Financial planning is a term that is an everyday part of your life, as life is a journey through which one sails with distinct financial milestones. So, from our lively childhood days to the day we retire from work, our overall financial objectives evolve.
In this article, we’ll explore how to tailor your investment strategy across different life stages and how a single tool, a mutual fund calculator, can be your guiding light.
Investment Needs & Life Stages: Everything you need to know about
- 20s to 30s
These ten years are considered the most crucial when it comes to wealth accumulation. This is when you start your professional career and likely have a steady income.
- Emergency Fund: Create a fund that is enough to go for 3-6 months of living expenses in a savings account.
- Expense control: This age binds you to spend unnecessarily. Be wise enough to keep a tab on your daily expenses.
- Management of Debt: Always prioritize paying off high-interest debt like credit cards.
- 30s to 40s
After the young adult phase, it’s time for additional responsibilities like marriage, followed by kids.
- Financial Safety: To protect your loved ones, increase life insurance coverage.
- Education of Children: You should have enough funds or should start accumulating in order to offer your children quality education for a better future.
- Ownership of property: Chalk down a plan for a down payment and consider investing in equity funds with a medium-term horizon. It’s beneficial to use a mutual fund calculator here!
- 40s to 50s
This is another crucial stage of life where income might peak, but retirement is the destination.
- Management of Risk: With time, shift your portfolio towards less volatile investments.
- Savings for retirement: From the usual you save, try to increase your contribution towards your retirement plan.
- 50s to 60s
This pre-retirement era, roughly between the 50s and 60s, is a critical financial bridge. Keep in mind that transitioning to retirement requires careful and meticulous planning.
- Income Generation: This is the time to invest in financial avenues that offer a stable and steady stream of income.
- Healthcare Planning: Consider availing an apt health insurance plan for post-retirement needs.
How can a mutual fund calculator help?
As the term suggests, it is a tool that you can use easily to get a rough estimate of what you’ll be expecting from your investments.
As it helps you estimate the potential growth of your investments in the long run, they consider certain factors like your initial investment, amount per month, expected return rate and most importantly, investment tenure.
- Making the right call
Such tools allow you to compare the potential returns of different best performing mutual funds schemes. This is particularly helpful when considering your risk profile and investment horizon. Therefore, by visualizing the potential returns from your investment, you can make wise decisions.
- Goal Setting
You aspire to travel abroad but are still determining how much you need to save monthly. By entering your desired trip cost, investment tenure, and a realistic expected return rate, the tool helps you estimate the monthly SIP (Systematic Investment Plan) amount you need to invest.
- Boost Confidence
Financial planning can feel overwhelming at times, and staying motivated throughout the entire journey is crucial. By simply entering specific investment details, you can easily calculate your future corpus.
Conclusion
If you are planning to start your investment cycle, always have a proper plan in mind. Ensure that you choose the best tax saver mutual funds or the best performing ones in order to gain access to a lucrative capital.
