NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Retirement Planning Basics
Which of the following is generally a feature of the 'bucket approach' to retirement income planning?
The bucket approach divides the retirement corpus into separate portions matched to different time horizons, such as short-term liquid needs and long-term growth assets. This helps fund near-term expenses safely while allowing the remaining money to stay invested for growth.
- APutting the whole corpus in equity to maximise growth
- BDividing the corpus into portions with different time horizons and asset mixesCorrect
- CWithdrawing only from the pension account and never rebalancing
- DInvesting entirely in a single annuity at age 40
Explanation
The bucket approach splits the corpus by time horizon, for example near-term expenses in liquid or debt assets and longer-term needs in growth assets. The other options describe concentrated or non-diversified strategies.
Did you get it right without looking?
One question tells you little. A timed set on Retirement Planning Basics shows your real accuracy, how long you take and where you lose marks.
More Retirement Planning Basics questions
- Anita is 35 and plans to retire at 60, expecting to live to 85. She needs an annual income of Rs 12 lakh (in retirement-year rupees) at the …
- Mr. Sharma, aged 40, expects current annual expenses of Rs 6,00,000 to continue in real terms. Assuming inflation of 5% a year, the expense …
- In retirement planning, the term 'longevity risk' refers to the risk that a retiree will:
- Ms. Kapoor needs Rs 8,00,000 in the first year of retirement and expects this to grow 6% annually. At retirement she assumes a post-retireme…
- Anita Rao, aged 58, plans to retire at 60 with annual expenses of Rs 10,00,000 at that time (retirement-date rupees). She assumes the corpus…
- Anita, 35, wants a retirement corpus of Rs 2,00,00,000 at age 60. She has no existing savings and expects an annual return of 10% during acc…