Do you even need a pension for retirement?
There has been a lot written on retirement planning and pension funds are sold aggressively. But do we really need them?
While retirement is inevitable and we need to plan for this, are there other tax-effective avenues that can also provide better returns? The answer is Yes. Invest in mutual funds and then do a withdrawal during the retirement, based on the needs using Systematic Withdrawal Plan (SWP).
A SWP is a financial strategy that involves the periodic withdrawal of funds from an investment portfolio over a specific period. This systematic approach helps investors generate a steady income stream while managing their investment risks. In simple terms, it is the reverse of Systematic Investment Plan (SIP), where we are investing to build a retirement corpus.
SWPs provide a reliable income stream, help manage investment risks, and can be customized to meet individual retirement goals. However, it is essential to consult with a personal finance professional to determine if a SWP is the right approach based on your specific circumstances.
Retirement is an emotional topic and lot of products are sold in the market, leveraging the emotional aspects. Some of these products may or may not suitable.
If you want to know more about the way SWPs are done, please read my latest blog. The link is given in the comments. You can also contact us for a customized SWP Plan.
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