Posted on 2/7/2023 1:02:00 PM

Investment is done with a goal or a purpose, and everyone has a diverse set. The majority of the savings are done to secure the future. It is crucial to save a part of your income for your retirement as retirement funds. You will not be earning an active income as much as you do now, once you retire. Therefore, a Retirement Fund plays a very vital role in everyone’s life. Each one should plan for the future and contribute some cut of their income towards it. With an ample number of investment options available, you can save for your retirement. Mutual funds offer one such investment approach, known as Retirement Mutual Fund Scheme, which could be a great option for helping you safeguard your future.

What are Retirement Mutual Fund Schemes?

A retirement mutual fund Scheme is an open-ended retirement solution-oriented scheme. These schemes usually have a lock-in for at least 5 years or till retirement age, whichever is earlier. These schemes may help secure your future and save for retirement. They majorly invest in low-risk investments such as government securities to secure a steady income. The primary purpose of a retirement fund is to provide a steady income after retirement. Furthermore, it can help accumulate a retirement corpus taking into consideration the growing inflation. You can invest in these funds via lump sum mode or SIP.

Why Mutual Fund?

● Flexibility

With a mutual fund retirement plan, you do not have to compulsorily opt for an annuity payout. Here, you get a choice to withdraw the fund amount in either lump sum or monthly payouts depending on your financial requirements and goals.

● Transparency

Several measures have been introduced by SEBI to make mutual fund investments more transparent and investor-friendly. Fund categorization and risk-o-meter are one of those that strived at making investing in mutual funds more transparent.

● Wide option

With mutual funds, you can invest in a range of funds as per your post-retirement requirements. If you are beginning early, you can choose equity funds to build your retirement corpus. Once you are near your goal, you can shift from equities to debt to cover the gains from deteriorating due to market fluctuations.

● Diversification

With mutual funds, you can diversify your portfolio. Your money is invested across diverse companies in various sectors. Diversification might help balance the risk and reward equation.

Choosing the Right Retirement Plan

You need to do some research before purchasing a mutual fund Scheme in order to find which Scheme is most suitable for you. Below are the things you need to keep in mind while doing the research:

● Fund goal: According to what you are looking for, investment growth or stable savings, you can choose to invest in equity funds, debt funds, hybrid funds, value funds, and so on. With several options available in the market, you can aim to achieve diversification and capital growth.

● Long-term performance: Before investing in a Scheme for constructing a retirement corpus, ensure its long-term performance. Understand how the Scheme has been able to hold downsides when markets haven’t been performing well.

● Risk tolerance: As an investor, you must have a risk level that you are at a relief with. There are some people who are overcautious, some are prudent, and many are aggressive risk-takers.

● Fees and charges: Make a comparison of the exit and entry loads, management fees, redemption fees, etc. between different Schemes before purchasing one.

Retirement planning should be one of the crucial financial preferences during our working lives. Constructing your retirement corpus and portfolio with mutual funds is an easy and manageable process. Get started at the earliest as it will give you more time for your money to grow and also make changes halfway in case things are not to your liking. Also, you should discuss how to utilize mutual funds for retirement planning with your financial advisors.


An investor education initiative by ICICI Prudential Mutual Fund

Visit to know more about the process to complete a one-time Know Your Customer (KYC) requirement to invest in Mutual Funds. Investors should only deal with registered Mutual Funds, details of which can be verified on the SEBI website For any queries, complaints & grievance redressal, investors may reach out to the AMCs and/or Investor Relations Officers. Additionally, investors may also lodge complaints on if they are unsatisfied with the resolutions given by AMCs. SCORES portal facilitates you to lodge your complaint online with SEBI and subsequently view its status.

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

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