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Don't Compromise on Liquidity

Don't invest in an ELSS fund after you've exhausted your 80C limit. The lock-in will be unnecessary...

I fall in the 30 per cent tax bracket. I will retire in 4 years. I have already crossed my 80C limit to save taxes, but can I still invest in an ELSS fund for tax-free income after 3 years? I have planned for my retirement via EPF, PPF, debt funds and gratuity.
- Hari Singh

Nothing prevents you from investing in an ELSS fund, but if you're not going to avail the tax benefit, then you'll be locked-in for 3 years unnecessarily. This will be a compromise in liquidity that you can do without. Given that you've 4-5 years to go for retirement and since all your investments are in fixed income, you should opt for a balanced fund. There will be no lock-in and your money will grow with stability. Pick 1 or 2 balanced funds and invest regularly.

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