MF Query Board

MF Query Board

Readers are requested to send only one query at a time so that more readers get a chance. Have questions relating to any aspect of personal finance. Ask DSIJ at editorial@DSIJ.in and get your queries resolved.

If I start saving late for retirement, can I achieve my retirement goals?                                       
- Abhishek Sachdeva

Investing from early years of life is beneficial to create an adequate amount of corpus. Even small amounts can work for you to achieve the required nest egg due to power of compounding. In fact, the power of compounding will create wealth for you when you invest the amount for a longer period of time. Nevertheless, due to some reasons, some people aren’t able to invest in their early 20s but now they are worried about retirement. The right time to invest for retirement was 10-20 years back but it’s never too late. You can start investing in your 30s or 40s and create a retirement corpus. But now you need to be focused and patient as you will need to dedicate a larger amount towards investment.

Investing in high risk and high return instrument isn’t the option here because this might wipe off all your wealth in case of market downturn. There should be balance of high risk as well as low risk investments in your portfolio. For instance, if you had invested Rs1,000 every month from the age 25 till the age of 60 then at the rate of 9 per cent you would have a retirement corpus of Rs29,63,847. On the contrary, if you start investing from the age of 40 you will have to invest Rs4,404 every month at the rate of 9 per cent in order to reach the amount of Rs29,63,847. This is how the power of compounding works in the long term. But it’s not too late; you can start investing today to reach your retirement goal by dedicating higher investment and by staying focused and being patient.

Are there any tax benefits available if we invest in mutual funds?                                                           

- Apurva Tardeja



Taxation is the most important factor every investor should look at before investing in any instrument. Investment returns gets adversely affected due to taxation. Mutual funds are a tax-friendly investment option available for investors. Taxation on mutual fund is levied only upon the sale of units of the mutual fund scheme. Mutual funds are taxed in the following manner:

 

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