Need advise on how to invest 45 lakhs of my retirement corpus

Based on the information provided by you in your query, your total retirement corpus is Rs 50 lakhs. You need Rs 35,000 per month or Rs 420,000 per annum, post retirement. Therefore, your expected investment yield is 8.4%. Assuming this investment income is your only source of income after retirement, you should select low or moderately low risk schemes. Debt funds are low risk or moderately low risk investments. However, you also need protection from inflation, because your retired life can be as long as 25 to 30 years. Historically, equity returns have been able to beat inflation in the long term. In order to get both risk protection and a hedge against inflation, you need to allocate your corpus to both debt and equity, with larger allocation to debt to provide the necessary risk protection. Hybrid debt oriented funds invest in both debt and equity instruments, and as such are good investments for post retirement income. Top performing hybrid debt oriented mutual funds have given double digit or close to double digit compounded returns over the last 10 years (please see 10 year returns of Top Performing Mutual Funds - Hybrid Debt Oriented Funds in the last 10 years by clicking on the link). Going by the long term track record of top performing hybrid debt oriented mutual funds and assuming that, they will be able to sustain their long term historical returns, they can meet your yield expectations plus give you some extra returns, for protection against inflation in the future. As per the latest CRISIL mutual fund rankings, some of the best performing Hybrid debt oriented mutual funds are Birla Sun Life MIP II – Wealth 25 Plan, UTI MIS Advantage Fund, ICICI Prudential MIP 25, Franklin India MIP – Plan A, Kotak MIP etc.

For your monthly cash flow needs, you should opt for a systematic withdrawal plan (SWP), since it will convenient and be more tax efficient for you in the long run. However, when opting for SWP, you should be mindful of exit loads and start your withdrawals after the exit load period. For your monthly income needs during the exit load period, you should invest a portion of your corpus in liquid funds and make your withdrawals from liquid funds (you can see Top Performing Liquid Funds in the last one year by clicking on the link).

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