Investment Planning

Financial planning should be an integral part of your investment process while making informed money management decisions to secure your future.

Financial planning may include :

Asset allocation
Investment planning
Retirement planning
Insurance planning

Financial Planning : Steps

Financial planning helps to translate your personal objectives into specific plans and outlines strategies to implement these plans. The process of financial planning comprises of the following steps:

Plan your investments

To create wealth over time, one has to be a successful investor. However, to become a successful investor, one needs to have a plan as well as a strategy to implement it. Being an integral part of the investment process, one must consider certain key factors like the current financial situation, investment objectives, attitude towards risk and the time horizon.

There are three simple steps that can help determine an action plan. Firstly, make a list of personal and financial goals in the short, medium and long-term. For example, in the short term, you may want to buy a car; in the medium term you may aim to provide for children’s education; and in the long run, retirement funding could be an objective.

Secondly, you need to assess your current position in the financial lifecycle. Thirdly, you must decide as to how much risk you are willing to take while investing. This is particularly important as different financial objectives require different investments.

Asset allocation

Asset allocation is a method that determines how you divide your portfolio among different investments and provides you with the proper blend of various asset classes. In other words, asset allocation helps you to control risk in your portfolio as different asset classes will react differently to changes in market conditions such as inflation, rising or falling interest rates or a market segment coming into or falling out of favour.

There is a thumb rule for asset allocation; it says that whatever your age, that percentage of your portfolio should be invested in debt instruments. For example, if you are 25, you should have 25 percent of your investments in debt instruments. However, in reality, different circumstances and financial position for each individual may require different allocation.

Asset allocation is different from simple diversification. For example, if you diversify your equity portfolio by investing in 5 different equity funds, you really haven’t done much to control risk in your portfolio. In case of an adverse reaction, all these funds will react in a similar way. On the other hand, as mentioned earlier, different asset classes will react differently in any given situation.

Mutual funds are the most appropriate vehicle to practice asset allocation successfully. They not only provide diversification but also offer a “family of funds” to suit investment objectives of investors in different age groups with varied time horizons and occupations. Moreover, they also provide opportunities to re-balance the portfolio, which may be required as a result of changes in the circumstances.

Understand risks and rewards

Many investors make a mistake of underestimating risk and/or overestimating reward from an investment. One needs to careful about this aspect of investing. By estimating the risks associated with each of the investment options, you can improve your chances of building a greater wealth. The right way to succeed is to invest as an optimist and manage risk as a pessimist.

Select an appropriate investment option

In an ever-changing financial environment, it is essential to invest in smart options like mutual funds. Though investment risk and economic uncertainties can never be eliminated, mutual funds, thanks to their mix of experience, research and analysis are in a much better position to ensure that investors in different segments achieve their investment objectives. However, to benefit from the expertise of professional fund managers, it is necessary to invest in the right type of fund i.e. the one whose objective matches with yours.

Keep an eye on your asset allocation at all times

It is quite common to see investors allowing their portfolios to ride on in a bull market. Obviously, in times like these, the original mix of equity and debt is ignored in their quest to maximize the returns. No doubt, equity market requires a long term commitment, it is equally important to maintain the proper asset allocation. In other words, re-balancing, either up or down, is a necessary ingredient for the long term success. Portfolio rebalancing is a process of bringing the different asset classes back into a proper relationship following a significant move in one or more.

Remember, rebalancing is more about risk than return. It is equally important to decide on a time interval, like once a year, and examine the portfolio. If the asset allocation shifts a little, there is no need to bother. If it shifts by more than 5 percent, you should rebalance. This can occur naturally over time or following an abrupt rise or decline in one or more asset classes.

Another important ingredient for success is not to lose sight of your long-term objectives. Many a time, we shift the focus on short-term goals at the cost of our long-term goals. While at times it might become necessary to do so, you will do well to explore other possibilities rather than abandoning your long-term investment plan in a hurry.

Tax Benefits Under Section 80 C

There are certain approved investments that allow investors to save taxes under Section 80 C of the Income-tax Act. Under this, a taxpayer can claim tax exemption up to an investment of Rs.1.50 lakh. The following options offered by mutual funds are eligible for this tax benefit:

Equity-Linked Savings Schemes (ELSS)

ELSS are the most efficient tax-saving instruments under Section 80C. These diversified equity funds invest in equity shares of companies across market capitalization. However, being an equity-oriented fund, investors in these schemes have to withstand volatility from time to time to earn higher returns than other option under Section 80 C.

Being a tax saving option, ELSS have a lock-in period of 3 years. Capital gains and Dividends are taxed on the lines of other equity funds.

Pension Funds

SEBI defines a retirement scheme as an open-ended retirement solution-oriented scheme having a lock-in of five years or till retirement age, whichever is earlier. These schemes usually come with a lock-in period and they also qualify for tax deductions under Section 80C. Currently, Pension funds launched by HDFC Mutual fund, Reliance mutual fund, UTI and Franklin India MF offer Pension funds that are eligible for tax benefits under Section 80C.

Taxation Of Returns From Mutual Funds

Tax Regime Specific to Mutual Fund Investors in India

Applicable for the Financial Year 2023-24

I. Tax Rates for Mutual Fund Investors

EQUITY ORIENTED FUNDS (Subject to STT³)
Tax Status of Investor	Capital Gains Tax¹⁰		Tax on Distributed Income under Dividend Option	TDS on Capital Gains^6,7	TDS^6,7 on Distributed Income Dividend Option
Tax Status of Investor	Short Term	Long Term	Tax on Distributed Income under Dividend Option	TDS on Capital Gains^6,7	TDS^6,7 on Distributed Income Dividend Option
Resident Individual / HUF / AOP / BOI /	15%	10%^$12	At the applicable Tax slab rate	NIL	10%⁹
Domestic Companies				NIL	10%⁹
N R I s⁴				STCG – 15% LTCG – 10%^$12	20%²

OTHER THAN EQUITY ORIENTED FUNDS
Tax Status of Investor	Capital Gains Tax¹¹		Tax on Distributed Income under IDCW^@ Option	TDS on Capital Gains^6,7	TDS^6,7 on Distributed Income under IDCW^@ Option
Tax Status of Investor	Short Term	Long Term	Tax on Distributed Income under IDCW^@ Option	TDS on Capital Gains^6,7	TDS^6,7 on Distributed Income under IDCW^@ Option
Resident Individual /	At the applicable Tax slab rate	20%^*	At the applicable Tax slab rate	NIL	10%⁹
HUF / AOP / BOI /	At the applicable Tax slab rate
Domestic Companies / Firms	15%¹³/ 22%¹⁴/ 25%¹⁵/ 30%
N R I s⁴	At the applicable Tax slab rate	• 20^*(Listed Units)• 10%^$5(Unlisted Units)	At the applicable Tax slab rate	STCG – 30%LTCG – • 20^*(Listed Units) • 10%^$5(Unlisted Units)⁵	20%²

^*With indexation ^$Without indexation^@IDCW = Income Distribution cum Capital Withdrawal

Tax & TDS are subject to applicable Surcharge and Health & Education Cess at the rate of 4%. Please see the Notes below

NOTES:

Provided that the mutual fund units are held as capital assets.
Tax to be deducted at source at the rate of 20% [plus applicable surcharge, if any, and Health and Education Cess @ 4% on income-tax and surcharge] or at the rate specified under the relevant double tax avoidance agreement, whichever is lower as per section 196A of the Income tax Act, 1961 (‘the Act’).
Securities Transaction Tax (‘STT’) is applicable only in respect of sale of units of Equity-oriented funds (EOFs) on a recognised stock exchange and on repurchase (redemption) of units of EOFs by the mutual fund. STT in not applicable in respect of purchase/ sale/ redemption of units of other schemes (other than EOFs).
Non-resident individuals (NRI) shall be entitled to be governed by provisions of the applicable Tax Treaty, which India has entered with the country of residence of the NRI, if that is more beneficial than the provisions of the Act , subject to certain conditions. As per section 90(4) of the Act, a non-resident shall not be entitled to claim treaty benefits, unless the non-resident obtains a Tax Residency Certificate of being a resident of home country. Furthermore, as per section 90(5) of the Act, non-resident is also required to provide such other documents and information, as prescribed by CBDT, as applicable.
As per section 112 of the Act, long-term capital gains in case of NRIs would be taxable @ 10% on transfer of capital assets, being unlisted securities, computed without giving effect to first and second proviso to section 48 i.e., without taking benefit of foreign currency fluctuation and indexation benefit.
Relaxation to NRIs from deduction of tax at higher rate (except income distributed by mutual fund) in the absence of Permanent Account Number (PAN) is subject to the NRI providing specified information and documents. As per provisions of Section 206AA of the Act, if there is default on the part of a NRI (entitled to receive redemption proceeds from the Mutual Fund on which tax is deductible under Chapter XVII of the Act) to provide its PAN, the tax shall be deducted at higher of the following rates: i) rates specified in relevant provisions of the Act; or ii) rate or rates in force; or iii) rate of 20%. However, the provisions of section 206AA of the Act shall not apply, if the requirements as stated in Rule 37BC of the Income-tax Rules, 1962, are met.
Section 206AB of the Act provides for higher rate for TDS for the non-filers of income-tax return. The TDS rate in this section is higher of the following rates: i) twice the rate specified in the relevant provision of the Act; or ii) twice the rate or rates in force; or iii) the rate of five per cent. However, the said provision does not apply to a non-resident who does not have a permanent establishment in India and a person who is not required to furnish the return of income for the assessment year relevant to the said previous year and is notified by the Central Government in the Official Gazette in this behalf.

Surcharge Rate as a percentage of Income-tax

Tax Status	Income < ₹50 lakh	Income > ₹50 lakh but < /= ₹1 crore	Income > ₹1 crore but < /= ₹2 crore	Income > ₹2 crore but < /= ₹5 crore	Income > ₹5 crore
Individual / HUF/ AOP (resident & foreign)*	NIL	10%	15%	25%	37%
Tax Status	Income < /= ₹1 crore	Income > ₹1 crore, but < /= ₹10 crore	Income > ₹10 crore	–	–
Partnership Firm (Domestic / foreign)	NIL	12%	12%	–	–
Domestic company	NIL	7%	12%	–	–
Domestic company (opting for new tax regime)	NIL	10%	10%	–	–
Foreign company	NIL	2%	5%	–	–

In addition, “Health and Education Cess” @ 4% shall be applicable on aggregate of base tax and surcharge.

* The surcharge rate applicable to capital gains taxable under section 112, 112A and 111A of the Act is capped to 15%.
*In case investor is opting for ‘New Tax Regime’ under section 115BAC (1A) of the Act , the rate of surcharge is capped at 25%.
** The surcharge rates in the case of an association of persons consisting of only companies as its members as under —

Particulars	Rate
Income > ₹50 lakh but <= ₹1 crore	10%
Income > ₹1 crore	15%

There shall be no TDS deductible if dividend income paid / credited in respect of units of a mutual fund is below ₹ 5,000 in a financial year.
Capital gains arising on the transfer or redemption of equity-oriented units held for a period of more than 12 months, immediately preceding the date of transfer, should be regarded as ‘long-term capital gains’.
Finance Act 2023 has introduced section 50AA which provides that any gains on transfer / redemption of units of specified mutual funds acquired on or after 1 April 2023 are deemed as short-term capital gains. For the purposes of section 50AA, “specified mutual fund” means a mutual fund by whatever name called, where not more than 35% of its total proceeds is invested in the equity shares of domestic companies.
An “equity-oriented fund” which invests in units of another fund instead of investing directly in equity shares of domestic company may be regarded as “specified mutual fund” as per section 50AA of the Act and taxed accordingly.
Capital gains arising on transfer or redemption of Units of schemes other than EOF and other than specified mutual fund as per section 50AA of the Act shall be regarded as long-term capital gains, if such units are held for a period of more than 36 months immediately preceding the date of such transfer.
As per section 112A of the Act, long-term capital gains on transfer of units of EOFs exceeding ₹ 100,000 shall be taxable @10% provided transfer of such units is subject to STT, without giving effect to first and second proviso to section 48 i.e., without taking benefit of foreign currency fluctuation and indexation benefit. Further, cost of acquisition to compute long-term capital gains is to be higher of (a) Actual cost of acquisition; and (b) Lower of (i) fair market value as on 31 January 2018; and (ii) full value of consideration received upon transfer.
If a company decides to opt for the new taxation regime as per the Taxation Law Amendment Act, 2019, then tax shall be levied at the rate of 22%. i.e., the lower rate of 22% is optional and subject to fulfilment of certain conditions as provided in section 115BAA.
The first proviso to Section 115BAB provides that any income which is not derived from nor is incidental to manufacturing or production of an article/ thing and in respect of which no specific tax rate is specified under Chapter XII of the Act, would be taxable at 22% and no deduction would be allowed while computing such income.
Tax shall be levied @ 25%, if the total turnover or gross receipts of the financial year 2021-22 does not exceed ₹ 400 crores. Further, the domestic companies are subject to minimum alternate tax (except for those who opt for lower rate of tax of 22%) not specified in above tax rates.

