Freedom SIP is a concept to help investors achieve their financial goals by choosing their SIP period in order to withdraw through the SWP method later.
Investors can choose a SIP tenure of 8,12,15,20,25,30 and based on the tenure the withdrawal can be 1.5X, 2X. 3X, 5X, 8X, and 12X respectively (longer the tenure, higher the withdrawal)
Assuming the investor picks 15 years as his SIP tenure and starts a SIP of Rs 10,000, after completing the SIP tenure, his corpus then shifts to a target scheme for SWP and he shall then receive up to 3x SIP instalment i.e, up to Rs 30,000 Monthly through SWP registered till Dec 2099 (perpetual).
This inculcates goal-oriented investment planning and withdrawal in a systematic way thereby ensuring to fight inflation in the later stages of life and leaving behind a corpus as the portion of the withdrawal is only a percentage (8%) of the corpus.
An ideal tool for Post Retirement Cash flow Planning goal as most of the working class does not have pension benefits provided by their employer and this disciplined saving habit helps to create larger withdrawal along with wealth creation.
The choice of source fund (equity fund) and the target fund (balanced fund/asset allocation fund) will be determined by the financial advisor based on the investor’s risk profile.
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