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5 Golden Rules of Retirement Planning Using Mutual Funds

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Retirement planning is a wealth planning which one should seldom follow & start as soon as he or she starts earning. But, unfortunately due to lack of proper guidance and knowledge of a wise retirement investment plan, people starts late financial planning which sometimes didn’t give them highest return. However, seeking help of a certified financial planner is a good approach to start planning for retirement in order to become aware of latest plans and planning tips. For an investor especially a young one, here are 5 golden rules of retirement planning advocated by experts of finance field that will ensure your comfortable retirement after attaining retirement age.

Save 10 percent of your Income for retirement: This is the easiest rule for retirement planning and it should be followed by a salaried individual. For a person having a regular job, EPF appears as a good tax saving option in which all employees are advocated to contribute 12% of their basic income for retirement saving. But, the forceful nature of this tax saving retirement plan really helped a lot in build of attractive financial wealth for many individuals. For young investors, it is always suggested to start an SIP in mutual fund and automate their planner to acquire a big sum over the long term with its power of compounding even with a small contribution at initial stage. Mutual fund investment through SIP is a disciplined approach for future saving and one should choose the most suitable plan according to age profile and risk appetite to ensure highest return after retirement.

See the top performing Hybrid Debt Oriented Funds (Retirement)

Increase Investment Amount with Salary Hike:- According to a survey, salaried individuals usually gets promoted in a private sector and public sector after accomplishing 2-3 years of service in a respective field. Their salaries also get hiked by 12-15% with promotion. According to retirement planning services experts, investor should increase investment amount with increase in salary. It is also mandatory for a person to maintain the retirement saving rate at 10% so that in case of a windfall in a financial market or other financial crisis, they can be save more for the future. For this, the smart tactic is to allocate half of your increment to your savings & must enjoy rest half of the increment to boost your standard of living.

You can calculate your monthly investment for your retirement with our online calculators.

Don’t dip into corpus before you retire - Dipping into the corpus before attaining the retirement age due to withdrawal of available PF balance for a specific reason sometimes prevents your money to gain from the power of compounding. Therefore, investor should not withdraw EPF balance when he or she change jobs and must transfer it to the new account by filling ‘Form 13’ followed by its submission to a new workplace. This approach will help them to maintain a long term growth of a respective retirement plan and will also help to attain the milestone of Rs 1 crore in their PF account after your retirement.

Don’t Sacrifice Retirement Plan, Choose Education Loan for Child’s Future.

Indian parents are dedicated towards their children and most of their saving is done to secure their children future. In fact, some Indian parents also sacrifice their saving & investing for retirement to fulfill needs of the child. But, this is a risky decision for them as it didn’t have the cushion of defined benefits and it will be entirely funded by you & no bank will lend you money for retirement. Parents should also not compromise on their child’s education and future but for his secure future and education, they can opt for education loan. In fact, nowadays almost all private and Govt. banks started giving education loan for Children education under EMI option. An education loan is also very helpful in inculcating the financial discipline in the child and develops habits of early saving if he or she is responsible for the repayment of such loan.

You can calculate the Education Loan EMI with our online calculators.

Withdraw 5% a year initially after retirement

In order to secure your future and to ensure that you don’t run out of money after some years of retirement, you also need to withdraw your savings with a disciplined approach. Retire should follow the thumb rule of not withdrawing more than 5% of the corpus in the first 5 years of retirement. It can also be raised to 10% when the retire attains 70 years of age. With such approach, retires can build a strong financial wealth to leave something behind for their dependents and heirs.


These are the 5 golden rules for successful retirement planning through Systematic Investment Plan. You should consult your financial advisor about retirement planning to get the best idea about the decent retirement plan before start investing & saving for your future.

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Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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