Planning for retirement after 30 years. Please help me on tax

POSTED BY Dr.Sachin ON October 9, 2013 1:21 pm COMMENTS (4)


Myself 27 years. Planning  retirement by age 57.

My plan: Invest 5000/month or in other words 60000/year for retirement.  Calculations gives me accumulation of good corpus by my expected age of retirement. But now Im concerned about the tax that this investment gonna incur.

What made me concerned about tax is, Im stopping my already started LIC policies and diverting that amount to the above said investments. My LIC agent asked me like, “Sir you may stop the policies started by me . Your FDs and other investment may give you good returns, but when tax is deducted  you are not going to get what is expected out of it. But for the policies suggested by me, neither investment nor the returns are taxable.”


60000/year is my planned amount out of which 30k will be invested in PPF/NSC or  tax saving MFs. remaining 30K in bank FD/ other equities. So this 60k/year should give me a good return after 30 years.


1. Is the LIC agent correct in what he has stated? Even if other investments gives a good return on a long run, when we take the tax part in to consideration is it gonna be a low return at the end.?

2.Can someone calculate or atleast guide me on how to calculate on how the tax gonna play on my retirement planning. (based on numbers i gave in Calculation section)

4 replies on this article “Planning for retirement after 30 years. Please help me on tax”

  1. ashalanshu says:

    Dear Dr. Sachin, as per current Tax rules, Tax saving MFs are tax free at the time of redemption. what ‘ll be future after 10-15-20Y, can not comment. 🙂



    1. Dr.Sachin says:

      Thanks Ashal!

  2. ashalanshu says:

    Dear Dr. Sachin, the agent is not advising in your interest. Even a 9% FD ‘ll retutrn more than LIC policy post Tax if I assume bank is offering you a FD for 30Y. How? check this.

    @ 30% slab rate of tax, the post tax income from Fd = 70% of 9% = 6.3% Interest rate.

    For your age, not a single LIC policy can provide this much return.

    My personal take ‘ll be to mopt for Tax saver MFs, which ‘ll provide you tax free return as per current tax rules. You may invest in Quantum Tax Saver or Franklin India Tax Shield. Being in Eq. investment class, these funds may look very risky for 3-7Y term but for your 30Y time frame, the potential of return is huge here.


    1. Dr.Sachin says:

      Thanks dear Ashal.
      Are returns from Tax saving mutual funds also tax free? I have started them, but i dont know about tax on returns
      Thank you.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.