Buy ELSS As A First Step For Retirement Savings FundooMoney

Buy ELSS As A First Step For Retirement Savings

Equity linked savings scheme (ELSS) is not only a tax saving investment but also helps in saving ample amounts for retirement. Here's how people on their first job can kickstart retirement savings with ELSS.

Hello and welcome to FundooMoney, your 24X7 buddy for all your money matters. Many of us are aware of equity linked saving scheme (ELSS) offered by mutual funds. They not only help you save taxes but also make your money grow well thanks to the long term growth from equities. This can help you achieve your future financial needs such as retirement. Stay tuned and we will tell you how to use ELSS as a first step to save for your retirement.

Early in people’s work life, typically a significant portion of investments are tax-saving investments like equity linked savings schemes (ELSS). It is always a smart move to earmark these investments for your future needs like retirement. This is despite the fact you might be accumulating provident fund savings. But those savings are unlikely to support you for the entire length of retirement. Do check out our channel for more discussion on that topic.

If you invest Rs 10,000 per month in an ELSS for 30 years, and your money grows at 12 per cent per annum, you will accumulate Rs 3.05 crore. Clearly, ELSS investments can get you going a long way when it comes to saving for retirement even as you get to save taxes.

Supplement ELSS investment with increase in income
As your income increases over time, you can increase your investment amount in ELSS or invest in other equity funds performing consistently over one, three and five years. In this way, you can create a mutual fund portfolio for your retirement.

Thus, tax saving investments in the form of ELSS can be a great first step towards saving for your retirement.

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