In an ideal world, you should start investing for your retirement from the moment you start working. With a wide range of investment products, it will require time and a bit of forethought to choose the best long term investments. Doing so will help you not only save for the rainy day but also live life to the fullest.
But if you haven’t started yet, don’t worry because it is never too late to begin investing in your future.
Different age groups see investments differently. For instance, if you are in your 20s, then the best long term investments may not mean anything more than looking for the right tax saving investment under 80C. The same investment portfolio for you, if you are in your 30s or 40s, would be the perfect retirement plan.
No matter when you start, channelling your savings towards retirement is the first step you will take towards securing your financial interests that will begin taking care of you the day you stop working.
Here are some of the best long term investments that will help meet your retirement goals.
1. Retirement Income Plans
Retirement income plans are geared towards helping you accumulate a corpus that will take care of your finances post-retirement, also known as pension plans. When you pay appropriate premiums in your working years, your retirement plans stay active and get kicked in when you retire.
What you get, as a result, is an uninterrupted income after retirement. You can also choose the frequency of payouts from monthly to yearly as per your requirements. Retirement income plans are the best long term investments because they not only offer tax saving but also builds wealth through compounding. The longer you stay invested, the larger your retirement corpus will be.
2. Unit Linked Insurance Plans
ULIP Plans are market-linked pension products that are offered by many trusted life insurers such as Max Life Insurance. If you are someone looking for a long-term retirement plan that can also act as an investment, then this the perfect product for you.
As mandated by the Insurance Regulatory and Development Authority of India, starting September 2010, all pension ULIPs are not just investment-oriented but insurance-oriented products that come with a life or health cover. ULIPs are the same as pension ULIPs as they both require a 5-year lock-in period.
If you have an appetite for risk, then you can invest in pension ULIPs that invest in volatile equities that can outperform other low-risk asset classes such as bonds. Therefore, you have a better possibility of accumulating a more significant corpus over the long-term by investing in a pension ULIP. Besides, you can also get the tax-saving benefit as per section 80C of the Income Tax Act, 1961.
3. Mutual Funds
To offset the effects of inflation, you can choose market-linked instruments, such as Mutual Funds, as one of the best long term investments in your portfolio. When it comes to investing in an adaptable manner, there is nothing that compares to mutual funds. You can start building towards your retirement savings with as low as Rs. 500 a month and get high inflation-adjusted returns consistently through Systematic Investment Plans (SIPs).
Mutual Funds are investment products that are managed by financial experts. These investment schemes invest in shares or stocks (equity), government/corporate bonds/securities/Debentures (fixed income), or a mix of both.
The long-term nature of retirement planning makes mutual funds perfect for meeting retirement income goals. By investing in mutual funds, you get not only the tax-saving benefit but also the flexibility to invest or redeem from the amounts contributed towards this investment under 80C.
Mutual funds are a good investment option as long as you choose the fund that suits your unique investment needs. For example, equity mutual funds will yield the highest returns, but they are also high-risk investment instruments, therefore more suitable if you are a young and aggressive investor.
Hence, the best long term investments in India would depend on several factors, including your tolerance for risk, your potential returns, and time availability. The sooner you start,the better it would be for you in terms of returns.
4. Equities
As is with any other form of investment, equities too are a good option because they inculcate the habit of saving. At the same time, it is also considered as one of the best long term investments because it helps you save a decent amount of corpus for your future needs.
As a retirement fund, equities churn good returns over a period that can help you build a corpus of post-retirement funds. Equities also help diversify your investment portfolio and reduce the risk at the same time.
Retirement funds are one of the best ways to diversify your investment portfolio because they help you build wealth over a while. Not planning your investments early would cause you financial instability later. With the right set of investment options, you will be able to sustain financial independence during your retirement years.
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