ELSS vs National pension Scheme (NPS)

NPS is more of a retirement solution than an investment solution. It invests partially in equities but the lock in period is till the retirement age of 60. This may be restrictive for young investors who are aiming for higher returns in a relatively medium period time. If you are looking to generate returns within the timeframe of three to five years then NPS is not the scheme to invest. The long term capital gains on ELSS are tax free. The same is not applicable for NPS. 40% of the maturity amount has to be used to buy annuities and … Click here to continue…..

Mutual Fund Pension Plans in India

Pension plans offered by Mutual Funds do not get as much of mention, compared to the other retirement planning solutions like PPF, Insurance Plans etc. This is surprising, since the 5 to 10 year investment returns from mutual fund pension plans are quite good. UTI Retirement Benefit Pension Fund was the first fund to be launched in this space in 1994, followed by Templeton India Pension Plan in 1997. After a gap of 15 years, Tata Mutual Fund came out with a retirement savings fund in November 2011. On a 5 year annualized basis, these plans have delivered returns of … Click here to continue…..

Advantages & Disadvantages of Mutual Fund Pension Plans as retirement planning solution

Advantages of Mutual Fund Pension Plans : With higher allocation to equities (around other products), mutual funds pension plans can generate superior returns in the long run compared to other products like PPF, NPS, insurance plans etc Due to higher returns, Mutual fund pension plans offer a hedge against inflation Charges of mutual fund pension plans are much lower compared to insurance products Investments in Mutual Fund pension plans qualify for Section 80C benefits, under Income Tax Act Disadvantages of Mutual Fund Pension Plans : There is limited flexibility, with heavy exit load of up to 3%, in case of … Click here to continue…..

What is Mutual Fund Pension Plan?

Pension plans offered by Mutual Funds do not get as much of mention, compared to the other retirement planning solutions. These funds are similar in nature to balanced funds, in that the portfolio has both a debt and an equity component. However, unlike balanced funds the equity exposure and portfolio risk is much lower. While most balance funds have 60 – 70% of their portfolio invested in equities, pension plans have only 40% or so invested in equities. The balance is invested in fixed income securities. Investors can invest either in lump sum amounts or through systematic investment plans. Post … Click here to continue…..

What is a pension plan?

A pension plan is an annuity product which generates income during retirement. At a very high level there are two types of pension plans: Immediate annuity plans: These plans start paying fixed annuities from day one. These plans are preferred by investors who receive a large sum as superannuation benefit post retirement. The investors choose to invest the proceeds in a pension plan so as to generate safe and regular income for the rest of his or her life. There are only a few immediate annuity plans in India, such as LIC Jeevan Akshay, ICICI Prudential Immediate Annuity, HDFC Immediate … Click here to continue…..