Let’s travel into the future and imagine your lives, you are on the threshold of retirement after years of service and going to enter in the next phase of your lives. A stage where your body and mind demand to be relaxed, to shrug off all the stress and live peacefully. This is the phase of life where time gets slow, most of the goals are achieved so you do not need to chase anything. However, there’s one thing which is going to help to sustain your life is “retirement fund”.

Let’s give you a spoiler in the beginning. If the retirement fund is not ready or not accumulated, you are really not retired. The struggle will continue despite body ache or mental fatigue. And we do not want it to happen so let’s come back into the present. Now this MINTIT blog must be read by two kinds of people, one who has not started to build a retirement fund or one who has started. This blog is equally important for the investors who have started to plan the most crucial investment of life.

To simplify the retirement planning for you, MINTIT has divided this blog into 2 parts. The first part will focus on planning aspects of the retirement fund and the second part will deal with the outcome of the retirement fund.

Our previous generations have done a great job in securing their retirement chapter with schemes like pension funds or investments in the fixed deposit. However, the strategy of retirement funds have changed to make it better and efficient and realistic. Let’s move on to the first part and understand the characteristics of retirement funds.

The Real Long-term Investment

The retirement fund is one of the longest investment journeys an individual takes. It is not long-term by option, it is long-term in nature. This works in your favour to harvest compounded returns as the investment typically spans 20 to 30 years.

Unlike short-term goals like buying a car, building downpayment corpus of your home or education fund of your child, the retirement fund is long-term in nature which allows investors to take a more growth-oriented approach.

Aggressive Planning

The retirement fund has to be aggressive in terms of returns not in terms of investments. The retirement fund falls in the category of peripheral investment and does not make up your core investments. Hence, you cannot invest heavily in this fund because you are also simultaneously investing for other goals as well.

However, the investment for the retirement fund allows you to take risks and you can opt for equity-oriented mutual funds with higher risks and higher returns.

Building Retirement Nest With SIPs In Mutual Funds

We have discussed the strategy, now the right tool is building the retirement fund via SIPs in the mutual funds. However, the awareness about the tool is just like knowing the tip of an iceberg.

The most important part is to use it in the right way. There are thousands of mutual funds available and picking any random fund and investing in it for 20-30 years of switching to random funds based on the performance can wreak havoc to your financial goal.

This is where a structured, goal-based platform like MINTIT plays an important role. MINTIT, India’s dedicated tech-based Mutual Fund Platform, caters to your personalised goals and accompanies you to achieve your financial milestones.

Depending on your risk profile, goals, inflation, time horizon and income, the tech-based MINTIT platform precisely suggests tailored investing plans to achieve your goals through best suited mutual funds. Download the MINTIT app now and create your retirement fund with SIPs in mutual funds.

How Much to Invest For Retirement?

In India, the traditional retirement age is considered to be around 60. But this assumption is gradually changing. Early retirement, career breaks and evolving work patterns mean that income may stop earlier than expected.

At the same time, life expectancy is increasing, which means retirement could last 25 to 30 years or even more. Moreover, with improving life-style and increasing inflation the investment amount has to be decided wisely.

For illustration, let’s assume your age is 30 and you wish to retire at the age of 60 and your monthly expenses are Rs 50,000. With life expectancy of 85, long-term inflation and return at 6% and 15% respectively, you need to build a corpus of around Rs 3.57 crore with monthly SIP of only Rs 6,700.

However, the investment amount varies from individual to individual, and this needs some serious personalisation which is available on MINTIT. Download the MINTIT app and know your personalised retirement investment plan now.

The Retirement Fund: Lump Sum Or SWP

After years of discipline and consistency despite the market's ups and down, a time will come to harvest what has been sown. This is the final chapter or outcome of the retirement planning.

Since the retirement fund is not required to be spent in lump-sum like other goals, you can follow a strategy of systematic withdrawal plan (SWP), where you can receive monthly, quarterly or yearly payouts to maintain your lifestyle post-retirement.

To know more about SWP and its comparison with fixed deposit (FD), you can download “SWP vs FD: Monthly Comparison Tool” available on MINTIT.

To reduce the risk you can park your corpus into the debt mutual funds which would further get compounded and maintain your lifestyle as well.

You do not retire from expenses, you retire from income. And that is why retirement planning is not just about building wealth. It is about building a system that can replace income for decades.

Start early, plan realistically, and focus not just on how much you accumulate, but how well it sustains you.

Stop Thinking. Start SIPing.