Tax-smart utilisation of your savings can provide an added bounce in achieving financial freedom during retirement. This is particularly so for salaried and self-employed people because there are no government retirement benefits available for such people in their retired life.
How best to use your savings for achieving a retirement nest egg would obviously differ from person to person as it would depend upon a person's income, his / her needs, the number of family members, their age and aspirations, the pre-retirement time period available for making investment, family commitments in pre- and post-retirement period, etc.
However, one common suggestion, which we can't emphasise too strongly, is this:--don't indulge in risky and speculative investments as regards utilization of savings in your retirement plans.
The investment focus, instead, should be such that it should enable one to save income tax on the one hand and reasonable appreciation on the other. This tax-smart approach would enable you to have a good deal of money at the time of retirement. Read on for the 8 suggestions....
(Excerpt from 51 Tips for Saving Income Tax (FY 2008-09) by R. N. Lakhotia, one of India's top taxation experts who has written several hundred books and articles on tax planning.)
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