Reliance Retirement Fund - Nippon India Mutual Fund · 2018-10-29 · Reliance Retirement Fund ... Source: McKinsey CEO Roundtable Report 2014, USD/INR Exchange Rate is 62.5 . Retirement

RELIANCE RETIREMENT FUND

Lambi Innings Ki Taiyari

An open ended retirement solution oriented scheme having a lock-in of 5 years or till retirement age (whichever is earlier)

1st Notified Retirement Fund Also Having Equity Oriented Scheme

P o s i t i o n i n g


Reliance Retirement Fund has 2 Schemes (with separate portfolios)

Wealth Creation Scheme & Income Generation Scheme

Reliance Retirement Fund – Wealth Creation Scheme

Reliance Retirement Fund – Income Generation Scheme

PRODUCT LABEL

This product is suitable for investors who are seeking*:

• long term growth and capital appreciation

• investment primarily in equity and equity related instruments and

balance in fixed income securities so as to help the investor in

achieving the retirement goals

*Investors should consult their financial advisors if in doubt about whether

the product is suitable for them.

PRODUCT LABEL

This product is suitable for investors who are seeking*:

• Income over long term along with capital growth

• Investing primarily in fixed income securities and balance in equity

and equity related instruments so as to help the investor in achieving

the retirement goals

*Investors should consult their financial advisors if in doubt about whether

the product is suitable for them.

WHY? RETIREMENT PLANNING

30 years ago…the

most sought after

professionals of that

time, earned a top

income of..

Source: RNAM Research

Rs. 2500 per month

Looks like a very small amount today, doesn’t it?

The top income you earned at the peak of your career, will look very small too..

When you look back 30 years after your retirement

INFLATION IS A SILENT KILLER

TODAY AFTER 30 YRS

*Assumed inflation rate of 7% p.a

If you retired with Rs.1 crore today

30 years later it would be as if you had Rs.13 lakh

A 7-FOLD EROSION IN VALUE!

*Assumed rate of inflation 7% p.a

You prepare for the first 30 working years

Acquiring knowledge, skill and attitude

So you earn sufficient income and live a good life

30 YEARS

How well have you prepared for the next 30 years into retirement?

NEXT 30 YRS

WELL PREPARED!

UK - $35,000

US - $27,000

AUSTRALIANS seem to have done quite well with retirement

$43,000 of assets per citizen

Source: McKinsey CEO Roundtable Report 2014

ILL PREPARED

CHINA - $141

INDIA - $128

That is about Rs.8000 of assets per person, set aside to fall back on after retirement

Source: McKinsey CEO Roundtable Report 2014, USD/INR Exchange Rate is 62.5

Retirement assets are just 15% of India’s GDP and can’t go too far for a country with 1.4 billion people.

Retirement assets are 146% of Australia’s GDP!

15%

146%

Source: McKinsey CEO Roundtable Report 2014

We all need retirement planning since we…

Should expect to live longer, thanks

to science and medicine

Might not be living with our children, as our elders did

Do not have any government

sponsored social security

May need a good cushion for health care as we age

HOW? RETIREMENT PLANNING

Accumulation

Retirement planning involves two distinct phases:

Distribution

The phase when you build retirement assets

The phase when you use retirement assets

You build in the first 30 years

You enjoy the benefits in the next 30 years

• You can only save a part of your income You have expenses to take care of, don’t you?

• You need that saving to become big enough

To replace your regular income when you retire

• Your accumulated assets should cover your expenses

Which will grow each year due to inflation

Accumulation Challenge

This is why you need an aggressive plan to accumulate retirement

assets

• You do one part of the job by setting aside as much as you can

• Your investments do the other part of the job by appreciating in value over time

61

92

175

346

-

50

100

150

200

250

300

350

400

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

7% 9% 12% 15%

At 7% your retirement assets will grow into Rs.61 lakh

At 15% your assets would have grown to Rs.3.46 crore

You invested Rs.5000 every month for 30 years

NO OF YEARS

AMOUNT IN RS. LAKH

Note –The above graph is only for illustration purposes, purely to explain the concept of SIP and power of compounding and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor/ tax advisor independently before investment.

In the later years you earn more, save more

In the initial years you earn less, save less

The Reality

Invest as much as you can every month Take the time advantage

Add lump sums to your corpus Take the wealth advantage

Catch up With the Corpus

If you did not begin

early, you have to add

lump sums to catch up

Lump sum investment needed for a retirement corpus of Rs.3.46cr

HOW TO READ THE GRAPH :

Investor who start investing at age 35 instead of 30 have to catch up for the 5 years

missed with a lump sum investment of Rs. 4 lakh along with a monthly SIP of 5000

for 25 yrs to accumulate a retirement corpus of Rs.3.46 Cr @15% p.a assumed rate

of return

Note –The above graph is only for illustration purposes, purely to explain the concept of SIP and power of compounding and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor / tax advisor independently before investment.

4

14

33

75

162

35

40

45

50

55

Your Catch-up Amount (Rs. Lakh) S

tart

ing

Ag

e o

f R

etire

me

nt P

lann

ing

Distribution Phase

To cautious

protection and use of assets

Change of attitude

From aggressive accumulation of

assets

Income should be adequate to maintain lifestyle

Inflation should not erode the income or corpus

Corpus should not be subjected to high investment risks

Key concerns in the distribution phase

Traditional Approach

Earn fixed annuity income

from corpus

Deposit the corpus and earn interest income

Taxable income

No growth in corpus

Low ability to fight inflation

Limitations

Invest the corpus in an income-oriented fund

Draw down as required during retirement

Modern Approach

Tax efficient SWP *

Has the potential to grow corpus over time

Scope for better return

Advantages

*Note : SWP is a facility which enables an investor to withdraw home made regular income from the accumulated corpus.

Tax benefits applicable will be in conjunction to the Current SEBI Regulations applicable to Mutual Funds.

Role of Investment

Primary focus on income

generation

Growth assets for fighting

inflation

Enable drawdown without

depleting corpus

Monthly Retirement Annuity

Higher the corpus, greater the income Higher the return, better the annuity

Note –The above graph is only for illustration purposes, purely to explain the concept of annuity and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor / tax advisor independently before investments.

HOW TO READ THE GRAPH : If over a 30 year period, the accumulated retirement corpus was Rs. 3.46 cr from a monthly SIP of Rs. 5000 at an assumed rate of 15%, then one can withdraw an annuity of Rs. 3 Lakh per month over next 30 yrs assuming that the corpus would grow at 10% post retirement

₹ 40,583

₹ 53,532

₹ 230,304

₹ 303,784

7%

10%

An

nu

ity

Rat

e %

p.a

Corpus of Rs. 346 Lakh accumulated at 15% p.a

Corpus of Rs. 61 lakh accumulated at 7% p.a

RELIANCE

RETIREMENT FUND

A one stop

Equity & Debt Oriented Retirement Solution


Key Features

Two schemes with distinct portfolios

WEALTH CREATION SCHEME

INCOME GENERATION

SCHEME

• Equity-oriented for

accumulation

• 65 - 100% in Equity & equity

related instruments

• 0 - 35% in debt and money

market securities

• Debt-oriented for

distribution

• 70 - 95% in debt and money

market securities

• 5 - 30% in Equity & equity

related instruments

Please refer Scheme information document for detailed information on Asset Allocation of the respective scheme.

• Unlimited switch between schemes

• No Exit load, subject to lock in period of 5 Yrs

• Auto Transfer Facility *

KEY FEATURES

Flexibility To Manage Investments

Auto transfer to move from accumulation to distribution

Please refer Scheme Information Document for details of the above mentioned features

* Auto Transfer is an optional facility wherein investors' entire investment (Lump sum/SIP) shall be switched automatically from Wealth Creation

Scheme to Income Generation Scheme (with nil exit load) at any date as specified by the investor (which is within or after the lock-in period) or upon

completion of 50 years of age.

