Athira Sethu
Kochi, 10 April 2026
It goes without saying that the current concept of retirement planning involves not just savings but income creation that will be guaranteed for the rest of one’s life. Given the growing inflation rate and increasing life expectancy, it becomes important to ensure sufficient funds upon retirement.
Currently, various sources of retirement income include SWP in mutual funds, NPS, EPF, fixed deposits, and bonds. However, the issue of combining the above-listed means for maximum effectiveness arises.
Mutual fund systematic withdrawal plan plays an important role in the retirement process as well. An investor may withdraw a certain sum of money from their mutual fund investment periodically. This feature provides additional advantages as you have much more flexibility. Unlike dividend payments, SWP gives you the possibility to change the amounts depending on your needs. Moreover, you do not depend on the mutual fund’s profitability and decision-makers as well as the tax rate, which, according to the rules, is calculated by the capital gain.
NPS is a good long-term investment choice for retirement as it gives tax benefits and permits partial tax-free withdrawal after age 60. However, a portion of the corpus needs to be converted to annuities and withdrawal is limited until the time of retirement, which makes it inflexible before that age.
EPF is an important tool for retirement savings for salaried employees. PPF is another safe investment for retirement. Though contribution in PPF is limited, fixed deposits, bonds, and non-convertible debentures (NCDs) are safe choices to generate regular income. However, they are vulnerable when it comes to fluctuation in interest rates. In case the interest rate declines, reinvestment from such schemes might suffer. It is where flexible retirement tools like SWPs come in handy.
It is crucial to save early in life for retirement purposes. This is one of the essential tenets of retirement planning. Early investing will enable one’s savings to compound into a considerable sum. It doesn’t matter whether one saves a large amount of money every month; consistent saving in small amounts over the years will generate enough corpus for retirement. Also, since retirement is inevitable, it makes sense to start early.
Regarding the allocation of resources, people aged 40 years old should keep putting money in EPF, but at the same time, they can look at PPF and NPS as tools that will help build savings. It is vital to have a portfolio of equities (around 50-65%, according to personal risk level). If a person wants to be riskier, he/she can invest in NPS, which will give the ability to have up to 75% of equity.
To summarize, it is necessary to mention that the process of retirement planning requires having different instruments that are aimed at creating wealth and generating income.
