1. Prepay ALL Outstanding Loans to eliminate any interest burden, and clear ALL Dues to remain debt-free.
2. Make an Emergency fund of 1 year living expenses and keep it in a sweep-in bank savings-cum-deposit account and replenish it whenever you need to dip into it for meeting contingency expenses.
3. Put 13 times your total expenses in a 2-year fixed deposit which is linked to a sweep-in savings bank account, for enabling you to withdraw your monthly expenses for 1st year.
4. Put your balance lump sum amount initially in a short-term debt fund.
5. Select 1 or 2 good balanced equity mutual funds with growth option, start a STP to shift regular amounts to these funds every month, and complete the process, without any withdrawals, in 1 year.
6. Any withdrawal from balanced equity mutual funds after 1 year will be tax-free in your hands, but you should withdraw only monthly amounts required for meeting your regular income needs, while letting the balance amount remain invested in these funds for long-term inflation-beating returns.
7. For a higher growth potential in 5+ years, invest half the amount in 1 or 2 good multicap equity mutual funds with growth option, by starting STP from the balanced funds after 1st year, as it will be tax-free, and complete the process, without any withdrawals, in 1 year, which you may do so, if needed, only after 3+ years for optimum returns.
8. If you also want to exhaust your Sec 80C tax-deduction limits, an ELSS fund can also be one of these funds for investing in it to the extent required every year, besides being available to you as a tax-saving investment product with tax-free inflation-beating returns for your entire lifetime.
9. With the above strategy, in 100 months, investment of say, Rs.1 lakh will grow to Rs.2.5 lakh+, while in 100 quarters, it will grow to Rs.30 lakh+.
10. For a regular tax-free retirement income, you can also easily keep withdrawing 4% (or even 5%) of your total retirement corpus annually through monthly SWPs, for your entire retired life, while your corpus continues to grow too for bequeathing later.
11. The withdrawals from the EPF within 5 years of joining a job are taxable, irrespective of age.
12. If joining elsewhere, transfer of EPF account is advisable to complete this period.
13. A tip - If you know you are going to retire in less than five years of joining a new firm, you can secure tax-free withdrawal on retirement by making sure you transfer the EPF account from the previous company to the current one.
2. Make an Emergency fund of 1 year living expenses and keep it in a sweep-in bank savings-cum-deposit account and replenish it whenever you need to dip into it for meeting contingency expenses.
3. Put 13 times your total expenses in a 2-year fixed deposit which is linked to a sweep-in savings bank account, for enabling you to withdraw your monthly expenses for 1st year.
4. Put your balance lump sum amount initially in a short-term debt fund.
5. Select 1 or 2 good balanced equity mutual funds with growth option, start a STP to shift regular amounts to these funds every month, and complete the process, without any withdrawals, in 1 year.
6. Any withdrawal from balanced equity mutual funds after 1 year will be tax-free in your hands, but you should withdraw only monthly amounts required for meeting your regular income needs, while letting the balance amount remain invested in these funds for long-term inflation-beating returns.
7. For a higher growth potential in 5+ years, invest half the amount in 1 or 2 good multicap equity mutual funds with growth option, by starting STP from the balanced funds after 1st year, as it will be tax-free, and complete the process, without any withdrawals, in 1 year, which you may do so, if needed, only after 3+ years for optimum returns.
8. If you also want to exhaust your Sec 80C tax-deduction limits, an ELSS fund can also be one of these funds for investing in it to the extent required every year, besides being available to you as a tax-saving investment product with tax-free inflation-beating returns for your entire lifetime.
9. With the above strategy, in 100 months, investment of say, Rs.1 lakh will grow to Rs.2.5 lakh+, while in 100 quarters, it will grow to Rs.30 lakh+.
10. For a regular tax-free retirement income, you can also easily keep withdrawing 4% (or even 5%) of your total retirement corpus annually through monthly SWPs, for your entire retired life, while your corpus continues to grow too for bequeathing later.
11. The withdrawals from the EPF within 5 years of joining a job are taxable, irrespective of age.
12. If joining elsewhere, transfer of EPF account is advisable to complete this period.
13. A tip - If you know you are going to retire in less than five years of joining a new firm, you can secure tax-free withdrawal on retirement by making sure you transfer the EPF account from the previous company to the current one.