I had asked in general what issues do HR managers face..here is one set of questions by a HR manager….will answer more. I have a selfish reason to do so. I AM PLANNING A LECTURE ON ‘WHAT FINANCE SHOULD A HR PERSON KNOW’…so all these will become a part of that lecture….
Some of the questions I get from my HR team members are below When I first bought your book 4 years back and got delivered to my office – all the folks in my team commented – you are just 23 and worried about retirement? 🙂
– I am contributing to my 401(k) ( this is from my US team since I moved here) or PF ( in India) what else should I do for my retirement
Well, saving money in a Provident fund account nice, but do remember it is a SAVING instrument. By definition, a savings instrument will UNDERPERFORM inflation. That is to say your PF will not keep pace with inflation.
Saving money in Provident Fund is a nice thing to do, but NOT SUFFICIENT to build a corpus for your retirement.
You need to invest small amounts regularly in SIPs of good mutual funds so that the amount grows into a big tree. This happens because of the power of the equity markets, and the power of compounding over long terms of time.
I am planning to buy pension plans – this would help me save tax and also get a pension right?
This is like a trick question. Very difficult to answer in a generic mode. If you are YOUNG (say under 40 years of age) it does not make sense for you to buy a pension plan. SIP in good equity funds is a far better option. Keep doing that. Once you reach about 40 years of age, invest in a pension plan managed by UTI or Templeton India Pension Plan. If you have been a very aggressive equity investor, some portion of your money being in a classic endowment (as a balancing debt component) is also not a bad idea. However it should be a very small amount, and limited pay. OMG it is complicated 🙂
Do you invest in shares? Can you tell me the shares which are good , I will buy them ? ( I think you have done enough post on this)
I will let this question pass.
the following questions I have answered in the past, so will let the readers give their rejoinders!
Insurance – We are giving the best employer insurance why should we take one more insurance outside?
– I am paying 95K as insurance premium ( L*C endowment most of them ) so my insurance is take care of – but the coverage was just 25L
– Among the CTC post – one question they do not understand or miss most of the time – the employer contribution of PF is part of the 80 C , so they end up doing the Endowment policies to save .
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