Prajna Capital

Financial tips for retired individuals
TATA Tax Saving Fund Dividend
Which Term Plan Is Good For You?

Posted: 03 Feb 2015 03:50 AM PST

Retirement is the time to relax, enjoy life and take it easy. This however means that one has to have been very financially careful early in life to ensure that sufficient funds are saved to retire comfortably. One should ideally save from as early as possible to get better returns over time and harness the power of compounding. Long term investments are the best option for individual investing early in life, since one can benefit from the power of compounding. One should also make investments towards their retirement savings via the Electronic clearing system (ECS) route - making the whole process automatic, and ensuring that no surplus expenditure gets in the way of your retirement planning. Let us look at a few options for retired people to bolster financials.

It is the most important step where you define and write down the objectives of retirement. It is very important that a practical financial budget has been put in place and strictly adhered to. It is not only about budgeting but also about the goals that need to be achieved. Being specific is better while setting goals, for example - instead of mentioning travel, it is advisable to list out the places one wishes to travel to. Now is the time to find new ways to cut expenses. List your bills and figure out ways to cut them out. The expenses pattern pre-retirement would not be usually the same as post-retirement. Such unwanted expenses should be avoided, but keep in mind that there will be additional expenses in terms of medical bills, etc. Ideally spending less on luxuries & discretionary items to save for the unexpected needs of future will lead to better savings, and more money during retirement.

It is crucial to ensure that a source of guaranteed income has been arranged to meet one's basic requirements and for any emergency expenses. Sometimes you might find yourself spending more post-retirement on traveling, hobbies and entertainment. Healthcare cost rises significantly. So making a budget for all such expenses is very necessary. It is also very important to factor in inflation as every year, even the basic requirements becomes dearer.

Apart from regular income from pension, rentals and interest, a person could always plan to earn from his hobbies. You could always consider the option of becoming an entrepreneur (even if small scale). This could act as a source of income as well as you could pursue your dream or hobby and get emotional satisfaction. Plan all the capital investments required and prepare a budget accordingly. One must also look into the various assets possessed and the income generated from such asset. Sometimes it may be required to change or diversify the investment portfolio accordingly to manage the risk and return. For example: A portfolio of equities could be rearranged to a portfolio of fixed income, to bring in security during retirement phase.

Ensure that all medical expenses and any emergency situations expenses are met by the risk cover (if any) and do not fall on you during the retirement tenure.

Also, a lot of people look at shifting after retirement to a smaller town or village which is more peaceful and provides emotional satisfaction. Such decisions should be well planned and should look out if appropriate funds have been allocated for any such expenses.

If you have been in employment for a very long term, then do not forget to collect the amount contributed towards Provident Fund & Gratuity lump-sum. Pension is comprised of two components i.e., Commutable Pension (Lump-sum) & Non-Commutable Pension (monthly distribution of income). Gratuity shall be received by the employee from his employer on retiring from service as lump-sum amount. One can also look at a reverse mortgage, wherein one's house is pledged with the bank, and the bank pays you a monthly income for the rest of your life.

Summary:
• Make a strict budget and follow it
• Do not forget risk cover - especially health insurance
• Health costs are likely to soar - keep this in mind when budgeting
• Review asset allocation

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

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Leave your comment with mail ID and we will answer them

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

Leave a missed Call on 94 8300 8300

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Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

TATA Tax Saving Fund Dividend

Posted: 03 Feb 2015 01:25 AM PST

TATA Tax Saving Fund

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

Leave a missed Call on 94 8300 8300

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

Which Term Plan Is Good For You?

Posted: 03 Feb 2015 12:12 AM PST

Insurers have crafted variations of term plans to suit different buyers and situations. Find out which suits you best.

OFFLINE TERM INSURANCE

All insurance companies offer term plans though very few market these low-cost offerings. Agents too are not very keen to sell you these low-cost plans. The buyer will have to do the research, approach an agent and then convince him to sell the plan.

HOW GOOD IS IT:

A good option for individuals looking for a high life insurance cover at low cost but don't have access to the Net.

ONLINE TERM PLAN

Online term plans are roughly 30-40% cheaper than offline policies. The premium is low because there is no intermediary and the online buyer is perceived as a low-risk customer. He is educated, earns well and is likely to have health insurance. So, he can access good medical care quickly in case of an emergency.

HOW GOOD IS IT:

This is by far the best way to buy life insurance cover for everybody.The earlier you buy, the cheaper it is.

INCREASING COVER

In these policies, the cover increases with time to hedge against inflation. One also doesn't need to buy more insurance later in life as responsibilities grow. However, the increase in cover may not be enough to beat inflation.

HOW GOOD IS IT:

A regular term plan offers greater coverage at almost the same cost so the higher premium of the increasing cover plan is not justified.

SINGLE PREMIUM

These plans require a one-time lump sum payment for the entire tenure. These policies suit people who don't want to make a multi-year commitment or are careless about payments. It they miss a premium, the policy could lapse.

HOW GOOD IS IT:

Though costlier than regular premium policies, the buyer doesn't need to worry about lapsation due to non-payment of premium.

LIMITED PAYMENT TERM

A variation of the single premium plan. Instead of one lump sum payment at the beginning of the term, the premium payment is staggered over 5-10 years. The cover continues even after the premium paying term is over.

HOW GOOD IS IT:

The premium is higher than that of a regular plan, but these plans suit young people who have a higher investible surplus when they start their careers.

STAGGERED PAYOUTS

These plans do not pay a lump sum amount but stagger the payment over 10-15 years.The family of the policyholder gets a monthly payment for 10-15 years. Some plans even increase the payment by 10% every year to account for inflation.

HOW GOOD IS IT:

Very useful feature in a country with low financial literacy. The family may not be able to handle the lump sum amount received from the insurer.

RETURN OF PREMIUM

For people who think that buying a term plan is a waste of money, insurers have designed policies that return the entire premium at the end of the term. But this feature pushes up the premium of the policy considerably.

HOW GOOD IS IT:

The inflation adjusted value of what you get at the end of the term is virtually nothing. Better to pay the lower premium of a regular plan.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund