IS IT ADVISABLE TO KEEP PF BALANCE WITH EPFO (AFTRE RETIREMENT) TO EARN INTEREST ON HIGHER SIDE?. OR IT IS PROFITABLE TO INVEST IN BANK DEPOSITES?

Ans: You should withdraw your EPF(with interest)and invest in PMVVY, SCSS, Postal MIS(15, 30, 15, total 60L) since these come with sovereign safety.

Then look at FDs but prefer Big/Govt banks and do split it into small ticket size across banks.

Ensure adequate healthcare support for self and spouse in retirement.

SWP from MFs is also an option to get periodic payments from MF corpus but you will need advice from an MF advisor to plan this.

*Investments in mutual funds are subjected to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates

Ans: The decision to choose a higher pension through the Employees' Provident Fund (EPF) or to take the complete accumulations as a lump sum after retirement is influenced by your financial goals, risk tolerance, and personal circumstances.

Opting for Higher Pension (Annuity):
Pros:
• Provides a regular and secure source of income in retirement.
• Reduces the risk of outliving your savings.
• Offers financial stability during retirement years.
Cons:
• The pension amount might be fixed and may not keep up with inflation.
• Leaves less room for flexibility or accessing a lump sum for unforeseen expenses.

Taking Total Accumulations as a Lump Sum:
Pros:
• Provides a lump sum that can be invested or used as needed.
• Offers flexibility to manage your own investments and potentially achieve higher returns.
• Allows you to address large, immediate expenses or emergencies.
Cons:
• Requires disciplined financial management to ensure the money lasts throughout retirement.
• Carries the risk of outliving your savings if not managed wisely.

The decision should be in line with your retirement objectives. If financial stability and a steady income are your main concerns, choosing a higher pension option through EPF can be a wise decision. If you're comfortable handling your own funds, want flexibility, and have a well-thought-out retirement plan, taking the lump sum and investing it properly could bring superior returns and financial control.

Ans: Before making any decisions regarding your investments, it's crucial to carefully evaluate your financial goals, risk tolerance, and investment horizon. Here are some points to consider:

EPF Withdrawal: Withdrawing a significant portion of your EPF balance may impact your retirement savings. EPF offers a stable and secure avenue for retirement savings with tax benefits. Consider the long-term implications of reducing your EPF corpus, especially if it's a primary source of retirement income.

SBI Hybrid Fund: While investing in mutual funds like SBI Hybrid Fund can offer potential growth and regular income through systematic withdrawal plans (SWP), it's essential to assess the fund's risk profile, past performance, and suitability for your financial objectives. Hybrid funds typically invest in a mix of equity and debt instruments, providing a balance between growth and stability.

Financial Advisor's Recommendation: Evaluate your advisor's recommendation in the context of your overall financial plan. Consider seeking a second opinion or conducting thorough research on the suggested investment strategy, including the fund's performance, expense ratio, asset allocation, and withdrawal flexibility.

Financial Planning: Retirement planning involves assessing your income needs, lifestyle expenses, healthcare costs, and inflationary pressures. Ensure that your investment portfolio aligns with your retirement goals and provides adequate income sustainability throughout your retirement years.

Risk Management: Diversification is key to managing investment risk. Consider spreading your investments across different asset classes, such as equity, debt, and fixed income, to mitigate market volatility and enhance portfolio resilience.

Professional Advice: Consult with a certified financial planner or investment advisor who can conduct a comprehensive financial analysis based on your specific circumstances and provide personalized recommendations tailored to your retirement objectives, risk appetite, and time horizon.

Ultimately, the decision to withdraw from EPF and invest in mutual funds should be based on a thorough understanding of your financial situation, investment objectives, and risk tolerance. Take your time to evaluate the pros and cons before making any investment decisions, and prioritize long-term financial security in retirement.

Ans: Hello;

As per EPFO rules an account is deemed dormant if it has no contribution (except interest) for 36 months consecutively.

However due to request from members, EPFO has a current policy to pay interest upto member age 55 followed by 3 grace years i.e. upto age 58.

Yes both interest and principal are tax free.

Best wishes;