How to Plan Your Retirement with Mutual Funds

plan for retirement

Does your job guarantee a post-retirement pension? If not, then planning for your retirement is something that you have to undertake on your own. This requires meticulous long-term investments with prospects of decent growth and return on investment. Here are a few things that come in handy while investing in mutual funds as part of your plan for retirement.

Starting early: 

Retirement planning and saving should start early, preferably by the late 20s or early 30s. Savings made early in life will compound more and result in larger returns. The benefit of compound interest ensures that even a smaller sum invested 10 years early in life can lead to higher returns than a large sum invested late in your life.

Deciding on the retirement corpus: 

The retirement corpus is decided after considering the inflation rate, your probable monthly expenses, your return from investment, and your current income. The inflation rate will give you an idea of the future value of present-day money. Probable post-retirement monthly expenses are generally estimated to be 70-80% of your current monthly expenses. Where you invest will determine how much your savings will grow. And finally, your present income will decide how much you can put aside on your retirement mutual funds.

Suitable mutual funds: 

Traditionally, equity mutual funds have registered the best returns in the long-term horizon. SIP investment in diversified equity mutual funds can see temporary recessions to generate long-term growth in the stock market. Nifty 50, the benchmark of the 50 largest companies in India, stood at around 1600 at the beginning of the year 2000. 21 years later, it is hovering at over 17000 now, thus providing a very promising picture for equity mutual funds investors. Balance your equity investments with sufficient debt mutual funds, gold ETFs, etc., to insulate your investment from market risks.

Your age is an important consideration while investing in mutual funds online. For those starting their retirement planning late, there is limited time to recover from market volatility. Accordingly, the portfolio should be designed to balance debt, equity, and commodities.

SIP and SWP: 

Investing an affordable amount each month through SIP will help you accumulate your retirement corpus. You will benefit from rupee cost averaging during periods of market volatility and also enjoy the long-term power of compounding. A monthly SIP investment of a little over Rs 8,500 at a 12% return can get you nearly Rs 3 crores in 30 years!

A systematic withdrawal plan will help you withdraw amounts from your investments regularly after retirement. Rather than withdrawing the entire maturity amount, you can continue to earn returns on the residual amount by withdrawing your monthly requirement only.


If you are planning to invest for retirement, you will get all the relevant information on mutual funds on the Tata Capital Moneyfy App. Selection of mutual funds and monitoring their performance is made easy and user-friendly on the Moneyfy App. All you have to do is to invest consistently towards your secured future.