• Accumulate using both SIP and lump sum over the earning years

– Step up Facility *

• Use systematic withdrawal plan (SWP) to use only what is needed after retirement

– Auto SWP*

– Manual SWP

KEY FEATURES

Systematic Transactions

*Note: ‘Step Up’ is a facility wherein an investor who has enrolled for SIP, has an option to increase the amount of the SIP Installment by a fixed amount at pre-defined intervals. Auto SWP : This optional facility aims to provide a regular inflow of money to investors (monthly/quarterly/annual) by automatic redemption of units on or after 60 years of age. Please refer Scheme Information Document for details of the above mentioned features

• As per the clause (xiv) of sub-section (2) of Section 80C of

the Income Tax Act, 1961, individual investor will get tax

deductions for investments up to Rs.1.5 lakh in a Financial

Year*

KEY FEATURES

Tax Benefits

Note: Please refer Scheme Information Document for details of the above mentioned features

*Subject to existing tax laws

Ideal Way To Invest For Youngsters

Set your

goal &

begin with

Wealth-

Oriented

Scheme

Set up SIPs

and step-up

option

Add lump

sums along

the way

Auto

transfer

to Income

Generation

Scheme

before

retirement

Continue

SIPs until

retirement

Set up auto

SWP from

Income

Generation

Scheme on

retirement

1

2

3 4

5

6

Note –The above mentioned ideal way to invest is purely a recommendation from RNAM. However, we advise investors to make investment decisions based on their risk/return profile and to take independent opinions from their tax and financial advisor before making actual investments.

Ideal Way To Invest For

Investors Nearing Retirement

Set Your Goal

& Begin with

Income-

Generation

Scheme

Set up SIPs

and Step-up

option

Add lump

sums along

the way

Continue

SIPs until

retirement

Set up auto

SWP from

Income

Generation

Scheme on

retirement

1

2

3

4

5


Salary ADDvantage Facility

• Employers can sign up to offer

employees a convenient way to invest

in Reliance Retirement Fund

systematically by opting for deduction

from their salary

• Employer transfers a monthly single

credit to Reliance Mutual Fund of

participating employees

Advantage Employees: Systematic Financial Savings for Retirement Employer: Facilitating Financial Goals of Employees

“Salary Addvantage is a special facility available in the select Schemes of Reliance Mutual Fund (RMF) to deduct the desired amount from the salary of the employees and remit the same to RMF on any date (working day) of the month or the quarter. Entry load will be nil and Exit load as applicable in the respective Scheme at the time of registration.”.


Scheme Attributes

Wealth Creation Scheme Income Generation Scheme

Asset Allocation Equity & Equity Related Instruments 65 - 100% 5 - 30%

Debt & Money Market Securities 0 - 35% 70 - 95%

Benchmark S&P BSE 500 Index Crisil Hybrid 85+15 – Conservative Index

Fund Managers Sanjay Parekh (Equity), Anju Chajjer (Debt), Kinjal Desai (Overseas Investments)

Plans and Options

Growth Plan : Growth Option

Dividend Plan : Dividend Payout Option

Direct Plan - Growth Plan: Growth Option

Direct Plan - Dividend Plan: Dividend Payout Option

Minimum Application Amount

Lumpsum – Rs.5,000 & in multiples of Rs. 500 thereafter

Monthly SIP – Rs. 500 & in multiples of Rs.500 thereafter for minimum of 12 months

Quarterly SIP – Rs.1,500 & in multiples of Rs.500 thereafter for minimum of 4 quarters

Annual SIP – Rs. 5,000 & in multiples of Rs.500 thereafter for minimum of 2 years

Additional Minimum Application Amount (Lumpsum) – Rs. 1,000 & in multiples of Rs.500 thereafter

Minimum Amount for Auto SWP

Monthly Frequency – Rs. 500 & in multiples of Rs.500 thereafter

Quarterly Frequency – Rs.1,500 & in multiples of Rs.500 thereafter

Annual Frequency – Rs. 5,000 & in multiples of Rs.500 thereafter

Tax deduction up to Rs. 1.5 Lakh per year u/s 80C (2) on the amount invested in the Fund.

Scheme Attributes Cont’d..

Kindly refer SID for further details *Subject to existing tax laws

Additional Tax Benefit* The Central Government has specified Reliance Retirement Fund as a pension fund for the purpose of clause (xiv) of sub-section (2) of section 80C of the Income Tax Act, 1961 (the “Act”) for the assessment year 2015-16 and subsequent assessment years vide notification No. 90/214/F.No.178/63/2012-ITA-I dated 23/12/2014.