Securities Transaction Tax (STT) in respect of Units equity-oriented mutual fund Schemes

Transaction	Rates	Payable by
Purchase of units of equity-oriented mutual fund	Nil	Not Appliable
Sale of units of equity-oriented mutual fund (delivery based)	0.001%	Seller
Sale of units of equity-oriented mutual fund (non-delivery based)	0.025%	Seller
Sale of units of an equity-oriented fund to the Mutual Fund	0.001%	Seller

Various Categories of MF Schemes which fall under “Other than Equity Oriented Funds”:
- Liquid Funds /Money Market Funds / Income Funds (Debt Funds) / Gilt Funds
- Hybrid Fund (Equity exposure < 65%)
- Gold ETFs / Bond ETF / Liquid ETF
- Fund Of Funds (Domestic) other than Fund of funds as defined under the “Equity Oriented Fund” definition under section 112A of the Act
- Fund Of Funds Investing Overseas
- Infrastructure Debt Funds
- Specified mutual funds as defined under section 50AA of the Act

II. OTHER TAX PROVISIONS

Capital gains arising on Transfer of units upon consolidation of mutual fund schemes of two or more schemes of EOFs or two or more schemes of a Scheme other than EOF in accordance with SEBI (Mutual Funds) Regulations, 1996 is exempt from capital gains tax.
Likewise, Capital gains arising on Transfer of units upon consolidation of Plans within a mutual fund scheme in accordance with SEBI (Mutual Funds) Regulations, 1996 is exempt from capital gains tax.
Currently, switching units of mutual fund within the same scheme from Growth Plan to Dividend Plan and vice-versa is subject to capital gains tax.
Creation of segregated portfolio: SEBI has permitted creation of segregated portfolio of debt and money market instruments by mutual fund schemes in certain situations. As per the said SEBI circular, all existing unit holders in the affected mutual fund scheme as on the date of the credit event shall be allotted equal number of units in the segregated portfolio as held in the main portfolio. As per sub-sections (2AG) and (2AH) to Section 49 of the Act, cost of acquisition of a unit or units in a segregated portfolio shall be the amount which bears to the cost of acquisition of a unit or units held by the assessee in the total portfolio in the same proportion as the net asset value of the asset transferred to the segregated portfolio bears to the net asset value of the total portfolio immediately before the segregation of portfolios. Further, the cost of acquisition of the original units held by the unit holder in the main portfolio shall be reduced by the amount as so arrived for the units of segregated portfolio.
An Equity Oriented Mutual Fund has been defined in section 112A of the Act. As per the said definition, a fund of fund scheme structure shall be treated as an Equity Oriented Fund if:
- a minimum of ninety per cent of the total proceeds of such fund is invested in the units of such other fund; and
- such other fund also invests a minimum of ninety per cent of its total proceeds in the equity shares of domestic companies listed on a recognised stock exchange
Thus, if a fund invests in units of other funds and fulfills the aforementioned criteria, then it shall be regarded as Equity Oriented Fund. However, if the aforementioned conditions are not fulfilled, then the same shall be regarded as other than Equity Oriented Fund and subjected to the same tax treatment as applicable to a non-equity-oriented fund.
However, section 50AA of the Act deems any gains on transfer / redemption of units of specified mutual funds acquired on or after 1 April 2023 as short-term capital gains. For the purposes of section 50AA, “specified mutual fund” means a mutual fund by whatever name called, where not more than 35% of its total proceeds is invested in the equity shares of domestic companies. Accordingly, an “equity-oriented fund” which invests in units of another fund instead of investing directly in equity shares of domestic company may be regarded as “specified mutual fund” as per section 50AA of the Act and taxed accordingly.
Bonus Stripping: As per Section 94(8), the loss due to sale of original units in the schemes, where bonus units are issued, will not be available for set off; if original units are: (A) bought within three months prior to the record date fixed for allotment of bonus units; and (B) sold within nine months after the record date fixed for allotment of bonus units. However, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such unsold bonus units held on the date of transfer of original units. The provision of this sub section are also applicable to securities. Further, the definitions of the terms “unit” and “record date” also include the units of business trusts (i.e. Real Estate Investment Trusts [REITs]/ Infrastructure Investment Trusts [InvITs]) and units of Alternate Investment Funds in the ambit of the said section.

