List of 20 Best Mutual Funds for Retirement

It is estimated that 12.5% of the Indian population will be older than 60 years by 2030. This number could increase to around 20% by 2050. Retirement is a reality that most working professionals must face and only a third of them are actually prepared for it.   

One way to prepare for life after retirement would be to invest in a passive income generating option like mutual funds. However, choosing the right mutual funds is very important. In this blog, we will look at 25 mutual funds that can help you create wealth for the future. These funds are currently being recommended by our wealth advisor, Wealth First.

NOTE: This blog assumes you are starting your investments for retirement now while your retirement date is still a few decades away. If you are a retired professional or if your retirement is due in a few years please Speak To A Cube Wealth Coach and get guidance.

About Wealth First

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Why Invest In Mutual Funds For Retirement? 

A mutual fund is a pool of money collected from several investors. This pool of money is handled by a Fund Manager with superior industry experience. 

The fund manager invests the pool of money in various investment options like stocks, bonds, debt, and more. Some benefits of mutual funds include:

1. Professional management

2. Diversification

3. Low minimum investment amount

4. Lucrative long term returns

5. Post-tax returns that can beat inflation 

6. Risk-based investment options

Historical mutual fund returns indicate the potential for high returns. For example, 77 mutual funds out of a possible 168 have produced positive double-digit SIP returns since 2010.

Now that you know the benefits of investing in mutual funds, let’s look at the top 25 mutual funds for retirement.

Top 20 Mutual Funds For Retirement

Top 3 Liquid Funds For Retirement

1. ICICI Prudential Liquid Fund

2. Axis Liquid Fund 

3. Kotak Liquid Fund

Top 4 Debt Funds For Retirement

1. IDFC Banking & PSU Debt Fund

2. HDFC Ultra Short Term Fund

3. Axis Banking and PSU Debt Fund

4. IDFC Dynamic Bond Fund

Top 2 Conservative Funds For Retirement

1. Motilal Oswal Focused 25 Fund

2. Mirae Asset Large Cap Fund

Top 4 Moderate Funds For Retirement

1. Axis Focused 25 Fund

2. Invesco India Contra Fund

3. Kotak Equity Opportunities Fund

4. Canara Robeco Emerging Equities Fund

Top 4 Aggressive Mutual Funds For Retirement

1. Axis Small Cap Fund

2. Kotak Emerging Equity Fund

3. Motilal Oswal Midcap 30 Fund

4. ICICI Prudential Smallcap Fund

Top 3 International Mutual Funds For Retirement

1. Edelweiss Greater China Equity Off-shore Fund

2. Franklin India Feeder - Franklin U.S. Opportunities Fund

3. Invesco Pan European Equity Fund

Note: All facts and figures are updated as of 03/12/2020.

While we update our pages regularly, we suggest you Download the Cube Wealth app for the latest list of the best mutual funds.

How To Choose The Right Mutual Fund For Retirement?

Here are a few pointers to help you choose mutual funds that can meet  your post-retirement expenses:

1. Identify your retirement investment goals

2. Evaluate the risk

3. Analyze the returns

4. Learn more about the fund manager

5. Check the entry and exit load

6. Pay attention to taxes

7. Speak to a Cube Wealth Coach

If you’re planning to invest in mutual funds for retirement, you need to strike a balance between aggressive and conservative investing. If you are relatively young, you could invest using an aggressive strategy in options like equity mutual funds or international mutual funds. 

As you get closer to retirement, you can progressively rebalance your portfolio to a relatively conservative and safe strategy. This is the risk to returns trade-off that you need to manage for higher returns in the future. 

A high risk or low risk strategy would depend on your age, liabilities, responsibilities, and more factors. Speak to a wealth coach for a free consultation to help you understand a suitable investment strategy.

How Can You Invest In Mutual Funds For Retirement?

You can invest in mutual funds in 2 ways:

1. Offline

• Go to a fund house, bank or mutual fund distributor/agent. 
• Fill out the KYC papers.
• Complete the in-Person Verification (IPV).
• Select the desired mutual fund scheme.
• Submit the application form for the mutual fund.  

2. Online

• Download the Cube Wealth app
• Complete your KYC 
• Talk to our Wealth Coaches
• Get advice on buying 
• Build a perfect portfolio
• Get advice on selling
• Think long term

In-App Guide: Quick SIPs for MF

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Summary

You can use the interest generated by your mutual fund investments to pay for your expenses after retirement. Historical records indicate that you can even sell the funds for a profit depending on market conditions. This could be a useful option if you need to finance a sudden or unexpected expense post-retirement.

But the key is to start investing today to build a perfect portfolio that can generate passive income for you after retirement. To invest in the right mutual funds for retirement, download the Cube Wealth app or speak to a wealth coach to get started. 

FAQs 

1. Are there any tax advantages to using mutual funds for retirement? 

Ans. Some retirement accounts, like 401(k)s and IRAs, offer tax advantages when investing in mutual funds. These accounts can provide tax deferral or tax-free growth, depending on the account type.

2. Is it advisable to invest in actively managed or passively managed (index) funds for retirement? 

Ans. Both actively managed and index funds can have a place in a retirement portfolio. The choice depends on your investment philosophy and fee considerations.

3. Should I make changes to my retirement mutual fund portfolio as I get closer to retirement age?

Ans. It's often recommended to adjust the asset allocation of your portfolio as you approach retirement, shifting towards a more conservative stance. Regular reviews and adjustments are essential.

4. Are there penalties for withdrawing money from retirement mutual funds before the designated retirement age? 

Ans. Withdrawing money from retirement mutual funds before the designated retirement age, especially from tax-advantaged accounts, can result in penalties and tax consequences. Consult with a financial advisor to understand the rules and implications.

Conclusion

Selecting the best mutual funds for retirement is a critical step in securing your financial future. The 20 mutual funds listed in this guide offer a variety of options to help you build a well-diversified retirement portfolio. When choosing these funds, consider factors like your retirement goals, risk tolerance, and investment horizon. Diversification is key to managing risk and achieving a balanced portfolio that can withstand the challenges of retirement planning. Periodic reviews and adjustments are essential to ensure your investment strategy aligns with your changing financial needs and the evolving market conditions. It's also wise to consult with a financial advisor to receive personalized guidance and maximize your chances of a comfortable and financially secure retirement.

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