Reliance
Retirement Fund
Why Retirement Planning?
A
30-30 rule of thumb says an individual earns for 30 years, to provide for 30
years of post-retirement life where the individual’s income would have stopped,
yet the need to maintain similar life style exists.
You build in the first 30 working
years
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We all need retirement planning since we…
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You enjoy the benefits in the next 30
years…Are you WELL prepared or ILL prepared?
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How Retirement Planning?
Two Phases of Retirement Planning
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Accumulation Phase
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Distribution Phase
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Accumulation Challenges
·
You can only
save a part of your income…You have
expenses to take care of, don’t you?
·
You need
that saving to become big enough…To
replace your regular income when you retire
·
Your
accumulated assets should cover your expenses…Which will grow each year due to inflation
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Key Concerns
·
Inflation
should not erode the income or corpus
·
Corpus should
not be subjected to high investment risks
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Role of Investment
Accumulation Phase
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Distribution Phase
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You do one part
of the job by setting
aside as much as you can. Your investments do the other part of the job by appreciating in value over time.
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Growth
of asset for fighting inflation. Inflation is a silent Killer…Inflation not only reduces the current purchasing
power but also increases the savings requirement for future. The current expense will go up by approximately 7 times
over next 30 yrs assuming inflation rate
of 7% p.a.
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Primary
focus on income generation
Enable
drawdown without depleting corpus
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Mathematics of Accumulation and Distribution
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Monthly Investment…You invested Rs. 5000 every month for
30 years
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Your Monthly Retirement Annuity
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At 7% your retirement assets
will grow into Rs.61 lakh. At 15% your assets would have grown to Rs.3.46
crore
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If over a 30 year period,
the accumulated retirement corpus was Rs. 3.46 cr from a monthly SIP of Rs.
5000 at an assumed rate of 15%, then one can withdraw an annuity of Rs. 3
Lakh per month over next 30 yrs assuming that the corpus would grow at
10% post retirement
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Reliance
Retirement Fund…A one stop Equity & Debt Oriented Retirement Solution
Two Schemes with distinct portfolios
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Wealth Creation Scheme…for Accumulation
Phase
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Income Generation Scheme…for
Distribution Phase
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Equity-oriented for accumulation
·
65 - 100% in
Equity & equity related instruments
·
0 - 35% in debt
and money market securities
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Debt-oriented for distribution
·
70 - 95% in
debt and money market securities
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5 - 30% in
Equity & equity related instruments
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Key Features
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·
Accumulate
using both SIP and lump sum over the earning years
o Step up Facility- Step UP Facility is available only
during ongoing basis and not during NFO. A facility wherein an investor who
has enrolled for SIP, has an option to increase the amount of the SIP
Installment by a fixed amount at pre-defined intervals.
·
Flexibility
To Manage Investments
o
Unlimited
switch between schemes
o
Exit load of 1%
on redemption before age 60, subject to lock in period of 5 Yrs
·
Auto Transfer is
an optional facility wherein investors' entire investment (Lump sum/SIP)
shall be switched automatically from Wealth Creation Plan to Income
Generation Plan (with nil exit load) at any date as specified by the investor
(which is within or after the lock-in period) or upon completion of 50 years
of age.
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Use systematic withdrawal plan (SWP) to use only what is needed after
retirement
o Auto SWP - This optional facility aims to
provide a regular inflow of money to investors (monthly/quarterly/annual) by
automatic redemption of units on or after 60 years of age.
o Manual SWP
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·
Tax Benefit:
As per the clause (xiv) of
sub-section (2) of Section 80C of the Income Tax Act, 1961, individual
investor will get tax deductions for investments up to Rs.1.5 lakh in a
Financial Year
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