Money Ki Baat | Retirement planning with Mutual Funds | What to do with your money?


Money ki Baat with ETMONEY Let me tell you
a story. This story is of Himanshu. Being a science student, Himanshu was interested
in medical science. Himanshu was a keen student and researcher of Life expectancy of human
beings. While researching Himanshu came to know, in the past 50 years the life expectancy
of humans has increased. He also realized with increasing life expectancy the retired
life has increased from 15-20 years to 25-30 years. Now people are even considering early
retirement, after which the retirement life of 40 years is a long duration. To maintain
the current lifestyle even after retiring, you will need a lot of money. Himanshu knew
he has to start preparing from today for the funds he would need at the retirement age. Himanshu
knew this can’t happen without investing. Not Just investment but the only the right
investment will help him build the retirement corpus. After researching, he came to know
before investing, it’s important to be debt-free. The responsibility of a home loan is fine.
Because credit cards and personal loans have a high rate of interest and the goods bought
using them either get used or depreciate. In home loans, the interest is low and you
get the tax benefit as well. There is a high probability of an increase in property prices.
Hence, the decision to invest along with the responsibility of a home loan can be considered.
Once you are debt-free you can start investment planning. Himanshu had to find out how much
money would he require after retirement. After 20 years how much money would he need at the
time of retirement? He needed to know this. He also planned for the emergency fund. After
retirement planning, Himanshu could start investing through mutual funds. Himanshu knew
mutual funds experts manage our money. In return, they charge a nominal fee but if he
invests through ETMONEY then he won’t have to pay any commission or fee. Himanshu also
came to know that with provident fund won’t be enough for retirement planning. With the
provident fund, investing in mutual funds is also important. Without this, accumulating
wealth for medical and lifestyle needs is difficult. After retirement, the medical expenses
shoot up the most. The provident fund won’t suffice for this. Himanshu realized that he will have
to calculate the amount he would need every month after retiring. Himanshu found out
a formula for this. First of all, he calculated his current expenses after that he added 5%
annual inflation every year. This means, by adding 5% annual inflation every year to his
current expenses he was able to calculate the amount he would need to live a comfortable
life after retirement. After knowing the amount, he needed to know, how much amount he needs
to save and invest. After finalizing this amount , on ETMONEY he got the information of equity mutual funds required to help him get to his target retirement corpus. One of the
best advice he got was that he can only reach the desired goal if he invests consistently.
Discipline is the key to success for any investment and it is important to be patient as well. Himanshu understood that if you invest with a plan to achieve a goal in a set time frame
then it’s not important to keep an eye on the daily fluctuations. One should just keep
working hard and hope that his investments will get him the planned returns. As per his
requirements, Himanshu downloaded ETMONEY app and started his investment in all these
schemes. He hopes that when the time comes, his investments
be able to help him achieve his goals.

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