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I am a happy-go-lucky soul who lives life by the minute whimsically and has never worried about the future, atleast until now. Recently, at the Reliance Retirement Fund #LambiInningsKiTaiyari meet, when I was asked where I see myself twenty years from now, my reply was - "I see myself as an old woman, hopefully with lots of money". The old woman part is understandable as its a natural process and quite inevitable, but I had absolutely no clue where the 'lots of money' thingy part of my answer, would come from. After a round of introduction with other bloggers, while my mind rattled for answers as to how on earth I'd have lots of money ( that I was dreaming of ), with me doing absolutely nothing about it currently ( as in saving or investing anywhere ) - the good guys from Reliance did gave me lots of food for thought, throughout the entire meet that followed, and eased my mind that - okay, so that's where the money could possibly come from - if I invest wisely from now itself! If you are wondering what I'm blabbering about, let me just say it in simple language ( if its not simple already ;-), that it was a meet that opened my eyes pretty wide. For example, my doubt on Life Insurance and Retirement fund being the same was big time rubbished, as they are poles apart. Life Insurance is what happens after one dies, while Retirement Fund is what happens to you & your family, when you are alive and when you retire ~ as your regular source of income ( as in career/job etc ) is no more, but expenses continue; infact increases due to old age, that brings with it health issues! And this is an important aspect to ponder upon, especially, when a person's life span is increasing these days ( thanks to advancement in science ) along with inflation ( the silent killer ) that can be thrice the rate it is currently, thus, increasing the prices of commodities multi-folds ( 7 times ) within a span of 30yrs. Today's 100 bucks worth will become 760bucks in 30yrs. If you retired with 1 crore today, its value will come down to 13 lakhs in 30yrs. Isn't that scary especially if you have no back up plans - like a solid retirement plan?
When it comes to retirement planning, India is currently totally ill-prepared compared to other countries. Retirement assets are just 15% of India's GDP, whereas in that of a country like Australia, it is a whopping 146%!
On the meet, more alarming facts were revealed via the Retirement Study Survey which was conducted prior, to study the mindset of the urban Indian consumer towards financial planning, investments and their planning for retirement. It showed, how sadly, majority of the population had absolutely no idea about it i.e retirement planning, with almost 78% Indians lacking the sufficient funds for a comfortable retirement ( and less than 8% covered under private pension plans - which in future might make it difficult for the Indian economy, with larger part of the population in the retirement age bracket then ). The CEO also spoke an enlightening thought on how we normally plan to buy things which will depreciate over time in a drastic manner eg. mobiles, gadgets, beauty or lifestyle products etc, but we hardly think what's in store for the future. However, good sign is, gradually the awareness is growing and 46% population ( according to an online survey ), do plan for retirement and it is their most important financial goal. Planning for retirement ensures that one can continue to live the same lifestyle in the future too. Thus, retirement planning should not just be started, but, started early on as well! As someone said, enjoy your 2nd innings comfortably & financially content by planning much in advance i.e from your mid-twenties to early thirties itself.
So, how do we actually plan for retirement? Lets think a while - Do we work for money or money works for us? Smart people will always ensure that money works for them, not the other way round. Every percent matters over the longer term ~ a reality.
Reliance Retirement Fund is an open ended notified tax savings cum pension scheme with no assured returns ( the first notified retirement fund also having equity oriented scheme ). The Reliance Retirement Fund has 2 Schemes with separate portfolios ( along with their separate fees ) - 1. Wealth Creation ( accumulate - the phase when you build retirement assets aggressively either by saving or investing ) and 2. Income Generation ( distribution - the phase when you use retirement assets requiring careful management of the same and protection ).
So that we can tackle the menace of inflation at a later stage, with these retirement plan instruments we can build wealth in the first 30 years and reap the benefits in the next 30 years. In the schemes, Reliance allows customers to fully customize as per their desire and even lets them put upto 100% in equity+related instruments, whereas govt run NPS has its equity capped at 50%. However, it is always advisable to invest more in equity than in debt, when young. In the first phase, one can make either lump-sum payment or split into monthly/quarterly SIP. With no additional charges on the number of changes one makes. One can even opt for both. In the second phase, one can choose a monthly income payment from the corpus built or even take the lumpsum itself. On the amount invested in the fund, one can also get tax deductions upto Rs.1.5 Lakhs p.a. ( Section 80C of MF benefits ). So, what are you waiting for? Secure your future today!
The Bloggers @Reliance Retirement Fund #LambiInniningsKiTaiyari Meet!
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