Retirement and pension are synonymous to each other. Investors have started feeling that buying pension plan will only take them to a secure retirement. Retirement planning is the selection of products become easy.

Retirement planning has three steps – accumulation, preservation and distribution. In accumulation stage you invest in different investment products based on your risk profile and time horizon towards retirement. Preservation and distribution stages go parallel to each other and these stages come after getting retired. Pension plan works on the concept of preserving wealth accumulated and incur retirement expenses. Mutual funds are very tax efficient compared to pension plans and flexible investment instrument offered by mutual fund helps to plan retirement more efficiently.

In accumulation stage of retirement planning one just have to decide which mutual fund scheme they should select and the asset allocation that they want to go with and they can also make a combination of equity, debt, gold and real estate depending on their risk profile and time period. As retirement savings are generally of very long term nature so one can select among diversified equity funds which may include a combination of Large and Mid-cap funds, also in case of debt allocation they may also go for long term debt funds.

At the preservation and distribution stage one need to go for more of a conservative side following a defensive approach with investment in short term debt fund, fixed maturity plan etc. Herewith one should also look for regular income generation, so one can go for systematic withdrawal plan or dividend pay-out options offered by various fund houses.

Here are the top 4 mutual fund schemes for retirement planning.

  1. Franklin India Pension Plan
  2. UTI Retirement Benefit Pension
  3. TATA Retirement Saving Fund
  4. ICICI Pru Pension Plan

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