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Retirement is often seen as the second innings of life. That is the time when you enjoy the luxury of time, while you do not have any official meetings to attend or timelines to meet. While it may be an extended vacation, you may be in for many surprises, if you have not planned for it. Retirement planning must be done prudently and systematically so that you don't have any financial constraints while planning to fulfil your pending dreams and aspirations after retirement.

A wise man once said, “the best time to plant a tree was 20 years ago; the second-best time is Now.” This quote not only gains its relevance in the World which is getting warmer every year but is equally relevant in the financial world. 

Investment in Equities is the vehicle to participate in the long-term India growth story. Investment in Index fund is the simplest way to invest in Equities and can be core part of Equity allocation due to simplicity of investment and low cost. 

We are already into the last month of the financial year 2019-20, and it is that time of the year when everyone starts thinking about filing taxes. Income tax laws provide for certain tax benefits under different provisions, including Section 80C (tax-saving investments and payments), Section 80D (payment towards medical insurance premium), Section 80G (donations to eligible charitable funds and trusts) etc. of the Indian Income Tax Act. 

When one is investing in equity markets through mutual funds, one is exposed to two types of risks – systematic risk and unsystematic risk. While systematic risk denotes the risk of changes in the macroeconomic environment impacting the investment portfolio, unsystematic risk refers to the risk of choosing a wrong company to invest in, thus making a wrong investment decision.

Market indices such as S&P BSE Sensex, NSE Nifty50, etc. are created by adopting scientific methodologies and back-tested techniques. As such, the investors may wish to invest in such indices to have smooth investment experience. However, since such indices are not tradable security in themselves, it is a difficult proposition for the investors to construct a similar investment portfolio, which replicates such an index. Index funds may be suitable to meet such investing needs.

Equity Linked Saving Schemes (ELSS) is one of the available investment options under Section 80C and is steadily emerging as a preferred investment choice amongst the investors for tax saving. This is also reflected in the ELSS Category AUM (Assets Under Management) of Rs. 1.04 lakh crores as on 31st December 2019 amounting to around 4% of the overall industry AUM.

Amidst the persisting market volatility, the monthly SIP (Systematic Investment Plan) inflows into mutual funds have sustained over Rs. 8,000 crores for 16 months. (Period- Dec 2018 – March 2020). Source: Association of Mutual Funds in India