Hi friends, hope you are doing well, today we will talk about Best Retirement Mutual Funds 2023 – If you are retiring after 20 years from today, have you ever thought that how much fund will be required then? According to which inflation is increasing, for future financial security after 20 years, a large amount should be in hand, whose value can be 2 crores or more. Generally, people invest in popular investment instruments like NPS, PPF or FD for retirement. Apart from this, his retirement fund is also a big support. But for the last few years, experts have been advising to invest in mutual funds for this. He says that if the right mutual fund is chosen for 15 to 20 years, then PPF can benefit many times as compared to FD. At the same time, after 20 years, all the post-retirement needs can be met from the value of the investment.
AK Nigam, Director, BPN Fincap, says that there is some risk in mutual funds as compared to PPF or FD, but this risk is completely covered if the investment is aimed for the long term. At the same time, the way interest rates are coming down in FDs or such savings schemes, this has made mutual funds more attractive. Investors should keep largecap, multicap, large and mid cap as well as midcap funds in their portfolio. If we look at the performance of the last 20 years, there are many such funds, which have given returns up to 30 times during this period. He says that instead of a lump sum amount in these schemes, the route of SIP should be chosen.
Retirement planning is an essential part of our lives. Not many people start their retirement planning at a young age, but it is important because it takes longer to build up a retirement corpus. Ideally, one should start their retirement planning at 20 as this gives ample time to save.
Why Mutual Funds for Retirement Planning?
Mutual funds are considered a smart tool for planning, financial goals like retirement, a child’s education, purchase of a house/car, traveling the world, etc. Mutual funds are specially designed to suit the various investment needs of the people. Investors can take multiple funds from mutual fund schemes such as equity, debt, and hybrid funds. The Security and Exchange Board of India (SEBI) has recently introduced a separate category named ‘Solution Oriented Schemes’ which majorly includes retirement and child investment plans.
SEBI has given a separate category for these schemes so that investors can plan their retirement in a disciplined manner. These solution oriented retirement plans come with a fixed tenure of 5 years or till retirement. It is a good way for investors to invest for a long period of time to achieve their retirement investment goals. Investors who are willing to invest in this scheme, here are some of the schemes that you can consider Investing in.
Here we select some best company for mutual funds, best companies to invest in mutual funds
Best Retirement Mutual Funds – Solution Oriented Schemes
| Fund | NAV | Net Assets (Cr) | 3 MO (%) | 6 MO (%) | 1 YR (%) | 3 YR (%) | 5 YR (%) | 2020 (%) | Sub Cat. |
|---|---|---|---|---|---|---|---|---|---|
| Tata Retirement Savings Fund-Moderate Growth | ₹45.4943 ↑ 0.33 | ₹1,572 | 12.5 | 24 | 37.7 | 18.5 | 14.3 | 15.1 | Retirement Fund |
| Tata Retirement Savings Fund – Progressive Growth | ₹46.1273 ↑ 0.40 | ₹1,196 | 14.2 | 27.7 | 43.7 | 20.9 | 16 | 14.4 | Retirement Fund |
| Tata Retirement Savings Fund – Conservative Growth | ₹25.386 ↑ 0.07 | ₹177 | 4.8 | 9.1 | 13.6 | 11 | 8.4 | 11.8 | Retirement Fund |
| HDFC Retirement Savings Fund – Equity Plan Growth | ₹30.125 ↑ 0.25 | ₹1,835 | 11.7 | 36 | 72.9 | 24.3 | 17.5 | 18.3 | Retirement Fund |
| HDFC Retirement Savings Fund – Hybrid – Debt Plan Growth | ₹16.387 ↑ 0.03 | ₹134 | 2.3 | 6.4 | 13.2 | 9.7 | 7.7 | 10.4 | Retirement Fund |
| Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 14 Oct 21 |
Best Retirement Mutual Funds – Risk Wise Wise
Investors who wish to invest in Equity, Debt or Balanced Funds, can invest in these funds with risk appetite.
Best Retirement Mutual Funds for Aggressive Investors
These funds are Equity Funds that invest in the shares of companies. Equity funds are considered to be a good option for long term investments and for those who are ready to take high risk in mutual funds. Ideally, investors who fall in the age group of 25-40 years and are willing to invest in these schemes for at least 10-15 years.