DISCLAIMER
The above information is provided for basic guidance for investments in mutual funds and is based on provisions of the Income-tax Act, 1961, as sought to be amended by the Finance Act, 2023. The tax implications may vary for each assessee based on the details of his income. All rates and figures appearing are for illustrative purposes only. Tax benefits are subject to change in tax laws. Contents of this note have been drawn for informative purpose only and it is neither a complete disclosure of every material fact of Income-tax Act, 1961 nor does it constitute tax or legal advice. The AMC/Trustee/ Sponsor accept no liability whatsoever for any direct or consequential loss arising from any information provided in this note. Investors are advised to consult their tax advisor before taking any investment decision.

Planning for Children

Begin investing early

It is a dream of every parent to provide the best of education to their children. However, the ever increasing costs and lack of proper planning makes it very challenging for many of us to achieve this very important goal of our life. The key, therefore, is to have a financial plan in place. A sound plan can makes it possible for your children to have better options both in terms of deciding the type of education as well as selection of colleges. Besides, investing for your children can provide financial security should anything happen to you or your spouse. The truth is that many people make the mistake of following a haphazard approach while investing for their children as they do while making investments to save taxes and building retirement corpus.

To achieve a long-term objective like children education, it is important to start investing early and follow a correct and disciplined approach to investing. Besides, to take care of escalating costs, it is essential to invest in those options that have the potential to give positive real rate of return i.e. returns minus inflation.

The earlier you start, the longer your investments will have the time to grow. Many parents make the mistake of not starting the investment process for their child’s education when he or she is in the pre-school. Remember, investing early would enable you to benefit from the power of compounding and that would ensure that there are no shortfalls in the targeted amounts.

The way you save, as well your investment strategy, will depend on many factors like how much you wish to save, how long until the money is needed, and whether you have a lump sum or will be saving out of your current income. Mutual funds can provide an excellent vehicle for investing for you child’s education. They offer diversification, flexibility and simplicity. Besides, investing through a tax efficient vehicle like mutual funds can help you accumulate more for your child’s education.

Things to consider before investing

Here are some important things to consider before you start your long-term investment process.

How much you want to invest on a regular basis? It is important that you choose an amount that you will be comfortable investing regularly over the long term.
Decide the frequency at which you want to invest—each month or each quarter.
Continue investing irrespective of whether the market falls or rises.
Remember the objective for which you are investing throughout the period. This will enable you to remain focused on this very important goal of your life.

For those who begin early, equity funds can be an ideal option. As mentioned earlier, equities as an asset class have the potential to beat inflation. For those who feel the need to have a mix of equity and debt, there are certain other options. Some of the mutual funds have established dedicated balanced funds for children where in one has the option of investing in a ready made equity-oriented or a debt-oriented fund. Alternatively, one can choose a combination of some quality open-ended equity as well as debt funds. By doing so, one can not only retain the control on the asset allocation but also on making changes that may be required to be carried out due to poor performance of some of the funds or to rebalance the portfolio.

Some model portfolios

Depending upon when you begin investing for your child, here are some model portfolios:

Age of the child: newborn to 5 yrs – Investment horizon : 13 to 18 yrs

If you start investing at this stage, you allow your savings the maximum time to build up assets for your child’s education. With time on your side, you can take a higher risk and go for equity funds. However, if you choose to invest on a regular basis, try and increase the amount every year.

Age of the child: 6-12 yrs – Investment horizon: 6 to 12 yrs

While a major part of the portfolio may still focus on aggressive investment options like equity funds, it would be wise to have a balanced portfolio to cut down volatility. The endeavour should be to start including lesser volatile investment options in the portfolio as the child grows older.

Age of the child: 13- 18 yrs Investment horizon: 1 to 5 yrs

At this stage, it would be advisable to invest in funds that are least volatile. Also, liquidity should be an important consideration whiling working out the strategy. The open-ended funds can be an ideal choice as they ensure liquidity at all times and also you can achieve your goal of making your money grow at a healthy rate.

