How to plan a happy retirement

Experts advise investing retirement benefits in avenues that offer guaranteed and highest returns so that one does not need to compromise on living standards even after retirement.

How ready are you for retirement? What are the investments that can give you a carefree retired life and what are the mistakes that can take it away?.

Money9 Helpline hosted the founder of Finscholarz, Renu Maheshwari to resolve all the queries related to early retirement.

Edited excerpts

Vikas Gupta: What type of mutual fund will be useful for retirement planning, Flexi cap or balanced advantage fund? If we are not under the tax bracket can we invest in NPS or stick to mutual funds for retirement planning?

Maheshwari: Flexi cap is 100 % equity, balance advantage fund switches between equity and debt. NPS and mutual cannot be compared as both are entirely different products. NPS has a taxation benefit. NPS does not have mutual fund liquidity as you have to follow a lock-in. You should first assess how much investment you want to make for retirement, then as per taxability allocate some in NPS and some in mutual funds. In mutual funds, if you belong to a younger age group you should invest in an index fund.

Kapil Shukla, Kanpur: What are the major money mistakes one should avoid in planning for retirement?

Maheshwari: I would request don’t dump too much money in real estate. A lot of people from our generation had invested in real estate. They bought a house thinking that they would keep it for rental purposes to earn some income in their older age. But what happens is that the returns earned from rental money are 2-3%. It is also difficult to liquidate your property in emergency situations.