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Modes of Investing in Mutual Funds

You can cherry-pick from a slew of investment vehicles for your retirement ranging from National Pension System (NPS), Public Provident Fund (PPF), Insurance Pension Plans, Annuity Plans, and Mutual Funds.

Surprised to see Mutual Funds enlisted? Well, we aren't joking!

Traditional avenues that act as a source of savings may have some limitations in generating the desired cash flows and securing retirement.

Retirement Fund could be an effective option for investors as it is professionally managed by Fund managers with deep expertise in the industry. They offer diversification and has the potential for creating a sizeable retirement corpus. By investing in a Mutual Fund, you benefit from transparency as you can receive regular updates on how the fund is performing. They are well regulated and the fund houses abide by the rules and regulations laid by Securities and Exchange Board of India (SEBI).

While retirement funds have a lock-in period of 5 years, investors can easily purchase and redeem the units of an open-ended mutual fund scheme on all the market days after the lock-in period. And since the fund has a lock-in period, it helps the investor to be invested for a long-term.


You can choose to invest in a Retirement Fund via Systematic Investment Plan (SIP). SIP enables you to invest small amounts of money regularly in a mutual fund scheme at fixed intervals such as weekly, monthly or quarterly. You can decide the investment amount, frequency and tenure based on your financial goals. Alternatively, you can invest a lumpsum amount which is a one-time investment in a Retirement Fund.


You can even choose to switch your investment from an existing scheme to a Retirement Fund. You can opt for a one-time switch or go the Systematic Transfer Plan (STP) route. Just like SIP in STP you can transfer a fixed amount of money regularly from once scheme to another. You can decide the transfer amount, frequency and duration.


Once you have accumulated your desired amount of wealth, you can decide to withdraw/redeem your investment partly or the entire amount. You can choose to withdraw a fixed amount at regular intervals by enabling the Systematic Withdrawal Plan (SWP) facility. You can decide the amount, frequency and the duration for which you wish to withdraw your amount. On the other hand, you can decide to withdraw the entire or part amount by opting for one-time redemption.


You may consider the below steps to plan for your retirement and achieve your financial goals:
  • Set a target retirement age
  • Identify your retirement goals
  • Calculate the amount you will need to meet these goals. Factor inflation into the calculation
  • Invest in the right retirement plan that can help you stay financially prepared to meet your post-retirement goals.

Retirement for everyone is different. This is why, the money you need for your retirement depends on various factors like:
  • Your retirement age
  • Your health and lifestyle
  • Any loans or liabilities
  • The retirement goals you may have
  • Any commitments you may have to fulfil
We can help you find out the amount you may require to invest to maintain your life during retirement with our retirement calculator. Just answer a few basic questions on your income, age, the number of years till you want to retire, your current retirement savings, if any, etc.

Not thinking ahead can hamper your retirement. Some of the decisions like quitting your job before checking on your retirement-plan vesting status, not saving or planning, not maxing out employer matching funds, investment mistakes and poor tax planning can impact your retirement.

You should start planning for your retirement as early as possible. Investing early offers more time for your money to grow and chances to earn higher returns. This helps you stay financially prepared for your post-retirement needs. The amount you need to save for retirement depends on your post-retirement goals. You may want to travel, buy a house, start a new venture and more. You would also want to continue your current lifestyle after retirement and meet medical expenses. Basis these, you can calculate the amount you will need during your retirement. Do not forget to factor inflation into this calculation. Once you have calculated the amount you will need for your retirement, you will be able to calculate the amount you need to save now to stay financially independent during retirement.