Plan For Your Investment To Build A Retirement Corpus

Here is how you build your retirement corpus by planning your investment.
4 mins

The post-retirement life is also essential aspect while planning an investment strategy. It is not only for those approaching the retirement stage but also for the young ones. Planning about post-retirement corpus at the beginning of your career could be an excellent decision. Analyse and invest in some of the secured long-term assets. This method can help you build good wealth by the time of your retirement.

Here is what you can do to create a good retirement corpus:

1. Calculate your expenses: To begin with, you need to have a clear picture of your expenses. You can calculate the expenses using this checklist:

a) Collect all your financial statements/ documents, bills, etc. Analyse the inflow and outflow of money in your bank account.
b) Make a list of all your monthly, quarterly, or yearly expenses.
c) Segregate the list on the basis of:

i. Fixed expenses: These are the most critical expenses that you cannot control. For example house rent, EMI, gas water bill, education, medical, insurance etc. These can be monthly, quarterly, half-yearly, or yearly.

ii. Variable expenses: These are the expenses that occur frequently, but the amount keeps varying. Such expenses are groceries, light bills, toiletries, etc. Some of these here are controllable to minimise the expenses.

iii. Miscellaneous expenses: These are non-frequent expenses that can occur at any time with varying amounts. These expenses include shopping, clubbing, holiday, chilling with friends, movies, restaurants, etc. These recreational expenses are entirely under your control. You can choose to control it as per the situation.

Performing these activities will make you clear about your inflow and outflow, how much to save out of it, and how much to invest.

2. Invest in multiple instruments: Once you know your earning potential, you can begin with the investments. You must always spread your investments across different asset classes. This reduces the risk of losses. If you decide to invest in mutual funds, you must diversify your investments into different companies and asset sizes like small-cap, mid-cap, large-cap. This strategy helps you build a good investment portfolio.

These are very beneficial as they are:

a) Adaptive
Mutual funds for retirement are very flexible to adapt than pension plans or fixed deposits. These do not have any investment limit, and you can withdraw them partially or entirely whenever you like. Re-investing is also easy with mutual funds.

b) Accessible
These are much more accessible as everything about your funds is at your fingertip in your mobile app. Also, you can study the performance of your and other mutual funds. It is very essential to have a steady income post-retirement. Mutual funds are very efficient for providing such income without much risk.

c) Tax-saving
It is not a hidden fact that pension income is also taxable as regular income. Mutual funds for retirement also provide an option for tax savings. You can invest in debt mutual funds, which are tax-free up to Rs. 1,00,000.
Invest in Mutual Funds.

3. Get monthly income: You can also earn monthly income by investing in Fixed Deposit (FD) and Systematic Deposit Plan (SDP). If you are approaching retirement, you can always invest in the above options.

Investing in non-cumulative fixed deposit allows you to earn periodic payouts. You need to invest a lump sum amount for a specific period. You can choose monthly, quarterly, half-yearly, or yearly payout frequencies. As per your choice of payout, you will get your returns post maturity. It is a good option for those dependent on a regular income to meet their financial goals.

Another option for investment is a Systematic Deposit Plan. An SDP allows you to invest monthly and even earn on a monthly basis with a minimum amount of Rs. 5,000. Each deposit acts as a new FD and matures independently based on your selected tenure. You can make multiple monthly deposits within a tenure ranging from 12 to 60 months.

Frequently asked questions

What is retirement corpus?

Retirement corpus is the amount of money you need to have saved up by the time you retire in order to support your living expenses. It is important to start saving for retirement early, as this will give your money more time to grow. 

How to invest for a good retirement corpus?

Here are some tips on how to invest for a good retirement corpus:

  • Start saving early. The earlier you start saving, the more time your money has to grow. Even if you can only save a small amount each month, it will add up over time.
  • Make regular contributions. Even if you can only save a small amount each month, it will add up over time. The more you save, the more your money will grow.
  • Invest wisely. Choose investments that are appropriate for your risk tolerance and investment goals. If you are not sure where to start, it is a good idea to speak with a financial adviser.
  • Rebalance your portfolio regularly. As you get closer to retirement, you will need to adjust your portfolio to become more conservative. This will help to protect your money from market volatility.
  • Get professional help. A financial adviser can help you create a retirement plan that meets your unique needs and goals.
Which are the safest investment options for senior citizens?

There are a number of different ways to save for retirement. Some of the safest investment options are:

  • Fixed deposit: Fixed deposits (FDs) are a good investment option for retirement. They offer a profitable return, which can help you to build a steady stream of income. FDs are also relatively safe, which is important for retirees who may not be able to afford to lose money. With Bajaj Finance Fixed Deposit senior citizens can earn returns up to 8.50% p.a.
  • Pension plans: Pension plans are a popular option for retirement savings, as they offer a guaranteed income stream in retirement. There are a number of different pensions plans available, so it is important to choose one that meets your needs.
  • Annuities: Annuities are another option for retirement savings, as they provide a guaranteed income stream for life. Annuities can be purchased with a lump sum of money or through regular payments.
How much should I invest for a good retirement fund?

The amount of money you should invest for a good retirement fund depends on a number of factors, including your age, income, expenses, and risk tolerance. A general rule of thumb is to save 15% of your income for retirement. However, this may not be enough for everyone. If you have a high income or expect to have high expenses in retirement, you may need to save more. If you have a low income or expect to have low expenses in retirement, you may be able to get by with saving less.

It is also important to consider your risk tolerance when deciding how much to invest for retirement. Risk averse investors may want to invest in safer investments, such as fixed deposits or bonds. If you are comfortable with risk, you may want to invest in riskier investments, such as stocks or mutual funds.

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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.