| Fund | NAV | Net Assets (Cr) | 3 MO (%) | 6 MO (%) | 1 YR (%) | 3 YR (%) | 5 YR (%) | 2020 (%) | Sub Cat. |
|---|---|---|---|---|---|---|---|---|---|
| L&T Emerging Businesses Fund Growth | ₹45.682 ↑ 0.20 |
₹7,248 | 16.1 | 48.7 | 109.4 | 24 | 19.6 | 15.5 | Small Cap |
| IDFC Infrastructure Fund Growth | ₹24.52 ↑ 0.21 |
₹655 | 9.1 | 35 | 108.5 | 19.9 | 14.4 | 6.3 | Sectoral |
| DSP BlackRock Natural Resources and New Energy Fund Growth | ₹56.058 ↑ 0.53 |
₹735 | 9.3 | 25.7 | 100.7 | 20.9 | 17.2 | 11.5 | Sectoral |
| Franklin Build India Fund Growth | ₹66.971 ↑ 0.72 |
₹1,077 | 13.9 | 37.4 | 97.1 | 22.2 | 15.4 | 5.4 | Sectoral |
| Aditya Birla Sun Life Small Cap Fund Growth | ₹58.7711 ↑ 0.37 |
₹2,923 | 11.6 | 38.5 | 95.7 | 21 | 13.3 | 19.8 | Small Cap |
| Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 14 Oct 21 | |||||||||
Best Retirement Mutual Funds for Moderate Investors
These funds are suitable for investors who fall in the age range of firmware years and are willing to invest for at least 5-10 years. These are hybrid funds, i.e. a mix of debt and equity funds. It is a good option for investors who want to earn long-term returns through equities, as well as regular income through debt securities.
| Fund | NAV | Net Assets (Cr) | 3 MO (%) | 6 MO (%) | 1 YR (%) | 3 YR (%) | 5 YR (%) | 2020 (%) | Sub Cat. |
|---|---|---|---|---|---|---|---|---|---|
| Aditya Birla Sun Life Equity Hybrid 95 Fund Growth | ₹1,116.48 ↑ 7.97 |
₹8,154 | 11.3 | 23.3 | 49 | 16.4 | 11.5 | 11.7 | Hybrid Equity |
| Principal Hybrid Equity Fund Growth | ₹116.75 ↑ 0.94 |
₹1,120 | 14 | 25.3 | 48.1 | 16.9 | 14.7 | 16.3 | Hybrid Equity |
| Aditya Birla Sun Life Regular Savings Fund Growth | ₹50.2521 ↑ 0.09 |
₹1,244 | 4.8 | 9 | 22.8 | 10.6 | 7.6 | 9.2 | Hybrid Debt |
| SBI Debt Hybrid Fund Growth | ₹52.98 ↑ 0.14 |
₹3,890 | 5.2 | 10.9 | 21.6 | 12.8 | 8.5 | 13.5 | Hybrid Debt |
| Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 14 Oct 21 | |||||||||
Best Retirement Mutual Funds for Conservative Investors
Investors above 50 years of age would prefer to invest in a conservative scheme, that is, funds that carry a low level of risk. These are debt schemes that provide stable returns.
| Fund | NAV | Net Assets (Cr) | 3 MO (%) | 6 MO (%) | 1 YR (%) | 3 YR (%) | 5 YR (%) | 2020 (%) | Sub Cat. |
|---|---|---|---|---|---|---|---|---|---|
| HDFC Corporate Bond Fund Growth | ₹25.7445 ↓ 0.00 |
₹27,568 | 1.6 | 2.9 | 5 | 9.3 | 7.9 | 11.8 | Corporate Bond |
| PGIM India Short Maturity Fund Growth | ₹36.3046 ↓ -0.01 |
₹41 | 1 | 2.4 | 3.6 | 3.9 | 4.7 | 7.8 | Short term Bond |
| Aditya Birla Sun Life Corporate Bond Fund Growth | ₹88.6389 ↑ 0.02 |
₹24,413 | 1.4 | 2.8 | 5.2 | 9.2 | 8 | 11.9 | Corporate Bond |
| Aditya Birla Sun Life Savings Fund Growth | ₹432.348 ↑ 0.04 |
₹18,973 | 1 | 2.1 | 4.2 | 6.9 | 7 | 7 | Ultrashort Bond |
| Baroda Pioneer Treasury Advantage Fund Growth | ₹1,582.98 ↑ 0.15 |
₹31 | 0.8 | 1.7 | 6.9 | -8.9 | -2.8 | -11.1 | Low Duration |
| Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 14 Oct 21 | |||||||||
SIP Investments for Retirement Planning
A systematic investment plan (SIP) can be the key to your happy life. Ideally, when you plan to invest for the long term, SIP is considered to be the most efficient method. SIP is a process of wealth creation, where a small amount of money is invested at regular intervals of time i.e. monthly/quarterly. And this investment is invested in the stock market and generates returns over time. The amount required to start a SIP is as low as INR 500, thus SIP is a great tool for smart investment, where one can start investing from a small amount.
There are two major advantages of SIP- the power of compounding and the rupee cost averaging. Rupee cost averaging helps an individual to work out the average cost of asset purchases. In a systematic investment, units are purchased over a longer period and are spread evenly at monthly intervals (usually). Because of the investment spread over time, shares at different price points in the stock market are given the investor’s average cost advantage.
In the case of compound interest, the interest amount is added to the principal, and interest is calculated on the new principal (old principal plus profit). This process continues every time. Since mutual funds in SIP are in installments, they are compounded, which adds more to the amount invested initially.
Benefits of investing in mutual funds for retirement
Before you pick a suitable investment option, here are some of the benefits of investing in mutual funds that should be considered:
Easy investment
Mutual funds come with Systematic Investment Plan (SIP) option. 500 to the investors. allows investment from Investment is done in two ways – Lumpsum and SIP. In case of lump sum investment, investors invest a large amount in one go. These are suitable for investors who are ready to invest a large amount in the market. On the other hand, SIP is invested at regular intervals. Anyone can invest in it very easily.
