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R P Yadav  |217 Answers  |Ask -

HR, Workspace Expert - Answered on Sep 22, 2023

R P Yadav is the founder, chairman and managing director of Genius Consultants Limited, a 30-year-old human resources solutions company.
Over the years, he has been the recipient of numerous awards including the Lifetime Achievement Award from World HR Congress and HR Person Of The Year from Public Relations Council of India.
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VASANT Question by VASANT on Sep 21, 2023Translate
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Career

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: Dear Vasant,
In my opinion, it is advisable to withdraw the PF money after retirement. You may explore investment opportunities like Bank deposits, Mutual funds, Sovereign bonds, equities etc. However, the choice of investments depends on you.
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Financial Planner - Answered on Nov 01, 2023

Asked by Anonymous - Oct 16, 2023Translate
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IS IT BETTER TO OPT FOR EPF HIGHER PENSION OR TAKE THE TOTAL ACCUMULATIONS AFTER RETIREMENT?
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.
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