Mumbai:<\/b> The Association of Mutual Funds in India (AMFI) has issued a white paper on the occasion of completing 30 years, titled \u201cEmpowering the Future \u2013 Mutual Funds: A Bridge to Financial Freedom and Vikasit Bharat\u201d. The visionary document highlights the role of mutual funds in retirement planning for today\u2019s working population, aiming to ensure financial freedom in their later years.<\/p>\n
The AMFI white paper proposed the creation of a voluntary retirement scheme in India, managed by mutual funds, similar to the popular US 401(k) plan.<\/p>\n
The proposed Mutual Fund\u2013Voluntary Retirement Account (MF-VRA) would provide a voluntary, employer-linked retirement product managed by mutual funds. It would offer features such as voluntary participation, employer sponsorship, tax incentives, portability, and flexibility, the white paper said.<\/p>\n
\u201cThis could unlock long-term capital for the economy and provide structured retirement security to a wider population,\u201d it added.<\/p>\n
Named after a section of the US Internal Revenue Code, the 401(k) is a defined-contribution plan provided by US employers. In a traditional 401(k), employee contributions are pre-tax, meaning they reduce taxable income, but withdrawals in retirement are taxed.<\/p>\n
Globally, developed countries are adding another layer of individual pension planning as part of their multi-pillar pension systems, which include government social security supported by private pensions through defined contribution (DC) schemes, said Crisil Intelligence, the author of the white paper.<\/p>\n
\u201cThe benefits of the MF-VRA scheme would be multifaceted \u2014 enhancing pension penetration and coverage in the country, positively impacting economic growth, and reducing the burden of social security on the exchequer,\u201d the white paper noted.<\/p>\n
The UN estimates that the number of Indians aged 60 years and above will nearly double by 2050 \u2014 far exceeding the entire elderly population of Europe. Therefore, pension coverage in India needs urgent expansion.<\/p>\n
\u201cThis white paper is a reminder that retirement security must move from the periphery to the core of our financial priorities. It is a call for every working individual to start early, invest regularly, and stay the course,\u201d said Navneet Munot, Chairman, AMFI.<\/p>\n
\u201cIn doing so, these investments safeguard personal independence while channeling savings into productive capital, which fuels India\u2019s growth,\u201d Munot said.<\/p>\n
\u201cRising life expectancy, evolving family structures, and growing aspirations have made retirement planning an essential life goal rather than a distant afterthought. The years beyond active work can now span decades \u2014 a phase that must be sustained by foresight, discipline, and prudent investing,\u201d he argued.<\/p>\n
\u201cIndia is on an inspiring journey towards becoming a developed nation by 2047. Enabling every citizen to enjoy a retirement of dignity, independence, and peace of mind must be an integral part of that vision,\u201d he added.<\/p>\n
Venkat Nageswar Chalasani, Chief Executive of AMFI, said the widespread lack of preparedness for retirement poses a serious challenge, worsened by the absence of mandatory retirement savings provisions.<\/p>\n
As per the white paper, there are currently 29 mutual fund retirement schemes in operation, with assets under management worth Rs 29,105 crore.<\/p>\n","protected":false},"excerpt":{"rendered":"Mumbai: The Association of Mutual Funds in India (AMFI) has issued a white paper on the occasion of…\n","protected":false},"author":2,"featured_media":40379,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[177],"tags":[30811,30810,30316,79,18,30812,19,17,234,235,30813],"class_list":{"0":"post-40378","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-30-years-of-mutual-funds","9":"tag-amfi-white-paper-release","10":"tag-association-of-mutual-funds-in-india","11":"tag-business","12":"tag-eire","13":"tag-empowering-financial-freedom","14":"tag-ie","15":"tag-ireland","16":"tag-personal-finance","17":"tag-personalfinance","18":"tag-retirement-planning-strategies"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/40378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=40378"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/40378\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/40379"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=40378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=40378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=40378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}