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MUTUAL FUNDS
Light up your dusk
FIVE MUTUAL FUND PENSION PLANS TO CHOOSE FROM 

Retirement planning forms a crucial part of an individual’s financial activities, but very few actually plan their retirement. Only 4 per cent of India’s working population, mostly government employees, are covered by mandatory pension schemes. The remaining 96 per cent comprises the self-employed and salaried professionals who do not have a formal, mandated provision for pension. In the absence of social security plans it becomes important to select the right financial product to achieve the targeted retirement goal. A retirement plan should be constructed so that it ensures a desired lifestyle when you don’t earn a salary. Mutual funds have proved to be a vital tool for retirement planning because it is professionally managed and is expense free.
It is universally agreed it is better to start your retirement planning at an early stage in your career. I would go to the extent of saying that you should start it when you start your career. The key to this financial equation of ‘how can I afford to retire?’ depends on ‘what I would like to do when I retire’.Currently, products such as RBI Bonds, New Pension Scheme,
mutual funds, Senior Citizens Savings Scheme, NSC and fixed deposits are available in the market. Of the lot, mutual funds seem to be tailored to meet the requirements of the retiree. They help one to make a suitable portfolio depending on
several factors like:
• Retirement fund to be accumulated
• The most appropriate age for retirement
• Existing retirement corpus
• Desired lifestyle
• Health
• Any debts to be paid off
Retirement mutual funds are structured to provide a regular stream of income and steady growth after the retirement of an individual offering tax benefits as well. Featured below are some of the most favoured mutual funds.
 

HDFC Standard Life
Pension Super Fund

The Pension Super is designed to provide a retirement income for life with the freedom to maximise investment returns. It offers steady income after retirement along with outstanding investment opportunity by providing a choice of thoroughly researched and selected investments.   

HDFC Immediate Annuity
The HDFC Immediate Annuity is a contract that uses your capital to give you a guaranteed gross income throughout your lifetime or over a period of your choice. The income is guaranteed and is unaffected by the rise and fall of interest rates. It has a unique feature of escalation wherein gross annuity may increase at a fixed rate up to 5 per cent each year compound. It also provides with the flexibility to receive the income receipts to suit one’s circumstances.
 

ICICI PRU Forever Life

This plan comes with an add-on  rider of critical illness. The term cover gives good cushion for medical expenses during retirement and uncertainty. It also provides five different ways ofreceivingthe pension and the option of last survivorship as well.
 

LIC Jeevan Dhara 1

This retirement mutual fund has a
unique feature of early age entry of
18 years.
 

Templeton India Pension Mutual Fund
This fund offers steady returns through a portfolio up to 40 per cent in equity with the balance invested in fixed income instruments. It has a portfolio majorly (approximately 70 per cent) invested in giant and large cap companies, which gives good stability and security to the portfolio.
Nagpal is manager, marketing & business development, Financial Planning
Standards Board India.