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    Things to consider before using your retirement corpus to fund your startup

    Last Updated On 19-02-2020

    Everyone has their unique ideas and dreams, no matter their age. And if you were to ask a growing number of professionals today about their post-retirement plans, you are likely to hear an interesting answer: launching their own startups. This is unsurprising, given that we live in the age of the entrepreneur and the many opportunities that will be available for startups to grow and thrive in the future as well.

    However, when looking at this dream practically, the age-old question pops up: how will you finance this post-retirement startup? In the absence of a regular income and with the constant need for funds for your new business, most people might be tempted to go for their retirement savings. Here are some essential points for your consideration before doing so. 

    The Challenge: Using retirement corpus for your startup

    While you are still generating a regular income, you are likely to save up enough money in the retirement corpus of your choice for a rainy day. Which is why it is natural to resort to this corpus - be it your EPF or PPF - to fund your dream of launching and running your own startup. After all, this is exactly the kind of opportunity that you had financially saved up for, right? 

    However, while a corpus for retirement is generally created to save up for a number of purposes, planning for a new business is quite a different ball game altogether. Consider this: your retirement corpus might be perfect for your post-retirement life and the many needs that might pop up at that time. This corpus would help you live comfortably in your own house, provide for your lack of income by paying the necessary bills and making all required payments. 

    However, this retirement corpus might not be well-suited to meet the demands of a new business venture as well as the many risks that come with it. After all, in most cases, startups do not generate a profit in their first year. Some might even go without profit for up to three to five years. This means that not only will your startup require constant financial inflow, it might also fail to generate any income for you for a considerable amount of time. Your EPF or PPF retirement corpus is not equipped to deal with these types of financial risks and in the absence of an income, you might find yourself falling deeper into debt.

    Moreover, you might find that prematurely withdrawing your corpus for retirement via PPF or EPF might pose a certain challenge. While these funds are eligible to be withdrawn for specified purposes such as financing education plans or the marriage of someone in your family, they are restricted from being withdrawn for other purposes. These include funding a post-retirement startup. 

    The Solution: What you can do instead

    Of course, the challenges presented above should not discourage you from following your post-retirement dreams. After all, they are merely a word of caution against using your corpus for retirement to fund your dream startup. Hence, rather than seeking your EPF or PPF as a source of finances for your business venture, it is ideal to preemptively invest in a separate retirement plan instead. 

    Retirement plans are typically accumulated funds that you can build up over time, much like your EPF and PPF corpus. Moreover, these plans come with an additional benefit of insurance coverage as well. These plans are a great resource for you to invest monthly premium payments into and allow them to accumulate over time. You can even pay a lump sum investment at once and watch it grow over the remaining accumulation period. 

    The corpus generated at the end of the retirement plan is certain to provide you with the financial independence you need to make post-retirement decisions such as launching your own startup. Your other retirement corpus, such as PPF or EPF can serve as a safety net to take care of your regular post-retirement needs. Meanwhile, retirement plans can offer you the financial freedom you enjoyed while you were still a salaried individual and fund your business without placing your future in jeopardy. 

    Apart from investing in a retirement plan, it is also essential to avail a term insurance plan in order to safeguard your family’s future and their financial needs. To know more about Life Insurance, browse the website for various Term Plans offered by PNB MetLife. 


    *Tax benefits are subject to conditions and other provisions of the Indian tax laws and are subject to amendments made thereto from time to time.


    The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.

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    As your trusted life insurance partner, PNB MetLife is with you amidst the current COVID-19 outbreak. Our policies also cover COVID-19 Claims. In case of a Death Claim, kindly submit the signed Claim Intimation Letter mentioning the policy number, brief of the insured event and other claim documents on the email mentioned herewith. Please write-in to us at or You can also call us on 1800-425-6969 for death claims intimations and for any queries on Monday - Saturday between 10:00 am - 7:00 pm.

    PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance PlansTerm PlanProtection PlansLong Term Savings Plans , Retirement Plans & Child Education Plan.

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