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This Father’s Day, gift your father the best retirement present

Do you remember the movie called ‘The Pursuit of Happyness’? Nobody came out of the theatre with a dry eye after watching it. In the movie, the father does everything he can in order to provide a better life for his son. And if you are thinking that this is just a fictional story, you are wrong.

There are fathers all across the country who sacrifice their blood, sweat and money so that their children can lead better lives. In fact, many fathers even use up their savings for funding their child’s education or marriage. And in the end, they don’t have enough money for their own retirement. Surely, there is a way to remedy this situation. This Father’s Day, how about giving a retirement present to your father?

Traditional investment plans

For a long time, retirement planning meant investing money in small saving avenues like Public Provident Fund (PPF), Employee Provident Fund (EPF) or the National Saving Certificate (NSC). Even though these schemes do offer steady returns but they may not always beat inflation. That’s why, it is time for a change. How about a retirement present for your father that offers inflation-beating returns!

Mutual fund debt investments

Unlike fixed income plans, mutual funds do not offer a fixed income every month in the form of interest. This is because there is no guarantee on returns from mutual funds. That said, it is still possible to earn a regular income from mutual funds. Monthly income plans that invest in hybrid debt options provide an 85% exposure to debt investments. The remaining 15% is in equity. Similarly, investments in Quarterly Dividend Plans that offer dividend payouts are good options. These schemes are ideal for retirement where regular returns (that beat inflation) can be very helpful.

Systematic Investment Plans

You could offer an investment in a Systematic Investment Plan (SIP) as a Father’s Day gift. Equities are ideal for wealth accumulation over the years since they tend to outperform other investment options. So, if your father’s retirement is still a few years away, this is an ideal option. Steady investments in equity through SIPs can help to smooth out market volatility and provide high returns. This corpus can be quite useful to meet your father’s expenses during retirement.

But remember that as he nears retirement, it is best to switch from equity to safer avenues like debt funds. This way, you can protect the fund from unpredictable market movements during this critical stage.

Few things to consider

The mutual fund sector offers a wide variety of options for investment. However, all of them may not be suitable for retirement. That’s why, before you invest, you need to do a few things. First of all, find out how many years are left before your dad retires. How much money does he need during his retirement? What are his major expenses? The answers to these questions will help you identify an investment that is suitable for your father.

Conclusion

Over the years, your father must have provided you with lots of exciting gifts for your birthday and other special occasions. But this time, how about bringing a spark of joy in your father’s face by gifting him a retirement present? Remember, savings for the future are important for everyone and this includes your father. So, make his retirement dreams come true.

About Vikas Agarwal

Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of Finaacle.com - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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