For those who decide to invest in equity funds on an on-going basis, a Systematic Investment Plan (SIP) can be the best option. It is a proven fact that a steady plan both in terms of savings and investments, help pursue financial goals. What SIP really means is that you invest a fixed sum say every month. When you invest a fixed amount, such as Rs.5000 a month, you invest at different levels of the market rather than committing a lump sum at a particular level. This helps in bringing your average cost lower than the average Net Asset Value (NAV) over time.

Planning for Retirement

What is retirement planning?

Retirement planning is a process of making financial provision for retirement before reaching the retirement age. In other words, it involves setting aside a part of your income with the intention of deriving an income from the corpus build over the years. While most of us know that we need to save for our retirement, many of us are not sure about the right way to do so. No wonder, many people get overwhelmed by the thought of retirement and they wonder how they will ever save the huge amount of money required to lead a happy retired life.

What is the right way to go about retirement planning?

Most of us are face with this dilemma because we consider retirement planning as a single event rather than making it as life long process. In other words, if one saves and invests regularly over a period of time, even a small sum of money can suffice for this purpose. The key, however, is to start investing early as the real power of compounding comes with time. Albert Einstein called compounding “the eighth wonder of the world” because of its amazing abilities.

Another challenging aspect of retirement planning is to calculate how much you will need to support yourself and your dependents. As a thumb rule, you will require around 75% of your current income to maintain your standard of living. Of course, this amount will increase with inflation. Though it is a proven fact that starting early is an important aspect of retirement planning, it is extremely difficult to decide how much you will need after retirement. A professional advisor can make things easy and hence it is always prudent to go for professional advice to ensure success in the process of retirement planning.

Retirement planning is a part of investment planning and hence you need to examine your current situation and attitude towards risk. Remember, investing without a clear picture can be too risky. The key to success is that you need to adopt a disciplined savings programme as well as have a multi stage retirement path with the flexibility of multistage approach to investing. Periodic or haphazard saving can be counterproductive.

The road to investment success can at times be bumpy. Therefore, it is important to remain focused on this long term investment objectives. While it is impossible to foresee every obstacle, knowing some of the common mistakes help in avoiding them. These are not having a plan as well as a back up plan and not making most of the investment plan. Your investment strategy should cover the following:

Start early
Invest to beat inflation
Invest regularly
Know your risk tolerance
Evaluate your insurance and investment needs
Follow a “buy and hold” strategy
Invest in tax efficient instruments like mutual funds.

Coming back to the importance of starting early, the fact is that for every 10 years you delay before starting to save for retirement, you will need to save three times as much each month to catch up.

Let us take an example of someone who is 30 years away from retirement. The question is what will be his annual expenditure then, after taking into consideration the increase in cost of living? Even if we assume a 5 per cent inflation rate for 30 years, the Rs. 100,000 annual expenditure will increase to over Rs. 435,000 by the time he retires. Therefore, if he plans for Rs. 100,000 per annum for his retirement, because that is how much he needs today, he would be having less than 25 per cent of what he would really require.

Important guidelines for retirement planning

Broadly, investors need to save a certain percentage of the annual income and invest in instruments that have the potential to give the desired results over different time horizons. The following can act as a guideline:

Ages : 25 to 40 – Depending on the age, 15 to 25% of the annual income should be saved. The portfolio should be dominated by equities and equity funds. These should comprise 70 to 80 percent of the investments. To balance out the portfolio, one should rely on other tax efficient investments such as PF, PPF and debt and debt-oriented mutual funds.

Ages : 41 to 50 – Investors in this age group should save around 25 to 35% of their annual income. As the time horizon to retirement is still long enough, equity and equity funds should continue to be a crucial part of the portfolio i.e. around 50% or more. The balance can be invested in tax efficient instruments providing steady returns.

Ages : 51 to 60 – At this stage of one’s life, the time horizon before retirement starts

shrinking. Therefore, for people in this age group, the prudent thing to do is follow a conservative approach. However, it is important to remember that it may only be a few years before one retires, but one may need to depend on retirement funds for many more years. Therefore, the key is to maintain a portfolio that will continue to grow for many years after one retires. Equity and equity should still be a part of the portfolio, though in a moderate percentage.

Please note that the write up is purely for educational purposes.