Mutual Funds

Your Fund Portfolio

K Venkatasubramanian | Updated on August 09, 2018 Published on August 05, 2018

I retired recently. I wish to invest certain part of my retirement benefits in mutual funds. My aim is to generate some regular income, besides reasonable capital appreciation. Please suggest a few good schemes.

Bhupinder Anand

After retirement, safety and liquidity are the two most important considerations while looking for steady income streams. Of course, inflation also has to be factored in.

In this regard, first exhaust debt options such as the post office senior citizens savings scheme (SCSS) and Pradhan Mantri Vaya Vandana Yojana (PMVVY), which offer attractive rates and regular incomes.

If you can take risks, opt for balanced funds. HDFC Hybrid Equity and L&T Hybrid Equity are good options, where you can a park a portion of your corpus.

These funds have delivered 17-18 per cent returns over the past five years and have a strong track record. Invest in phases, spread over a year during instances of significant market correction to ride out volatility.

While investing in these balanced funds, you can opt for a systematic withdrawal plan — at least 3-5 years after you put in the money — so that you can sweep profits periodically.

If you want do not want to take too much risk, you can opt for debt funds. Aditya Birla Savings Fund and HDFC Short Term are good options. You need to stay invested in these schemes for at least three years, so that gains get classified as long-term in nature. Long-term gains are taxed at 20 per cent with indexation. Short-term gains are taxed at your slab.

Buy a health cover immediately in case you do not have an existing medical policy and you are not covered by your employer, post-retirement.

Published on August 05, 2018
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