Retirement Planning: Should You Invest in Equity or Debt Funds?

Retirement planning is often misunderstood as planning of finances during retirement.

Retirement planning is often misunderstood as planning of finances during retirement. Although this is one of the aspects, retirement planning starts from the accumulation phase and ends at the distribution phase. Though very few people realise the importance of retirement planning, there are even fewer who understand the right way of saving and investing for retirement. In this article, Henil Shah discusses retirement planning and its importance and illustrates with a case study which asset allocation is suitable for both the phases

Retirement is an unavoidable occurrence and there is a strong probability that one will continue to live even after they retire. As a result, you will incur expenses even after you retire. The expense in this scenario might be both predictable and unforeseen. Home expenditures, discretionary spending, children’s school or college fees, EMI outgo, savings and investments, and so on are all expected costs. Unexpected costs, on the other hand, include items such as a medical contingency reserve, a fund to compensate for job loss, etc. As a result, having a retirement plan in place to handle these expenditures is crucial.