retirement planning
After the age of 50, most people become serious about preparing for retirement. The biggest question at this time is how to ensure regular income after retirement. Financial experts believe that if a person has investable funds of around ₹1.3 crore, a properly designed bond portfolio can help him give him a regular income of around ₹1 lakh every month. However, this is only an example and the actual income will depend on the type of investment, interest rates and personal needs.
Why can a bond portfolio be a better option?
According to experts, the biggest need after retirement is regular cash flow. Bonds, debt mutual funds and other fixed-income investments can play an important role in meeting this need. There are less fluctuations in these as compared to the stock market, hence the possibility of getting regular income along with security of capital is also higher. This is why bond portfolio is considered important in retirement planning.
‘Three-bucket’ strategy will provide better balance
Financial planners recommend adopting a three-bucket strategy for retirement. In the first bucket, liquid funds or short-term investments are kept for expenses of 1-3 years, so that there is no shortage of money in case of sudden need.
The second bucket includes bonds, debt funds and other fixed-income instruments, which provide a source of regular monthly income. In the third bucket, growth assets like equity or equity mutual funds are kept, so that in the long run the effect of inflation can be defeated and the value of investment keeps increasing.
It is not right to invest the entire amount in one place
Experts say that after retirement, it is not wise to invest the entire amount only in FD or only in bonds. Similarly, completely depending on the stock market can also be risky. Correct asset allocation i.e. making balanced investments in different investment options can give better results in the long run.
Make a plan according to your expenses and risk appetite
Every person’s income, expenses, health and financial goals are different. Therefore, it is important to assess your needs before adopting any retirement plan. Experts recommend creating a retirement portfolio that has a balance between regular income, capital protection and long-term growth. If you have sufficient corpus and follow the right investment strategy, it may be possible to get a steady income every month even after retirement.
