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​Smart Retirement Planning with mutual fund

Usually, for most of us having an EPF or a separate PPF account is more or less our action plan for our retirement. In a world where our everyday lives have evolved from that of our parent’s, these kind of savings have now become very outdated. For the upcoming retiring generation solely retiring on EPF is often looked at as lack of pension after retirement. If one does not accumulate enough wealth for their retirement, there are chances that one won’t be able to sustain themselves post retirement, solely with the interest from income saved.

According to surveys, more than 75% of households in developed countries like United States are investing Mutual Funds for post-retirement income. So, why are Indian hesitant about such an investment? Let’s see how mutual funds can help you plan your retirement smartly.

  • While investing for retirement, make sure that you have a reasonable amount of exposure to equities in the initial years of investment, and slowly move them to debt funds or other conventional saving options. This process of shifting can start even 5 years before your retirement, if you have been investing for around 15-20 years. Also, for an investment for as much as 15 years or over, the chances of getting negative returns from the stock market are minimum. So, your money may stays and also equity usually gives market linked returns.

  • Try to rebalance your fund portfolio each year. This means that you should move around the proportion of debt, equity & gold in your portfolio regularly. A diverse kitty gives much need exposure to different kinds of asset categories like EPF, PPF, and other debt options and of course mutual fund.
  • If you have mutual funds post retirement, don’t depend on them entirely for dividends, for monthly income. Incorporate the Systematic Withdrawal Plan (SWP) to create your very own annuity plan. These are a very tax-efficient option, if debt funds are held for over a year.
  • The mutual fund portfolio for your retirement plan can survive without a fancied sector or a particular theme. If you as an investor do wish for such an exposure, you should limit the same to 10% and should make sure to exit of such theme a few years before your retirement.

Following the above pointers can definitely help you in planning your retirement fund basket without a burning a hole in your pocket. Before making any investments, lease seek your investment advice from financial advisor.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. Certain factual and statistical information (historical as well as projected) pertaining to Industry and markets have been obtained from independent third-party sources, which are deemed to be reliable. It may be noted that since NAM INDIA (Formerly known as Reliance Nippon Life Asset Management Limited) has not independently verified the accuracy or authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been processed or arrived at; NAM INDIA (Formerly known as Reliance Nippon Life Asset Management Limited) does not in any manner assures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect NAM INDIA’s (Formerly known as Reliance Nippon Life Asset Management Limited)views or opinions, which in turn may have been formed on the basis of such data or information.

Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.


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