Solution Oriented Retirement Funds to Invest in India

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Aditya Birla Capital Limited (“ABCL”) is a listed systemically important non-deposit taking Non-Banking Financial Company (NBFC) and the holding company of the financial services businesses. ABCL and its subsidiaries/JVs provides a comprehensive suite of financial solutions across Loans, Investments, Insurance, and Payments to serve the diverse needs of customers across their lifecycles. Powered by over 61,600 employees, the businesses of ABCL have a nationwide reach with over 1,690 branches and more than 200,000 agents/channel partners along with several bank partners.

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What are Retirement-Oriented Mutual Funds?

A retirement mutual fund is a solution-oriented investment scheme which allows you to save up for your golden years. It has a lock-in period of 5 years or till you retire, whichever is earlier.

Advantages of Retirement-Oriented Mutual Funds

Disciplined investment

With a lock-in period of 5 years, you can save up for retirement and build a corpus over the investment tenure.

Market Linked returns

With equity-oriented retirement funds, you can expect to earn returns on investments which are also inflation-adjusted.

Tax benefits

Investment in Retirement mutual fund qualify for a deduction under Section 80CCC up to Rs.1.5 lakhs.

Regular Income Post-Retirement

Some retirement funds offer systematic withdrawal plans (SWP) or annuity options to ensure a steady income stream after retirement.

Types of Retirement Mutual Funds

Funds Based On Duration

Overnight FundSecurities mature in a day

Liquid FundMaximum maturity of securities is 91 days

Ultra Short Duration Fund Bonds matures between 3 and 6 months

Money-Market FundInvestment in money market securities with an investment tenure up to 1 year

Short Duration FundMacaulay duration of the fund ranges from 1-3 years

Medium Duration FundMaturity of bonds in between 3-4 years

Medium to Long Duration FundMaturity of bonds ranges from 4-7 years

Dynamic Bond FundPortfolio invests in securities across durations

Funds Based On Market Capitalisation

Corporate Bond FundPortfolio invests primarily in corporate bonds

Credit Risk FundInvestment in securities with the second highest credit rating

Banking and PSU FundDebt instruments issued by banks and PSUs

Gilt FundInvestment in government securities

Retirement funds returns Calculator

Check out the expected returns on your investments in retirement mutual funds. Use the Aditya Birla Sun Life Mutual Fund (ABSLMF) calculator for quick calculations.

SIP

Invest systematically in regular amounts and build a retirement corpus with disciplined investing habit.

Lump sum

Invest once with the facility of lump sum investing and save at your will. Time the market correctly and earn good returns.

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Calculate Portfolio Value

TARGETED EARNINGS

Investment Period (1 to 30 Years)

Expected Returns (8 to 20%)

MONTHLY SIP AMOUNT

Investment Period (1 to 30 Years)

Expected Returns (8 to 20%)

Monthly SIP Amount

₹ 0

Total Amount Invested

₹ 0

Expected Wealth Gain

₹ 0

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Understanding Retirement Funds

Table of Contents

What are retirement funds?What are the features of retirement funds?What should you know before investing in retirement funds?Who should invest in retirement funds?What is the tax implication of retirement funds?How can you withdraw from retirement funds?

What are retirement funds?

Retirement funds are solution-oriented mutual funds which aim to create a corpus for retirement. They have a lock-in period which allow you to save in a disciplined manner.

What are the features of retirement funds?

Lock-in of 5 years or till retirement, whichever is earlier
SIP or lump sum investment
Payout in lump sum or through regular income
Tax benefit on invested amount
Asset allocation in equity and debt securities

What should you know before investing in retirement funds?

There’s a lock-in period which restricts liquidity in the initial investment years
You can choose from debt-oriented or equity-oriented funds based on your risk profile
There’s a Systematic Withdrawal Plan (SWP) which gives regular annuities from the accumulated fund
If you invest in equity-oriented funds, invest with a long-term view to ride out short-term volatility.
There might be an exit load on redemption

Who should invest in retirement funds?

Those who want regular incomes after retirement

Investors looking to diversify their portfolio

Individuals looking for tax-saving benefits from investments

Who should buy a Savings Plan?

Equity-oriented funds

• Returns up to Rs.1 lakh are tax-free
• Returns exceeding Rs.1 lakh are taxed at 10%

Debt-oriented funds

• Returns earned are taxed at income tax slab rates

How can you withdraw from retirement funds?

Lump sum

• Withdraw in a lump sum once the lock-in period is over

SWP

• Choose the Systematic Withdrawal Plan and withdraw a fixed amount every month or week from the investment to create a regular source of income. The invested amount keeps on growing.

ULIP

Invest and secure with ULIPs

Market-linked returns
Flexibility: withdraw, switch, top up

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Bonds

Guaranteed returns, liquid trading

Diverse bond types
Stable portfolio returns

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FAQs On Retirement Funds

A retirement fund, also referred to as a pension fund, is an investment vehicle designed for individuals to systematically save a portion of their income to secure financial stability during retirement. These funds provide a consistent income stream in the form of an annuity throughout the retiree's lifetime.

Managed on behalf of the investor, pension funds invest in a diversified portfolio, typically favoring low-risk options such as government securities to ensure stable returns. The generated income from these investments contributes to the interest provided on the pooled funds. Equity oriented fund invest in equity product which may result to higher growth but may come with volatility in short term

The fundamental purpose of a retirement mutual fund is to create a retirement corpus for your old age. With targeted maturity, you can save regularly and create a corpus for financial needs after retirement.

Retirement funds serve as a financial resource for meeting daily needs and unexpected expenses. They are particularly well-suited for individuals seeking assured returns in their senior years.

Planning your retirement early in life certainly has its advantages, some advantages of investing in a retirement fund are:

Financial Security for Emergencies: Retirement planning ensures a substantial corpus, providing a safety net for unforeseen financial crises in post-employment years.

Optimized Returns on Investments: Investing in retirement plans allows for savings growth over time, optimizing returns through strategic planning.

Tax Benefits: Retirement plans offer tax advantages, reducing taxable income and enabling effective management of investment expenses within legal frameworks.

Cost Savings Through Early Planning: Initiating retirement planning at a younger age leverages lower premium rates and reduces long-term investment costs.

Peace of Mind and Financial Independence: Retirement planning instills confidence and financial independence, offering a sense of security during various life stages.

If you consider healthcare costs when making investment decisions, you can tailor the investment amount accordingly. The returns from the investment will be sufficient for future medical expenses.