What Should You Consider for Your Retirement Fund

There are two inevitable truths. One, everyone ages and two, markets will be dynamic. There are measures to protect your retirement fund and sustain your post-retirement life. These measures can help in securing your corpus from market volatility and make it tax-efficient. 

As your age increases, balance your portfolio to have lesser equity. In times of market crash, your portfolio will not be affected adversely. It is good to invest in equities when your retirement corpus cannot beat the inflation for the future years, or you need it for growth. 

You can consider retirement schemes. One of the famous schemes offered by the government is the National Pension Scheme (NPS). Consider investing in NPS as it has benefits like one of the lowest minimum contribution limits and tax-saving benefits. A portion of the contribution is invested in equities, so the returns are generally higher. You get the option of evaluating how much of your contribution is invested in equity. However, the equity exposure has a cap depending on your age. You can claim exemption under Section 80C, 80CCD (1B) and 80CCD (2B). 

As your active source of income will stop, should you prefer not to do any other jobs, you will have to rely on your savings and investment portfolio. It might be practical to change your lifestyle accordingly. Limit any unnecessary expenditure and opt for a more conservative approach financially. 

If you want to invest in the market, consider liquid mutual funds. They are a low-risk option that invests in debt securities and money market instruments. The maturity period is 91 days and is a tax-efficient investment. 

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For any clarifications/feedback on the topic, please contact the writer at jyotsna.singh@cleartax.in

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