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Best Mutual Funds for Retirement Planning

Updated on April 15, 2024 , 3125 views

Retirement planning is one of the important goals in life for which many people look for an efficient Investment plan. Looking at the various advantages of Mutual Funds in the long-run, investors are keen to invest in it. So, here are some of the benefits of planning retirement with Mutual Funds, along with some of the Best Retirement Mutual Funds to invest in.

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Why Mutual Funds?

Here are some of the major benefits of investing in Mutual Funds for retirement planning:

Cost Efficient

The minimum investment amount in Mutual Funds are low and affordable. Most retirement funds start with an investment amount as low as INR 1,000 per month.

Liquidity

Mutual Funds don’t have a lock-in period, which makes your investment flexible. You can liquidate your funds by withdrawing it whenever you wish to. Once you sell the units, it takes less than 2 days for the fund to get credited to your account.
The only fund that has a lock-in is- ELSS Tax Saving Scheme, which is of 3 years, minimum. ELSS comes with the shortest lock-in compared to all other tax saving schemes like PPF, etc.

Beat the Inflation

Inflation is the rate of increase in prices of our day to day needs. This means that you need to invest in an avenue that also grows at par with the inflation rates. Mutual Funds are ideal under such situations. Equities have been able to beat inflation in the past, it also one those Asset Class that can beat the inflation in the future too. While other investment options FDs and PPF aren’t able to beat inflation by a considerable margin.

Tax Efficient

Mutual Funds are more tax-efficient than any other instruments. Short Term Capital Gains (less than 3 years) on Equity Funds attract a tax of 15%, while in non-equity funds STCG is added to your regular Income and taxed as per the income tax slab you fall under. There is not tax on equity funds in Long Term Capital Gains, but non-equity funds gains are taxed at 10% without indexation and 20% with indexation.

Flexibility

Mutual Funds don’t have any restrictions on the regular premium payment, or making partial or complete withdrawals in between. Investors can discontinue their investments or make a partial withdrawal without paying any penalties.

Best Retirement Funds

Best Retirement Mutual Funds for High Risk Takers

These funds are suitable for investors who fall in the age bracket of 25-40 years and are willing to invest for a longer duration, i.e. for at least 10-15 years.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	5 YR (%)	2023 (%)	Sub Cat.
IDFC Infrastructure Fund Growth	₹45.079 ↑ 0.27	₹1,009	16	36.6	77.3	34.9	24.1	50.3	Sectoral
Sundaram Rural and Consumption Fund Growth	₹81.7245 ↑ 0.03	₹1,365	-0.1	8	35.2	18.7	14.1	30.2	Sectoral
DSP BlackRock Natural Resources and New Energy Fund Growth	₹86.126 ↓ -0.08	₹957	13.6	31.3	49.4	24	21.2	31.2	Sectoral
Aditya Birla Sun Life Banking And Financial Services Fund Growth	₹50.88 ↓ -0.16	₹3,023	-1.3	6.5	27.8	16.8	11.5	21.7	Sectoral
Franklin Build India Fund Growth	₹124.018 ↑ 0.19	₹2,149	10.6	31.2	72.3	36.5	23.6	51.1	Sectoral
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 16 Apr 24

Best Retirement Mutual Funds Moderate Risk Takers

These funds are suitable for investors who fall in the age bracket of 41-50 years and are willing to invest for at least 5-10 years more.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	5 YR (%)	2023 (%)	Sub Cat.
SBI Bluechip Fund Growth	₹79.6976 ↓ -0.26	₹43,355	1.5	10.7	25.2	15.7	15	22.6	Large Cap
Essel Large Cap Equity Fund Growth	₹30.7626 ↑ 0.20	₹96	-8	-14.5	-2.6	10	7		Large Cap
Aditya Birla Sun Life Frontline Equity Fund Growth	₹450.22 ↓ -2.57	₹26,480	2.2	14.1	30.2	17.1	14.5	23.1	Large Cap
JM Core 11 Fund Growth	₹17.919 ↓ -0.02	₹85	5.4	19.9	48.7	21.7	13.7	32.9	Large Cap
Nippon India Large Cap Fund Growth	₹78.3847 ↓ -0.23	₹22,767	5.2	18.4	42.1	25.3	16.9	32.1	Large Cap
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 16 Apr 24

Best Retirement Mutual Funds for Average Risk Takers

Investors who are above 50 years of age would prefer Investing in low-risk funds. Thus, these funds are safer to invest.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	5 YR (%)	2023 (%)	Sub Cat.
PGIM India Short Maturity Fund Growth	₹39.3202 ↓ 0.00	₹28	1.2	3.1	6.1	4.2	4		Short term Bond
UTI Short Term Income Fund Growth	₹28.809 ↓ -0.01	₹2,503	1.9	4	7.2	7	5	6.9	Short term Bond
ICICI Prudential Short Term Fund Growth	₹54.482 ↓ -0.02	₹18,987	1.7	3.7	7.4	5.8	7.1	7.4	Short term Bond
Nippon India Short Term Fund Growth	₹47.6957 ↓ -0.02	₹5,986	1.7	3.8	6.9	5.3	6.5	6.8	Short term Bond
Aditya Birla Sun Life Short Term Opportunities Fund Growth	₹43.0526 ↓ -0.02	₹7,275	1.7	3.8	6.8	5.5	6.8	6.9	Short term Bond
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Sep 23

Mutual Fund Calculator for Retirement Planning

Retirement calculator is one of the ideal ways to estimate your retirement savings. This calculator estimates the amount of money that you need to save for your post-retirement, as per your lifestyle. While using the retirement calculator, you would need to fill variables like current age, the age that you wish to take your retirement, regular expenses, inflation rate and the expected long-term growth rate on investments (or equity markets etc.). The sum of all these variables will help you to calculate the amount that you would need to save monthly for your retirement.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.