Higher returns than other fixed income schemes
Fixed deposits and other income schemes are safe but they do not give more than a certain return/profit. However, mutual funds are market-linked instruments that do not offer a fixed return percentage. When the market conditions are bullish, mutual funds offer higher returns than other fixed income schemes.
Variation
Mutual funds potentially invest in a number of stocks without requiring investors to select and purchase them individually. These funds invest in multiple sectors and companies rather than investing in any one particular sector or company. This reduces the risk.
Professional Management and Oversight
Mutual funds are professionally managed by fund managers who have experience in the same. They take decisions related to investment and fund strategy which help in maximizing returns for the investors of the scheme.
Taxing
Investment in Equity Linked Savings Scheme (ELSS), a type of Mutual Fund, under Section 80C of the Income Tax Act 1961, up to Rs 1.5 lakh. Tax exemption is given on investments up to Rs. However, it has a lock-in period of 3 years. Another attractive feature of investing in mutual funds is that up to Rs 1 lakh. Profits up to and including Rs.1 lakh are exempted from tax deduction in the financial year only. Long Term Capital Gains Tax (LTCG) of 10% will be levied on gains in excess of Rs.
More liquid
Mutual funds allow investors to easily redeem/withdraw their invested amount. This is especially the case with debt funds, many of which do not charge exit and exit charges for premature withdrawal. You can easily withdraw your amount when needed. Apart from this, some fund houses also have separate plans which allow instant withdrawal of your mutual fund investments in case of emergency and avail debit card benefits. This is in contrast to popular fixed rate options such as fixed deposits, which attract charges for premature withdrawal.
How to Invest in Mutual Funds
There are various ways through which individuals can invest in mutual funds:
Offline Mode – You can invest in your preferred mutual fund by visiting the nearest branch of the fund house. You need to carry all the required documents like identity proof, address proof, canceled cheque, passport size photograph, PAN card and KYC documents. You can also invest offline through the broker. However, this is only when it is a regular fund and not a direct fund. Think of it as a brokerage fee that is deducted from the total investment amount.
Online Portal – If you want to invest without commission and without agent then you can opt for a website like Paisabazaar.com, it allows investors to compare and contrast more than 1,700 funds on one platform instead of visiting the website of Asset Management Company. Allows multiple funds to be searched. You can choose the fund you wish to invest in, and compare similar schemes as well as use the SIP calculator or the lumpsum calculator to estimate the future value of your investments.
In 20 years, these funds increased the money up to 30 times
Nippon India Growth Fund
Return in 20 years: 18.62%
Value of 1 lakh investment in 20 years: 30 lakhs
Value of 10 thousand monthly SIP in 20 years: 2.84 crores
Assets: 6,844 crore (December 31, 2019)
Expense Ratio: 1.84% (December 31, 2019)
Minimum investment: Rs 100
Minimum SIP: Rs 100
Franklin prima
Return in 20 years: 18.20%
Value of 1 lakh investment in 20 years: 28.33 lakh
Value of 10 thousand monthly SIP in 20 years: 2.68 crores
Assets: 7,583 crore (December 31, 2019)
Expense Ratio: 1.92% (December 31, 2019)
Minimum investment: Rs 5000
Minimum SIP: Rs 500
HDFC Equity Fund
Return in 20 years: 18.08%
Value of 1 lakh investment in 20 years: 27.75 lakh
Value of 10 thousand monthly SIP in 20 years: 2.21 crores
Assets: 23,737 crore (December 31, 2019)
Expense Ratio: 1.71% (December 31, 2019)
Minimum investment: Rs 5000
Minimum SIP: Rs 500
Tata Midcap Growth Fund
Return in 20 years: 17.94%
Value of 1 lakh investment in 20 years: 27.13 lakh
Assets: 773 crore (December 31, 2019)
Expense Ratio: 2.12% (December 31, 2019)
Minimum investment: Rs 5000
Minimum SIP: Rs 500
HDFC Tax Saver Fund
Return in 20 years: 17.94%
Value of 1 lakh investment in 20 years: 27.09 lakh
Value of 10 thousand monthly SIP in 20 years: 1.93 crores
Assets: 7,454 crore (December 31, 2019)
Expense Ratio: 1.97% (December 31, 2019)
Minimum investment: Rs 500
Minimum SIP: Rs 500
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Related Questions
Q: Are returns/profits guaranteed from Mutual Funds?
Answer: No, Mutual Funds are market linked instruments, hence returns are not guaranteed.
Question. What is ELSS?
Answer: Equity Linked Savings Scheme (ELSS) is a category of Equity Mutual Fund which provides for Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961. Tax deductible on investments up to Rs. ELSS is the only investment option in the tax saving category that can potentially deliver higher returns and comes with the lowest lock-in period of 3 years.
Disclaimer:
All efforts have been made to ensure that the information provided here is accurate. However, no guarantee is given about the accuracy of the data. Verify the plan details from the document before making any investment.