Retirement Mutual Funds
Retirement mutual funds in India are a specially designed investment scheme wherein investors can multiply wealth for their post-retirement life. This helps them use the fund as a pension for various day-to-day expenses. Investors can ensure a regular income source when they retire and the salary income is no longer available. Explore some of the top funds in this category here.
What Is a Retirement Mutual Fund?
Retirement mutual funds are often termed pension funds as they help investors accumulate wealth for their post-retirement life. These funds help you earn a stable income as a regular annuity after 60 years. Usually, the investment portfolio of these mutual fund retirement plans includes low-risk assets such as government securities wherein investors can earn secured returns. As an investor, you can use your retirement corpus for various purposes such as regular expenses, medical emergencies and travel.
Factors to Consider While Investing in Retirement Mutual Funds
You need to consider the following factors while investing in a mutual fund retirement plan:
- If you are investing in a retirement mutual fund, ensure you define the investment goal such as the lifestyle after retirement, healthcare and travel plans and the period of investment.
- Ensure you select the right method of receiving the payment such as a lump sum or periodic payout.
- Considering the past performance of the fund can help you anticipate the potential future returns.
- Evaluate the actual returns as these returns are taxable.
- To assess the risk and volatility of a retirement fund, examine its asset allocation. Check how much is invested in equities for growth, debt instruments for stability and alternative assets for diversification.
- Note the lock-in period, if any while investing, as it determines the liquidity of your invested amount.
Benefits of Investing in Retirement Mutual Funds
You can reap the following benefits by investing in retirement mutual funds:
- You can earn income after retirement from these mutual funds.
- Investing in these funds helps you avail tax benefits for instance under Section 80CCC of the Income Tax Act.
- You can reap the benefits of compounding returns on investment.
- Investing in these mutual funds can help you invest in stocks with a managed portfolio by experienced fund managers.
An Overview of Best Mutual Funds for Retirement
Here are the important details about some of the best retirement mutual funds:
1. HDFC Retirement Savings Fund
HDFC Retirement Savings Fund invests 80% of its portfolio in equity or equity-linked instruments. The minimum amount to start a SIP (Systematic Investment Plan) in this fund is ₹100.
- Asset Under Management: ₹5,571.31 crore approximately
- Expense Ratio: 0.85%
- Benchmark: Nifty 500 Total Returns Index
2. UTI Retirement Fund
The minimum amount of investment in the UTI Retirement Fund (Direct Growth) is ₹500. If you redeem this investment before 1 year, a 1% exit load applies.
- Asset Under Management: ₹4,424.75
- Expense Ratio: 1.04%
- Benchmark: CRISIL Short Term Debt Hybrid 60 + 40 Fund Index
3. Nippon India Retirement Fund
Nippon India Retirement Fund (Direct Growth) invests 97.91% in shares of Indian companies. It includes 61.99% large cap stocks, 10.31% mid cap stocks and 4.78% small cap stocks.
- Asset Under Management: ₹2,849.23 crore approximately
- Expense Ratio: 1.03%
- Benchmark: BSE 500 TRI
4. SBI Retirement Benefit Fund
SBI Retirement Benefit Fund (Direct Growth) invests 53.72%, 15.12% and 10.51% in large, mid and small cap stocks of domestic equities. In addition, 0.45%, 0.04% and 0.41% of investments are in debt, government securities and low-risk securities respectively.
- Asset Under Management: ₹2,493.6 crore approximately
- Expense Ratio: 0.97%
- Benchmark: BSE 500 TRI
5. Tata Retirement Savings Fund
Tata Retirement Savings Fund (Direct Growth) does not charge any exit load if you redeem after 60 years, which is the retirement age. However, an exit load of 1% applies in case there is an auto switch out before 61 months from the date of investment.
- Asset Under Management: ₹171.26 crore approximately
- Expense Ratio: 0.97%
- Benchmark: CRISIL Short Term Debt Hybrid 72 + 25 Index
Key Takeaway
Retirement mutual funds in India in 2025 help investors earn stable income even after retirement. The compounding effect of returns from these funds multiplies the invested amount to help investors earn higher income. The equity and debt component of these funds stabilises the income of senior citizens after retirement. As an investor, you can start investing early in these funds to accumulate an adequate amount for your post-retirement life.
Frequently Asked Questions
1. Why is mutual fund investing a good idea for retirement?
Retirement mutual funds help you grow your wealth through compounding returns over the years. As a result, you can use the fund after retirement when you do not have a regular salary as income. You can use the fund to meet your financial needs.
2. Who should invest in retirement mutual funds?
Retirement funds are ideal for investors looking for wealth accumulation for post-retirement life. As an investor, you can start your investment at an early age to reap the benefits of high returns through the power of compounding.
3. How much money should I invest in retirement mutual funds?
The amount of money you invest in retirement funds depends on your present financial situation. In addition, you need to calculate the corpus you need after retirement to determine the present investment amount. You can use a retirement mutual fund calculator to calculate the amount you need to invest at present to build the necessary corpus for port-retirement life.
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