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How To Plan Your Retirement With Mutual Funds?

Published On Jul 07, 2021, Updated On Jul 08, 2021

We all have to go through the phase of retirement sooner or later in life. Although we may take it lightly in our youthful job years, life circumstances raise the issues and cause us to worry as we grow old. Our lifestyles certainly need a stable future when revenue flows are progressively declining and increasing inflation could make it difficult to match our expenses. It is certainly an important financial objective to prepare for retirement. 

And to this end, you can use mutual funds to arrange your pension as mutual funds are a better option in terms of profit, keeping aside your risk appetite. You have to understand the types of funds that you can choose based on your demands, your appetite for risk, your investment period, etc in order to plan your retirement using mutual funds. 

Best Types of Mutual Funds For Retirement Planning

Some of the retirement mutual fund kinds are:

  • Diversified Equity Funds

The Diversified Equity Funds are aggressive in investments as here you invest in several types of stock funds. It can make you high returns, but it is also very hazardous like every plan. In the long term, stocks perform well and make a terrific investment fund when you start investing at an early point in life so that you can tolerate little fluctuations, if any. 

  • Thematic Or Sector Funds

Thematic or Sector based mutual funds become increasingly tailored to the sector in which you want to invest and are very risky. There is a mid-size, tiny and very small cap stock choice that is suitable for ambitious investors. These funds are economically sensitive and a new performance leader is established each year thus making it more and more profitable with time.

You may also like to read:- Key Retirement-Planning Steps Everyone Should Take  

  • Asset Allocation Funds

Asset Allocations Funds are a fund with a diversified portfolio of investments, including local and foreign equities and bonds, government securities, gold bullions and immovable inventories. Some of these funds maintain relatively stable proportions assigned to each industry while others modify the mix in accordance with opportunities and threats.

  • Systematic Investment Plan (SIP)

The initial step towards retirement planning could be to initiate the Systematic Investment Plans (SIP) at the early stages of your life. You can invest a specific amount periodically through SIP at regular intervals to achieve more benefits through compounding power over a period of time. SIP is one of the best ways in which pension planning can be invested. By using SIP, you can invest from monthly savings to self-debit from your savings bank account in the shared fund system of your choice based on your investment and risk appetite. SIP can be controlled as it makes you control and invest your spending habits on a monthly basis.

  • ELSS Funds

ELSS is an equity based mutual fund plan. This is not only your long term investment plan but also acts as a tax saving strategy. ELSS also provides you with diverse equity funds, but has a three year lock-in period and may also be subject to tax deductions. Thus both capital gains and dividends are tax-free under section 80C. These also lead to improved rates of return in the interest of tax savings, as equity is related.

Also Read:- Factors to Consider When Buying Retirement Plans 


There are a large number of strategies for mutual funds. Information on the manager of the fund, investing objective, techniques, results from the past, dangers, etc.. Pension plans, on the other hand, are not as transparent as mutual funds may be a more profitable option for retirement planning but risk factors should also be duly considered before investing. 


Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.                    

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