Units offered under the present Scheme to the Investors, enable them to avail the benefits under clause (xiv) of Sub-section (2) of Section 80C of the Act

Accordingly, Investment made in the scheme will qualify for a deduction from Gross Total Income up to Rs.150,000/- in a Financial Year (along with other prescribed investments) under section 80C of the Act

Attribute Details

Exit Load Nil

Who can Invest The following persons (subject, wherever relevant, to purchase of units being permitted under their respective constitutions and relevant State Regulations) are eligible to subscribe to the units:

Resident Adult Individuals less than 60 years of age, either single or jointly (not exceeding three).

Non – resident Indians and persons of Indian origin residing abroad, on a full repatriation basis less than 60 years of age.

Parents / Lawful guardians on behalf of Minors

The Fund reserves the right to include / exclude new / existing categories of investors to invest in the Schemes, subject to SEBI Regulations and other prevailing statutory regulations, if any.

Currently, Individuals qualify for tax benefits U/S 80C of Income Tax Act, 1961.

Scheme Attributes Cont’d..

Point No a: Switch of investments made with ARN code, from Other than Direct Plan to Direct Plan of a Scheme shall be subject to applicable exit load, if any. Kindly refer SID for further details

Disclaimers

The information herein mentioned in the presentation is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision.

None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.

Scheme Specific Risk Factors: Trading volumes and settlement periods may restrict liquidity in equity and debt investments. Investment in Debt is subject to price, credit, and interest rate risk. The NAV of the Scheme may be affected, inter alia, by changes in the market conditions, interest rates, trading volumes, settlement periods and transfer procedures. The NAV may also be subjected to risk associated with investment in derivatives, foreign securities or script lending as may be permissible by the Scheme Information Document.

The views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

THANK YOU

ILLUSTRATIONS For Retirement Planning

Note – All the tables included herein are for illustration purpose only, and should not be taken/ considered as any indication of correlation with the scheme either by way of capital protection or equity market returns, in any manner. RNAM does not recommend any action based on these illustrations. Investors are advised to consult their financial advisor/ tax advisor independently before making any decision or investment.

INFLATION IS A SILENT KILLER

Inflation Rate 5 years 10 years 15 years 20 years 25 years 30 years

6.0% 1,33,823 1,79,085 2,39,656 3,20,714 4,29,187 5,74,349

7.0% 1,40,255 1,96,715 2,75,903 3,86,968 5,42,743 7,61,226

8.0% 1,46,933 2,15,892 3,17,217 4,66,096 6,84,848 10,06,266

9.0% 1,53,862 2,36,736 3,64,248 5,60,441 8,62,308 13,26,768

Table 1: Value of Rs. 1 Lakh over a period of time due to inflation

Note: The above table is only for illustration purposes, purely to explain the concept of inflation and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor/ tax advisor independently before investment.

DECIDE YOUR CORPUS

Table 2: How much is required to be invested per month to accumulate a retirement corpus of Rs. 1 Cr

Assumed Rate of Return

No. of Years for Retirement

5 10 15 20 25 30

7.0% 1,39,679 57,775 31,549 19,197 12,345 8,197

9.0% 1,32,584 51,676 26,427 14,973 8,920 5,462

12.0% 1,22,444 43,471 20,017 10,109 5,322 2,861

15.0% 1,12,899 36,335 14,959 6,679 3,083 1,444

Note – Though the above table illustrates the Annual Amount required to accumulate retirement corpus, SIP can be made in Monthly, Quarterly and Annual frequencies. The above table is only for illustration purposes, purely to explain the concept of power of compounding and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor / tax advisor independently before investment.

ACCUMULATING CORPUS VIA SIP

Table 3: How much retirement corpus will be accumulated with Monthly SIP of Rs. 5,000

Note: The above table is only for illustration purposes, purely to explain the concept of SIP and power of compounding and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor / tax advisor independently before investment.



5 10 15 20 25 30

7.0% 3,57,965 8,65,424 15,84,811 26,04,633 40,50,358 60,99,855

9.0% 3,77,121 9,67,571 18,92,029 33,39,434 56,05,610 91,53,717

12.0% 4,08,348 11,50,193 24,97,901 49,46,277 93,94,233 1,74,74,821

15.0% 4,42,873 13,76,085 33,42,534 74,86,197 1,62,17,648 3,46,16,398

ACCUMULATING CORPUS VIA LUMPSUM

Table 4: How much retirement corpus will be accumulated with one time investment of Rs. 10 Lakhs

Note: The above table is only for illustration purposes, purely to explain the concept of power of compounding and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor/ tax advisor independently before investment.



