Financial Planning and Retired Life

Financial planning is a crucial component of an individual’s life. Financial planning is the process through which an individual moves towards meeting personal and financial goals through the development and implementation of a comprehensive financial plan. Financial goals have to be met within a pre decided time period and for that financial planning is important.

Financial planning needs knowledge and time and requires skill and effort. Retirement planning demands ascertainment of retirement corpus, analysis of income and expenses, investment amount needed, etc. Following factors emphasize the need for retirement planning: increasing life span, inflationary trends, low returns in conventional modes of investment, unexpected contingencies, increasing medical cost, changing demographics, diminishing trend of joint family system, falling interest rates, etc.

Retirement Planning: Saving 15% Of the Income

The early a person starts planning for retirement, the more benefits he gets. Retirement planning gets influenced by a number of factors and the source of information is a key for any financial decision. Retirement planning is all about planning for the purpose of achieving financial independence after retirement. Retirement planning needs to be done and the same needs to be done by providing all the details to the retirement savings fund you are putting your money in.

The IFSC Code: What and Why

Saving 15% of your income towards retirement is a much talked about phenomenon in recent times both nationally as well as internationally. For that you need to provide your IFSC Code to the retirement savings fund company and the IFSC Code is a crucial component in the retirement details of any individual. But what is IFSC Code? IFSC stands for Indian Financial System Code commonly known as IFSC Code.

To put it in short, IFSC Code is a code which is alphanumeric and enables electronic funds transfer in India. The IFSC Code is a code with eleven characters in it. The beginning four alphabetic characters represent the bank name, and the end 6 characters of the IFSC Code representing the bank branch. The fifth character of the IFSC Code is zero and kept for future use. IFSC Bank Code is utilized by the RTGS & NEFT schemes to route the messages to the destination branches/banks.

Whenever you transfer funds online through any of the money transfer facilities – national electronic fund transfer (NEFT), real time gross settlement (RTGS) and immediate payment system (IMPS), there is a need to offer the IFSC Code of the recipient account. IFSC Code assists the national clearing cell of the Reserve Bank of India (RBI) in detecting the specific branch of the bank and in implementing the transaction without any mistake. The IFSC Code can be found on the cheque book and bank passbook. The branch-wise list of the IFSC Code can be found on the RBI’s website and the list of IFSC Code on a particular bank’s website for all its branches.

Post Retirement Investment Options

Whenever you save 15% of your income towards retirement, you have to route the money through a retirement savings fund of any company specializing in the same and you have to provide the IFSC Code of your bank for the same for fund transfer in your respective bank account. When you save 15% of the income towards retirement planning, three basic steps need to be accounted for:

• Determination of annual income for every retirement year.

• Determination of corpus to be accrued in retirement savings by the beginning of retirement so as to fund the retired years expenditure.

• Determination of contribution to savings during retirement in each remaining working year so as to accrue the amount required determined in the aforementioned step.

When there is a saving of 15% of the income towards retirement fund, there are various options available in India where a retiree can invest his or her money. The following are the best available options from a host of alternatives:

• Senior citizens Saving Scheme: This scheme is presented to early retirees or senior citizens. SCSS can be received from a bank or a post office. Early retirees can participate in SCSS as long as they do so within a month of getting their funds for retirement.

• Post office Monthly Income Scheme (POMIS Account): POMIS is a five year investment and the rate of interest is fixed in each quarter and is payable monthly. The investment in POMIS is not eligible for any tax benefit and the interest is completely taxable.

• Bank Fixed Deposits: There is safety in a bank FD and returns go well with the retirees. Bank deposits provide flexibility in terms of tenure. Instead of locking funds for a particular duration, the investor may spread the amount across different maturities.

• Mutual Funds: There is easy liquidity for the retiree when one invests his or her retirement income in a mutual fund.

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