POSTED BY February 4, 2011 6:07 pm COMMENTS (4)ON
MY AGE IS 27 YEARS AND I WANT TO INVEST RS 2000/MTH IN UTI RETIREMENT BENIFIT PENSION FUND FOR 30 YEARS TO GET AROUND 30000/MTH PENSION AFTER 60 YEARS.
IS IT A GOOD FUND OR ANY ONE CAN SUGGEST ANY OTHER GOOD FUND.
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4 replies on this article “UTI Retirement Benefit Pension Fund”
This has actually nothing to do with this query. But I would like to point out that
“please use lower case in your comments/questions as it is akin to shouting in irc/online forum etiquettes”. thanks.
Dear Paritosh, To earn a mly income of 30K Rs. after 30Y from now onwards, your corpus should be around 45L Rs. if we consider that post retirement & post tax your corpus ‘ll provide a net return of 8% yly. For adjustment of taxation, you may keep the corpus size around 60L Rs. but my dear friend, you are missing one important point in your calculation for retirement – INFLATION.
Please try to gaze in the future, what ‘ll be the impact of INFLATION of those 30K Rs. The then purchasing power ‘ll be very low than what you are thinking now & this is not the end of story. INFLATION ‘ll keep making trouble to you even after your retirement as the same 30K Rs. ‘ll become even less at age 64 or 70 or 75, 40-50 year down the line from today.
My choice ‘ll be to go for a pure Eq. fund or a balanced fund if you can’t digest the risk associated with Eq. Although over such long period of 30Y or so, the risk related to Eq. is very low.
THANX FOR YOUR REPLY.I AM ALREADY INVESTING RS 7000/MTH THROUGH SIP IN DIFFERENT DIVERSIFIED FUNDS .I WAS ASKING ABOUT UTI RETIREMENT BENIFIT PENSION FUND B’COZ MY AGENT TOLD ME THAT THIS IS A GOOD FUND FOR PENSION.
NOW MY QUESTION IS IS THERE ANY GOOD PENSION PLAN WHICH CAN GIVE GOOD RETURN IN LONG TERM.I AM IN PRIVATE SECTOR SO I AM LOOKING FOR A PENSION PLAN.
Having existing SIP is no reason for seeking another fund / scheme. You can very well add another Rs. 2000/- per month as SIP in good diversified equity fund.
Coming to UTI retirement benefit plan – I understand that this is debt oriented fund. According to latest information for year ending 31st Dec 2010, it has only about 38.61% asset in equity investments. Please see link below:
Hence, for a time horizon of 30 years, this is not suitable fund. You should stick to pure equity funds for such a long horizon.
In general, currently available pension plans are either debt oriented products or are ULIP in nature. ULIP schemes, in general, have two problems – one is high charges and second is compulsion to buy annuity at maturity. In general, annuity rates are lower than other fixed income instruments. Hence, in ULIP, you are practically forced to accept low rates for rest of your life time.
Hence, in general, it is better to stick to equity funds than try any pension products.
Please also note that my above opinion is generic. There could be one or two specific products in market which takes care of above two concerns. If this is the case, we can discuss such specific product. However, I am not aware of any such product as of now.