocation in the equities provide the tax benefit as well. The returns earned in the form of a dividend or other income is tax-free for the investors and thus help in reducing the tax liability.
3. Minimum Risk: Balanced funds are suitable for the investors who are risk averse and don’t want to get exposed to equities. The investments are in low- to medium-risk avenues that tend to generate income from the debt as well as equity securities simultaneously.
4. Increased Diversification: As the definition of the balanced fund explains that it invests the money in two different asset categories, i.e., equity and debt, the invested capital is well-diversified to gain the benefit of various investments altogether.
5. Portfolio Management by Experts: The mutual fund schemes are managed by the professional fund managers who have the expertise in designing the portfolio which offers greater returns to the investors. They make in-depth market research and then grab the best opportunity in the market.
So now you must have understood why investing in the balanced funds is beneficial for the investors. These plans are aimed at providing the benefits of both the worlds and thus they must be considered for retirement planning.
If you want to invest in the best retirement funds, then MySIPonline and its team shall provide you with the easiest platform and most convenient process to invest in the best recommended retirement funds in India.
LTCG Tax Is Not As Negative As it Seems; Here’s Why?47544 min read Jan 01, 1970
Sensex Plunges Over 1000 Points; Should You Buy or Hold Your Investments for Correction?46423 min read Jan 01, 1970
Sensex Dives Nearly 840 Points: Things to Consider and Experts’ Take47403 min read Jan 01, 1970
Budget 2018: Frequently Asked Questions(FAQs) Concerning LTCG Tax Proposal50195 min read Jan 01, 1970