Financial Planning for Gen Z – Building Wealth in the Digital Age
Born into the digital age, Gen Z is rewriting the rules of financial planning. They demand instant access, seamless experiences, and personalized advice—all at their fingertips. But how can they turn this tech-savvy mindset into real financial success?
Here’s your cheat code to financial success:
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- Digital-First Money Management: Budgeting and investing aren’t just for finance nerds. Apps now make it effortless—track spending, automate savings, and invest with a few taps. Let tech do the heavy lifting while you focus on living your best life.
- Play the Long Game with Smart Investing: Crypto? Stocks? ETFs? Sure, but don’t go all-in on the latest trend. Diversification is your shield—spread your bets to stay in the game for the long haul. Also, don’t let newness override your innate risk taking ability.
- Start Now, Thank Yourself Later: Investing early is like planting a money tree—the longer it grows, the bigger it gets. Even small amounts today can lead to big wins tomorrow.
- Don’t Fall for ‘FinTok’ Hype: Social media is a go-to source for financial advice for most of Gen Z, but not all content is reliable. While platforms like YouTube and TikTok offer insights, personal professional guidance customised to you remains irreplaceable for sound financial decisions. Remember, this world has only one YOU!
- Keep Debt from Owning You: Credit card debt? High-interest loans? They drain your future wealth. Pay off debts fast and avoid financial traps that slow you down. Instant debt does not mean good debt!
(Contributed by Yogesh Gola, Relationship Manager, Advisory Desk, Hum Fauji Initiatives)
SGBs Go Silent: What’s the Next Move for Investors?
For years, Sovereign Gold Bonds (SGBs) have been a reliable choice—offering stable returns, indirect gold investment avenue and tax benefits. But with new issuances literally disappearing now, investors are left wondering: What’s next?
So, such Gold investors are standing at a decision point: one path leads to patience, waiting for SGBs to return, while the other opens doors to new opportunities.
The government’s decision to pause SGBs could be due to rising gold prices, market liquidity concerns, or policy changes. Whatever the reason, investors must rethink their approach.
Smart Alternatives to Consider
- Gold Mutual Funds & ETFs: No lock-in, easy liquidity, and instant redemption —perfect for those who want the benefits of gold without being tied down. What more – small bulk or regular almost-instant purchases are available at a few clicks.
- Secondary Market SGBs: A hidden gem—previous issuances available in the secondary market, though liquidity can be tricky.
- Diversification Beyond Gold: Equities and debt funds can add balance to your portfolio while reducing overdependence on one asset class. With the geopolitical situation stabilising, wealth creation would be stronger if you start now.
What’s the Best Move?
If long-term security is your priority, holding onto SGBs makes sense. If flexibility matters more, gold mutual funds and ETFs ensure you stay invested without being locked in.
(Contributed by Neeraj Singh, Relationship Manager, HNI Desk, Hum Fauji Initiatives)
Maximize Your Term Insurance: Unlock the Power of Riders
A term insurance plan is like a seatbelt—essential, but even better when reinforced with extra protection. That’s where Critical Illness and Accidental Benefit riders come in. These add-ons act as financial airbags, ensuring you and your family are covered when life takes an unexpected turn.
Critical Illness Rider – A Lifeline During Health Crises
A sudden debilitating illness can drain your savings faster than you think. This rider offers a lump sum payout if you’re diagnosed with a serious condition like cancer, heart attack, or stroke. The money can help cover medical bills, home expenses, or even lifestyle changes needed during recovery.
📌 Did You Know? Only 5% to 20% of Indian policyholders opt for a Critical Illness rider, even though treatment for severe illnesses can cost ₹10 lakh or more. Awareness is rising, with demand increasing by 10% post-pandemic. [Source: Financial Express]
Accidental Benefit Rider – Extra Cushion for Unpredictable Events
Accidents can change lives in an instant. This rider ensures: ✅ Your nominee gets an extra payout in case of accidental death. ✅ If an accident causes permanent disability, you may receive monthly financial support to compensate for lost income.
📌 Example: A 35-year-old policyholder who met with an accident was unable to work for months. Thanks to his Accidental Benefit rider, he received regular payouts that helped him cover daily expenses while he recovered.
Why Should You Add These Riders?
✔ Stronger Financial Protection – More than just a basic cover.
✔ Cost-Effective – Riders are cheaper than buying separate policies for those purposes.
✔ Peace of Mind – Stay prepared for unexpected health or accident-related expenses.
(Contributed by Bhawana Bhandari, Financial Planner, HNI Desk, Hum Fauji Initiatives)
What did our clients ask us in the last 7 days
Question – I am 54 years old and will retire in March 2025. I will receive nearly 1.5 crore, including commuted pension, DSOPF, leave encashment, services group insurance cover amount and gratuity. If I receive these funds after March 2025, ie, after the financial year 2024-25, will they be taxable? Since my salary will cease and I will only have pension as my income, I am concerned about the tax implications. Currently, I fall under the 30% tax slab.
Our Reply –
For retiring government personnel, the entire lump-sum retirement package is totally tax-free.
At retirement, an officer usually receives five main benefits:
- DSOPF (Defence Service Officers Pension Fund) – Your accumulated DSOPF, including interest, is completely tax-free.
- AGIF/NGIS/AFGIS – These group insurance schemes provide a maturity benefit consisting of your total contributions, interest, and bonuses—all exempt from tax.
- Leave Encashment – Payment for unused leave is fully exempt from tax for government employees including all armed forces personnel.
- Commuted Pension – You can opt to receive up to 50% of your pension as a lump sum, which remains tax-free under current laws.
- Gratuity – If you have completed more than five years of service, your gratuity is entirely tax-free under Section 10(10)(i).
💡 Important: While these lump-sum benefits are tax-free, your monthly pension after retirement will be taxable based on your income tax slab unless you are also getting any disability pension or are a gallantry medal awardee, in which case your entire pension is tax-free.
With this financial security, you can enjoy your retirement without worrying about hefty tax deductions!
(Contributed by Team Prithvi, Hum Fauji Initiatives)
We manage the retirement funds of the largest number of retired armed forces officers across the Army, Navy, and Air Force. Would you like to join your course-mates, regimental officers, and fellow faujis who already trust us with their finances? Reach our team now.