5 10 15 20 25 30

7.0% 14,02,552 19,67,151 27,59,032 38,69,684 54,27,433 76,12,255

9.0% 15,38,624 23,67,364 36,42,482 56,04,411 86,23,081 1,32,67,678

12.0% 17,62,342 31,05,848 54,73,566 96,46,293 1,70,00,064 2,99,59,922

15.0% 20,11,357 40,45,558 81,37,062 1,63,66,537 3,29,18,953 6,62,11,772

CATCH UP BY WAY OF LUMPSUM

Table 5: Lumpsum amount to be invested today along with Monthly SIP of Rs. 5000 to achieve retirement corpus at age of 60

(refer in conjunction with Table 3)

Note: The above table is only for illustration purposes, purely to explain the concept of power of compounding and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor / tax advisor independently before investment.


Age When You Start Retirement Planning

55 50 45 40 35

7.0% 40,50,358 26,04,633 15,84,811 8,65,424 3,57,965

9.0% 56,05,610 33,39,434 18,92,029 9,67,571 3,77,121

12.0% 93,94,233 49,46,277 24,97,901 11,50,193 4,08,348

15.0% 1,62,17,648 74,86,197 33,42,534 13,76,085 4,42,873

MONTHLY ANNUITY

Table 6: Annuity receivable per month for an investment of retirement corpus of Rs. 1 Cr

Assumed Rate of Return per

annum

No. of Years

10 15 20 25 30

7% 1,16,108 89,883 77,530 70,678 66,530

8% 1,21,328 95,565 83,644 77,182 73,376

9% 1,26,676 1,01,427 89,973 83,920 80,462

10% 1,32,151 1,07,461 96,502 90,870 87,757

12% 1,43,471 1,20,017 1,10,109 1,05,322 1,02,861

Note –The above table is only for illustration purposes, purely to explain the concept of annuity and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor / tax advisor independently before investment..

COMBINATION OF ACCUMULATION & DISTRIBUTION

Table 7: Combination of Pre-Retirement & Post-Retirement Illustration

Note: The above table is only for illustration purposes, purely to explain the concept of SIP and annuity and should not be taken as any indication of correlation with the scheme either by way of capital protection or equity market returns. RNAM does not recommend any action based on the above illustration. The investment decision of RNAM is based on several factors including research, market potential, future outlook etc. Investors are advised to refer to financial advisor / tax advisor independently before investment.

Combination of Pre - Retirement and Post - Retirement

Assumed Rate of Return For

Accumulation for 30 Yrs

Monthly SIP

Assumed Rate of Return for Annuity Per Month For Post Retirement Yrs

10%

10 15 20 25 30

15%

5000 4,57,458 3,71,990 3,34,056 3,14,559 3,03,784

10000 9,14,917 7,43,979 6,68,111 6,29,119 6,07,567

20000 18,29,833 14,87,958 13,36,223 12,58,238 12,15,135

50000 45,74,583 37,19,896 33,40,557 31,45,595 30,37,837

Assumed Rate of Return For

Accumulation for 30 Yrs

Monthly SIP

Assumed Rate of Return for Annuity Per Month For Post Retirement Yrs

8%

10 15 20 25 30

12%

5000 2,12,018 1,66,998 1,46,166 1,34,874 1,28,224

10000 4,24,036 3,33,997 2,92,333 2,69,747 2,56,448

20000 8,48,071 6,67,994 5,84,666 5,39,494 5,12,896

50000 21,20,178 16,69,985 14,61,664 13,48,735 12,82,240

Disclaimers

The information herein mentioned in the presentation is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision.

None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

THANK YOU

Documents

Reliance Retirement Fund - Nippon India Mutual Fund · 2018-10-29 · Reliance Retirement Fund ... Source: McKinsey CEO Roundtable Report 2014, USD/INR Exchange Rate is 62.5 . Retirement