19 Nov 2008

Invetment areas - Continued

In my last post, i had mentioned about my retirement plans. Well i was serious about it.I have started working for just 6 months now, many people might even laugh at me when i talk about retirement plans but i do have a reason for that. I want some large amount of money post retirement, so that i do not have to depend on anyone else in my old age. In 30 years time, with the rupee depreciating .. i would need lots of money in terms of today's price.
This Monday i had inquired about a ULIP linked retirement plan, the scheme was easy but the calculations were not to my understanding. As per the Relationship Manager (RM) , if i invest 20k every year for 30 years i would be reaping in lacs per annum and not 20k.

Lets see how i calculated.
Amount i would invest = 20,000 * (60-26) =   6,80,000 (flat, without interest)
As per the RM, i would be getting some 54,000 per month till i die. That is 64 lacs something per annum!! Even if i die, the remaining amount will be handed over to the person i would be nominating in the agreement.  I am not sure how he calculated that, lets wait and watch. As of now, i have thought of investing in this ULIP linked Retirement plan.  In the mean time i will ask the RM and share it with you.

So this is my investment area no 4, i guess

4) ULIP linked  Retirement plan
This plan is linked to market condition prevailing at that time. However this is a long term investment and not for short term plan, so if you are looking for a short term gains, you are at the wrong place. Govt offers a normal rate of some 10% on ULIP plans, as per the RM the interest rate will be about 24%+

1) Long term plan
2) Less dependency on others post retirement
3) Tax benefit investment

1) The interest amount is taxable. Of the whole amount post retirement, 1/3 is non taxable whereas 2/3 is taxable
2) You have to look out for finances at present, as you wont reap the benefits now


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