In today’s highly competitive job market, it isn’t easy to find a job after getting a graduate degree. People are completing post-graduate studies before they start working. This means that the average Indian worker is around 23 years of age when he enters the job market. He has 25 years to make enough money to last him for the rest of his life. By the time they turn 58, people are ready to retire. However, once retired, people still need money for their rent, maintenance, groceries, and the other basic necessities of life. The money we earn today, even if we save a majority of it, won’t be enough to keep us going through out retired years. One way in which people try to make enough money for their retired life is through investments. Start Planning Retirement Now.
Mutual funds are quickly gaining popularity in India, despite the Harshad Mehta scam of 1992. There are numerous funds available to all kinds of investors, and for those who are planning their retirement there are specific retirement funds available. Reliance MF has recently also entered this arena, joining companies like UTI MF and Franklin Templeton. The Reliance retirement fund invests 35{3813292df256cc7359db914c8bfffc508a0964aa786224d36d2cb21f4b33d600} or less in debt and money market securities, and 65{3813292df256cc7359db914c8bfffc508a0964aa786224d36d2cb21f4b33d600} in equities. The other two funds invest only 40{3813292df256cc7359db914c8bfffc508a0964aa786224d36d2cb21f4b33d600} in equities, and the rest of the money is put in fixed income instruments. The only drawback that the Reliance fund comes with is that if the investor chooses to withdraw from the fund before the age of 60, he or she will have to pay a 1{3813292df256cc7359db914c8bfffc508a0964aa786224d36d2cb21f4b33d600} exit fee, which can really cut into their retirement savings. It has a compulsory five-year lock in period, but as pension funds are long-term funds, this isn’t really a drawback.
The point of investing in these funds is to make your money work for you. The money invested will give you certain returns that will help tide you over from retirement to the end of your days. The working youth are being encouraged to start investing small amounts as soon as they start working. This ensures that by the time they reach retirement, they are financially secure. The Reliance pension fund gives more returns at a faster pace and is better suited for those already in their 50s. On the other hand, the UTI MF and Franklin Templeton pension funds are safer, and work a little slower. These funds are better for those in their 20s and 30s who have just started working, but are looking to secure their finances from the start. Before investing your money anywhere, always remember to read the fine print.
Nutella Bread Recipe: https://www.youtube.com/watch?v=8eHPkpCGdEY
Watch more How to Manage Your Money videos: http://www.howcast.com/videos/169336-How-to-Set-Up-a-Retirement-Savings-Account
It’s never too early — or too late — to start saving for your retirement.
Step 1: Know your rights
Realize that even if you are already contributing to your company’s 401(k) plan, you are free to establish an individual retirement account, or IRA, as well.
Step 2: Think about a Roth IRA
Weigh the advantages of a Roth IRA. Taxes are taken at the get-go so you can withdraw money tax-free in your golden years. You may remove money, penalty-free, before age 59.5 for certain reasons, like buying a home, you may keep your money in it as long as you like, and you may continue paying into it past age 70.5 if you have earned income.
Step 3: Consider an IRA
Consider a traditional IRA, which lets you defer paying taxes on the money you invest until you start withdrawing it at retirement. You can’t contribute to an IRA past your 70th birthday, and you must begin taking distributions six months after that.
Tip
To qualify for a Roth IRA, your modified adjusted gross income can’t exceed a certain amount. Check the Internal Revenue Service website (at “irs.gov”:http://irs.gov) for current limits.
Step 4: Investigate providers
Find an IRA provider to set up your account. Options include banks, brokerage houses, mutual fund companies, credit unions, and insurance companies. Banks and credit unions put money in CDs, insurance companies park your IRA dollars in annuities, and brokerage and mutual fund companies let you pick stocks, bonds, and funds.
Step 5: Ask about fees
Before picking an IRA provider, ask about fees and commissions.
Step 6: Diversify your investments
Diversify your investments so that you’re mixing stocks (both U.S. and foreign), bonds, real estate, and commodities. Check out the index funds offered at brokerage houses; they offer low-cost diversification.
Step 7: Learn about self-directed IRAs
If you’re financially savvy and want to be a real estate speculator or help finance a new business, consider opening a self-directed IRA, which allows you to grow your retirement fund in nontraditional ways. To open one, search online for “self-directed IRA custodians.”
Step 8: Make investing automatic
Make contributions to your IRA automatic by having them withdrawn from your bank account or paycheck.
Step 9: Put in the maximum
Put in the maximum allowed every year. You’ll thank us later.
Did You Know?
Thirty-nine percent of Americans have an individual retirement account, according to the American Association for Retired Persons.
Find More Retirement Funds Articles
You must be logged in to post a comment