When we plan for a goal, we assume a rate of return on investments for the goal and plan investments accordingly. Picking up the long-term average return is a rational choice. Long term averages are fine (even though long term averages can also change). However, the sequence of returns matters too. For the same level of long-term return, the actual output can be very … [Read more...] about How the Sequence of returns risk affects your Financial Planning?
The biggest financial risk during retirement is that you may outlive your retirement corpus. You may have planned really well and planned for the corpus to last till the age of 90 but you are fit for another 10 years by the time you turn 90. What do you do then? How will you provide for your basic expenses? Is there a way you can do away with this longevity … [Read more...] about Retirement Planning: When to purchase an Annuity plan?
LIC launched a new annuity plan LIC Jeevan Shanti in September 2018. LIC Jeevan Shanti comes in both immediate annuity and deferred annuity variants. A point to note is that LIC already has a very popular offering in immediate annuity space (LIC Jeevan Akshay VI). LIC Jeevan Shanti is quite like LIC Jeevan Akshay. The only major difference is that LIC Jeevan Shanti also has a … [Read more...] about LIC Jeevan Shanti: Single Premium, Guaranteed Pension (Features and Review)
There is a BIG difference between financial planning for retirement (accumulation phase) and financial planning during retirement (decumulation phase). Let’s look at what I mean. In this post, I will limit the discussion to investments. Financial Planning for Retirement (Accumulation Phase) During this phase, you are trying to accumulating funds for retirement. Quite clearly, … [Read more...] about Financial Planning For Retirement vs. Financial Planning During Retirement
The Govt. of India announced 7.75% Savings (Taxable Bonds), 2018 recently. Let’s understand the salient features of these bonds and whether you should consider investing in these bonds. Firstly, these are not new bonds. The Govt. withdrew 8% taxable bonds (2003) recently and has introduced these new 7.75% taxable bonds, 2018 in its place. The earlier bonds had a maturity … [Read more...] about 13 Things to know about Govt. of India 7.75% Savings (Taxable) Bonds, 2018
When it comes to retirement planning, the common advice is to start investing early, make regular contributions and let the compounding work in your favour. But, is it really that simple? Should the way you approach your retirement planning be same in your early 20s and late 50s? Your cash flows will be different at various life stages. For instance, your ability to invest at … [Read more...] about Four phases of Retirement Planning: Earn, Save, Grow and Preserve
Plan to start saving for your retirement? Where should you invest? Let’s look at various products where you can invest in. Defined Benefit Plans from Employers Pension plans from Insurance Companies National Pension Scheme (NPS) Retirement Plans from Mutual Funds Disciplined investing in Mutual funds (along with PPF, EPF etc) In this post, I will compare … [Read more...] about Retirement Planning: Pension plans or Mutual Funds?
Once you retire from work, you need to replace your salary with some other sources of regular income. You do that by deploying your retirement corpus into the right investment products. When it comes to investments, retirement comes with its own set of problems. You need to generate a regular income. Income should grow with inflation. Your investment should be reasonably … [Read more...] about Best ways to generate Regular Income during Retirement
For many of us, retirement planning is all about creating an income stream during retirement. Pension products can do that for you. There are quite a few retirement plans available in the market. Pension plans from insurance companies corner a fair share of this market. In this post, I will discuss pension plans from insurance companies in detail. How does a Pension Plan … [Read more...] about PFP Primer: Pension plans from Insurance Companies
During our working life, we get used to receiving salary credit in our bank accounts. After retirement, this routine can come to an abrupt halt. Many government employees who have been contributing to their Defined Benefit Pension plan can still heave a sigh of relief. For others, they need to figure out a way to stick to the routine. It is not that you cannot do without … [Read more...] about Tax Treatment of Pension Plans from Insurance Companies