ABSL SIP for Life: Plan to build and enjoy your wealth

Aditya Birla Sun Life Mutual Fund (ABSL MF) has introduced a solution designed to support investors through the changing phases of life’s financial journey - the ABSL SIP for LIFE, the erstwhile Sampoorna SIP. By combining the discipline of a Systematic Investment Plan (SIP) and the flexibility of a Systematic Withdrawal Plan (SWP), this offering is crafted to handle both planned aspirations and unexpected needs effectively, making it uniquely positioned as a holistic investment approach for every stage of life.

Why financial planning needs to evolve?

Life brings a mix of predictable goals - like retirement income, children’s education, and recurring expenses (EMIs, travel, household needs) - and unexpected requirements, ranging from sudden medical costs and children’s international education dreams to home repairs and lifestyle upgrades. Inflation, unpredictable events, and the ever-growing expense landscape make it abundantly clear that traditional savings alone aren’t enough. Instead, a dynamic, structured approach is necessary to build wealth consistently and convert it into income as per requirement.

Suggested reading: Steps to achieve financial independence at a desired age

ABSL SIP for LIFE

The SIP for LIFE is a two-phase investment mechanism:

• SIP (Systematic Investment Plan) Phase: Investors contribute a chosen fixed amount regularly (usually monthly) during earning years, building long-term wealth through the power of compounding and financial discipline.


• SWP (Systematic Withdrawal Plan) Phase: After the accumulation phase, the investment seamlessly transitions into regular monthly cash flows, ensuring income support during non-earning phases or retirement.

How does SIP for LIFE work?

The process begins with an investor opting for a tenure - either 8, 10, 12, 15, 20, 25, or 30 years - during which they invest systematically in eligible source schemes. ABSL MF offers flexibility, allowing investors to select from all equity and hybrid schemes (except ABSL International Fund, ELSS Tax Saver), ensuring the choice matches their risk profile and investment objectives. At the end of the investment phase, the accumulated corpus is converted into a regular monthly payout, either from the original source scheme or by transferring the corpus to any available target schemes, including all equity, debt, hybrid, and domestic FOF schemes (other than ABSL ELSS Tax Saver.

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SIP for LIFE investment phases

• Investment (Accumulation) Phase: Fixed SIP contributions for the selected tenure.


• Withdrawal (Cashflow) Phase: Initiation of SWPs as per investor’s preference, with payouts structured as multiples of the original SIP amount - a unique and intuitive feature for long-term planning and predictability.

SWP Facility: Understanding Withdrawals

• SWP allows periodic fixed-amount withdrawals from the corpus, redeeming both capital and appreciation.


• The default SWP amount is applied if no withdrawal specification is made in the application - using the tenure-based multiples for illustrative planning.


• Payouts are processed until the corpus lasts or up to a set future date (like 31 December 2099), subject to the investments available in the selected scheme.

Suggested reading: Retirement planning-Transition and distribution phase

Illustration of SIP for LIFE payouts

Let us suppose an investor chooses a monthly SIP of Rs10,000 for a tenure of 10 years. Upon completion, the default monthly SWP amount would be Rs 20,000 (2x the SIP amount). The default multipliers based on tenures are:

Note: These default multiples only serve as indicative guides, not assured returns - actual cashflow depends on the corpus accrued and lasts only until the available investment corpus is exhausted.

Illustration with SIP + SWP in Aditya Birla Sun Life Flexicap Fund

Source: Advisorkhoj Research. Disclaimer: The above illustration is purely for investor education purpose to explain the concept of SIP for life and should not be construed as an investment recommendation or an assurance of returns. Past performance may or may not sustained in the future. Mutual funds are subject to market risks. Consult with your financial advisor or mutual fund distributor if you need help in understanding how SIP for Life will work for

What are the benefits of investing in SIP for Life?

• Financial Discipline and Growth
  
  The SIP phase helps inculcate savings discipline and harnesses the power of compounding, especially in equity-oriented funds. By staying invested for the long term, investors benefit from market growth and reduce the risk of undisciplined withdrawals.


• Flexibility
  
  
  1. Investors can freely choose the SIP amount and tenure based on present affordability and future aspirations.
  
  
  2. SIP and SWP schemes can be tailored to match risk appetites and life goals, allowing maximum personalization.
  
  
• Goal Matching
  
  
  1. Designed for both planned and unplanned financial needs.
  
  
  2. Offers a ready plan for regular income in retirement or other major stages.
  
  
  3. Its dual-phase structure aligns wealth-generation and cashflow distribution, making it easier to match evolving financial frameworks.


• Wealth-to-Income Transition
  
  SIP for LIFE is engineered to move seamlessly from accumulation to withdrawal, providing monthly cash flow when investors most need it. This harmonization means investors can plan their investment durations and cashflow periods to suit individual needs, from education funding to retirement income.

Why should you choose ABSL SIP for LIFE?

Unique value proposition

• Combines all key mutual fund advantages: compounding, discipline, flexibility, and regular income.


• Offers customized planning to tackle both predictable goals and surprise expenses.


• Enables transformation of savings into reliable monthly income, providing vital security against inflation and unforeseen life events.

Multiple scheme choices

• Source schemes: All equity and hybrid schemes (except for ABSL International Fund, ELSS Tax Saver).


• Target schemes for withdrawals: All equity, debt, hybrid domestic FOF (Fund of Funds) schemes, barring ABSL ELSS Tax Saver - broad investment universe for varied needs.

Simple transition process

Investors can opt for two payout options at the end of the SIP tenure:

• Initiate payouts directly from the source scheme.


• Transfer the corpus to a chosen scheme and begin payouts from there.

This functional flexibility safeguards investor interests and eases the wealth-to-income switch.

Who should consider SIP for LIFE?

ABSL SIP for LIFE is ideal for anyone seeking a holistic, structured, and flexible investment journey:

• Working professionals aiming to secure retirement income.


• Parents planning for educational expenses.


• Individuals needing a reliable cashflow for EMIs, travel, or unexpected family needs.


• Those seeking to combine investment discipline with the assurance of steady post-investment income.

This facility stands as a robust financial tool, helping investors bridge the gap between savings and income, navigate uncertainties, and empower aspirations. In a rapidly changing world, where needs evolve as fast as opportunities, ABSL SIP for LIFE offers one solution that truly fits all - nurturing goals, supporting emergencies, and transforming investments into life-enabling cashflows. Begin your journey with ABSL SIP for LIFE and experience a future shaped through disciplined investing and accessible income.