What are the best mutual funds to invest as I am retiring

Please note that as you are retiring, your prime objectives should be to earn as much regular income as possible without taking much risk. Therefore, request you to read the following -

1. You can invest part of the retirement corpus in Senior Citizen Savings scheme (SCSS). You can invest maximum Rs 15,00,000 in one name. The current interest rate is 8.5% but subject to review every quarter, therefore, you can expect that the interest will fall from the current level in near future. Interest is taxable in this scheme.

2. Invest another Rs 750,000 in Varistha Pension Bima Yogana (VPBY) earning 8% assured interest for 10 years. Though initially the interest of VPBY will be less than that of SCSS, but it is assured for next 10 years compared to SCSS which is subject to review every quarter. Interest is taxable in this scheme too.

3. You can invest some amount (approx 12 months of your monthly expenses) in a liquid or ultra short term fund to meet emergency expenses. Liquid funds or ultra short term funds gives you better tax efficient returns over bank savings account or short term fixed deposits. How, you can check here https://www.advisorkhoj.com/mutual-funds...

3. You may invest the remaining corpus in Balanced Mutual Funds and withdraw a fixed amount every month through SWP. If you start withdrawing after 12 months from the date of investments, the profits made on each SWP withdrawal will be totally tax free. Profit made on withdrawals prior to one year will be subject to short term capital gains and taxed @15%. Initially you should not draw more than 8-9% from your total investments. In your case, this is not a problem as your requirement is only Rs 40,000 and you may probably be investing around Rs 1.50-1.75 Crores.

See how SWP works https://www.advisorkhoj.com/mutual-funds...

4. To beat inflation, you can increase your monthly SWP amount by 6-10% depending upon the prevailing inflation rates. Please see how SWP works in case you increase your SWP amount annually - https://www.advisorkhoj.com/mutual-funds...

You can also expect to get good capital appreciation over and above the SWP withdrawals from your investments in balanced funds.

5. Some good balanced fund schemes are ICICI Prudential Balanced Fund, SBI Magnum Balanced Fund, Birla Sun Life Balanced 95 Fund, Principal Balanced Fund, DSP BlackRock Balanced 95 Fund and HDFC Balanced Fund. You can choose around 4 funds to invest your entire amount. See a comprehensive list of top performing funds in the balanced fund category https://www.advisorkhoj.com/mutual-funds...

6. Considering your risk appetite, we think the above should work very well for you as your investment horizon is quite long.

Hope you find the above suggestions helpful. Thanks for writing to Advisorkhoj