Active SIP Investment - Important Tactics of Retirement Planning

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Many people fail to plan their retirement because it appears to be a distant time for them, so they focus on their immediate requirements. People are progressively realising that retirement preparation is just as vital as current financial planning. Retirement planning is critical, since retirement should be a phase ofrelaxation and freedom from financial worries.

In fact, retirement planning muststart as early as possible by keeping in mind various factors like inflation, recession, increasing medical costs, health conditions, etc.

One of the best ways to start with planning a retirement is to invest in Mutual funds through a simplified route i.e.Systematic Investment Plan (commonly known as SIP). Investing a certain sum of money every month till the financial goals are reached is one of the most important aspects of retirement planning. One can start investing in Mutual Fundswith a very small monthly amount, as low as Rs. 500, and over a longer tenure, this amount can reap maximum benefits for an investor.

Mutual Funds offer a wide variety of funds like Large and Multicap funds, Mid and small cap funds, ELSS funds, Balanced Debt Funds, Liquid Funds, etc. for the investors to invest in a systematic and simplified manner. You can also seek mastertrust’s expert mutual funds related services and recommendations to plan on your SIP in such a manner that it yields a maximum return on your retirement.

According to data published by the Association of Mutual Funds in India (AMFI), it shows that the MF industry had added, on average, 25.43 lakh SIP accounts each month during the FY 2021-22, with an average SIP size of about Rs. 2,278 per SIP account.  Furthermore, Indian Mutual funds have currently about 402.03 lakhs SIP Accounts as of June-2021. vs 388.36 lakhs in the previous month. There has been an increase of 3.52%.*

SIP is an investment methodto invest in Mutual Funds which allows an investor to invest a fixed amount in a mutual fund scheme at periodic intervals instead of making a lump-sum investment. SIPs are similar to recurring deposits where you deposit a fixed amount at specific time intervals.

As an ideal and flexible investment option, SIP is a simplified investment method since it helps to average the cost of one’s purchase (Rupee Cost Averaging). It acts as a mode of investment that provides a regular source of income during all the years of investment and even after retirement. Mutual funds are market-linked, so market trends and volatility do play a role in the returns.

SIPs inculcate a sense of discipline in the investors and hence investing a small amount every month up to the time of retirement would make for a suitable investment option. It helps in the capitalisation of wealth and also helps in planning for retirement in the most efficient manner.

To invest in SIPs and rely on them for retirement planning, an individual must decide on various aspects like life expectancy, recession, inflation, the possible age of retirement, rate of return, etc. SIPs offer an ideal solution for retirement needs depending on your risk appetite. An investor can schedule a fixed deduction of a certain amount through the ECS facility so that the amount can be deducted periodically and its benefits can be reaped in the later years of life.

Moreover, along with SIPs, Systematic Withdrawal Plans, i.e. SWPs allow an investor to withdraw an amount from the investments periodically. With SWP, a predetermined amount can be transferred to your bank account periodically. This can also prove to be extremely beneficial at the time of retirement.

Thus, they make for a considerably good tool to start your retirement planning since they are flexible and suitable for all investors. Additionally, Mutual funds invest across asset classes, categories and sectors, thus help to diversify your investment and reduce the overall risk.

So start investing in Mutual Funds and monitor your funds carefully at periodic intervals so that you can avail the maximum benefits atyour retirement stage.

For expert guidance on the best SIP plans in India, SIP investment plans, SIPs to invest in 2021, and all other aspects related to mutual funds, connect with mastertrust.