Talking about investing and not including your retirement plans in it is not possible, particularly in India. Investing is a part of the retirement plan for almost every mutual fund or saving fund/scheme investor. Talking about mutual funds, there is a wide range of offerings that fits every investors' requirements.
As most investors also plan for their retirement along with their investments, Solution-Oriented Mutual Fund Schemes are the best-suited investment cum retirement plan for those investors. Investors who want to build their retirement or children's education funds through mutual funds but lack the ability to make judgments about fund selection, asset allocation, and portfolio rebalancing would benefit from solution-oriented mutual funds schemes.
Types of Solution Oriented Schemes Funds
There are two Different Types of Solution-Oriented Schemes that exist. As per SEBI guidelines, mutual funds may provide the following two categories of solution-oriented mutual funds: Retirement Funds and Children's Fund, both types of the fund have the same lock-in period that is 5 years.
Why Solution-Oriented Scheme/ Funds for retirement
- These plans are designed to make financial planning easier for people who want to save for retirement, but don't have the time or expertise to manage asset allocation and portfolio rebalancing.
- These mutual fund schemes are closed-ended. As a result, it cannot be liquidated in an emergency. However, the fund allows an investor to redeem it as a lump sum payment or a series of recurring withdrawals that operate as a pension once the investor retains the retirement age. This will aid the investor's financial security in retirement.
- There are a variety of investment alternatives available depending on the sort of solution-oriented fund and its purpose. Unless you choose a conservative or life-stage linked fund option, solution-oriented funds often behave like aggressive hybrid funds.
- A solution-oriented mutual fund assists an investor in achieving a specified financial goal. These accounts also assist in meeting large financial obligations that may develop in the future, such as retirement, child education, and marriage.
- Tax advantages are available with several Solution-Oriented Mutual Funds. The monies invested in equity funds have a five-year lock-in term. As a result, taxable income can be reduced by up to Rs. 1.5 lakh under section 80C.
- There is a 5-year minimum lock-in term. As a result, investments placed in these mutual fund schemes cannot be withdrawn until a five-year term has passed. This also aids the investor in accumulating a retirement fund.
- Everyone wishes to achieve financial independence or life post-retirement. Many people have this as one of their main goals. The Solution-Oriented Schemes fulfill this as the mutual funds under this scheme the investment is usually for a long time.
Mutual fund investments are subject to market risk. Read all scheme-related documents, terms and conditions carefully before investing. The above-mentioned information is purely informational. The Greynium Information Technologies and the author are not liable for any losses caused as a result of a decision based on the article.