Axis Retirement Fund - Dynamic Plan

Goal based investing increases investor's commitments to their life goals by enabling them to gauge tangible progress towards their goals and reduces negative behavioural biases such as impulsive decision-making and overreaction.

By identifying long term goals and saving for them in advance.One can invest a lot less over the long term and can potentially achieve much more. Power of compounding will benefit the early investments.

Such schemes where the focus is on long term goal generally tend to have significant equity exposure. So such schemes not only target goal achievement but also have the potential to create long term wealth for the investors.

Equity investments have potential to create wealth and fixed income instruments provide stability with relatively lower volatility. It helps to remain focused and unaffected by the short term volatility in the markets.

For long term goal based investing for equity oriented fund if one stays invested for more than 1 yea he/she will be taxed at 10%. For debt oriented funds if one stays invested for more than 3 years he/she is resident investor will be taxed at 20% (with indexation - even if he/she falls in highest tax bracket of 30%). It means that the tax will levied only on the profits adjusted for inflation. For example if you earn profit of 10% on your investments out of which 6% is inflation (measured by CII) you will be taxed 20% on only 4% profit.