January 19, 2011 7:01 pm
I am just wondering if I should go for pension/retirement plans by various companies or continue investing in MF and ULIPs ?
Any help would be appreciated.
Out of all the reasons, one reason for which I don’t like NPS is the limitation of investment in index. Even if some of the index companies are not performing, the fund manager can not do anything except to be witness of fall of the fund. On the other side, the fund manager of equity diversified fund can exit such sectors or reduce the investments there. That’s why, if you look the past performance, the returns of such funds are always more than index funds.
One should be aggressive to manage long term goals. However, you can shift some money in debt after the age 45, but not before that.
Hope it will help you.
If you are a conservative investor ( like me ), I think you should go in for NPS. Agreed as on today, it works on EET mode. But after DTC it will get converted in to EEE mode just like PF or PPF. You can invest up to 50% in the equity and rest in debt. Equity portion goes in to an Index fund so it is safer. And NPS is very cheap.
ULIP can give you better returns but to get maximum out of ULIP, you have to be market savvy ( I am not ) and change your investment pattern as per the market conditions.
I agree with Manish. As per new IRDA guidelines, all pension plans need to invest certain amount in debt to give little guaranteed returns. That impacts the profit in long term. Also, the annuity received in pension plans are taxable. Even NPS is also taxable. So, invest in equity diversified mutual funds and create wealth.
Some changes in pension plans are expected in this budget as far as taxation is concerned. Review your portfolio after that.
Thanks for that information. I had no clue that pension plans are taxable.
You can go with MF or ULIP whatever you are comfortable with and have control over .
No strong reason to invest in pension plans at the moment ,you can just build hte wealth somewhere and buy retirement plans later
Thanks Manish, for your insight.
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