As long as there is a job or income, then life goes on smoothly. But even after retirement, there should be no tension, make arrangements to arrange money in time.
SIP/SWP Financial Planning: In today’s era, it is very important to do financial planning on time. As long as there is a job and income, then life goes on smoothly. But even after retirement, there should be no tension, it is necessary to arrange money in time. Inflation should also be taken into account while doing financial planning. The way inflation is increasing, expenses will increase accordingly in the coming days. Today if you need 40 to 50 thousand a month, then after 20 years it will be at least 1 lakh rupees.
Although there are many options for retirement planning, first Systematic Investment Plan (SIP) and later Systematic Withdrawal Plan (SWP) can be a better option for you. This is a plan to invest in mutual funds first on a monthly basis and then withdraw a fixed amount at regular intervals. In this, you will get the benefit of high returns in mutual funds to build a large corpus. After which you will be able to withdraw large amount at regular interval. We are telling you here how by doing a monthly SIP of Rs 15,000 per month for 20 years, you can arrange a pension of Rs 1 lakh for yourself every month for the next 20 years.
Withdrawal facility at regular intervals
Basically, through Systematic Withdrawal Plan (SWP), an investor gets the option to withdraw a fixed amount from a fund at regular intervals. This is the exact opposite of a Systematic Investment Plan (SIP). The advantage of using the SWP option is that it also pays less tax as compared to the fixed interest options. Because in this, tax is levied on the profit of the units withdrawn. It will attract the same tax as in the case of equity and debt funds. Where the holding period does not exceed 12 months, investors will have to pay short term capital gains tax.
Through this, units are redeemed from the scheme. On the other hand, if there is surplus money after the stipulated time, then you get it. Investors themselves choose the option of how much money to withdraw in how much time. This money can be withdrawn on daily, weekly, monthly, quarterly, 6 months or yearly basis. By the way, the monthly option is more popular. If the investor wants to withdraw only a certain amount or if he wants, he can withdraw the capital gains on the investment.
Calculator: First 20 Years SIP
Monthly SIP: Rs 15,000
Tenure: 20 Years
Estimated Return: 12% p.a.
Value of SIP after 20 years: Rs 1.50 crore
Calculator: Next 20 Years SWP
Investment in different schemes: Rs 1.50 crore
Estimated Annual Return: 8%
Annual Return: Rs 12 lakh
Monthly Return: 12 lakh/12 = Rs 1 lakh
(Based on conversations with AK Nigam, Director, BPN Fincap)
www.financialexpress.com