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Armed forces personnel must secure their finances for a comfortable retired life

In addition to provident fund, have an exposure to equities early in your career for long-term wealth creation so that you do not have to diminish your corpus for one-off expenses like weddings and a child’s higher education.

August 16, 2022 / 12:29 PM IST
The Indian Army

The Indian Army

Eternal vigilance is the price of liberty. Our armed forces guard our borders so that the nation can sleep in peace. But in the process they often end up neglecting their finances.

Regular transfers and a high-stress job that demands a lot, both mentally and physically, leaves little time for money matters. While their lifelong medical requirements are taken care of, other aspects of their finances get neglected. Many fall prey to mis-selling by unscrupulous agents that saddle them with expensive life insurance policies.

Take the case of Gurugram based Colonel Purushottam Kumar (retd.). He retired from the army in 2015 after three decades of service. In 2001, he was mis-sold a Unit Linked Insurance Plan (ULIP). The premium allocation charge (charges deducted by the insurance company towards the agent’s commission and other charges, the rest being invested in the policy) was 20 percent. Compared to this, mutual funds charge only about two percent.

Kumar has been managing his own investments since 1991. He prefers doing his own research and investing in equities and mutual funds. Aside from his ULIP fiasco, he says he has managed his investments “quite well.”