Best Mutual Funds for Retirement (2023)

Last Updated on Mar 14, 2023 by Nikitha

Retirement is an important phase of one’s life. It is when most people stop working and rely on their savings and investments to support their lifestyle. Investing for retirement allows individuals to take advantage of compound interest and accumulate wealth. Mutual funds are one of the investments that can help with your retirement goals. In this article, let’s look at the best mutual funds for retirement and their taxation.

Table of Contents

Best mutual funds for retirement

Name	AUM (Rs. in cr.)	CAGR 5Y (%)	Absolute Returns – 1Y (%)
HDFC Retirement Savings Fund-Equity Plan	2,696.93	15.07	16.40
HDFC Retirement Savings Fund-Hybrid-Equity Plan	932.37	12.45	11.85
Tata Retirement Sav Fund – Prog Plan	1,254.98	9.71	3.81
Tata Retirement Sav Fund – Mod Plan	1,557.72	9.52	4.55
HDFC Retirement Savings Fund-Hybrid-Debt Plan	141.54	7.76	6.63
Franklin India Pension Plan	442.67	7.48	5.79
Nippon India Retirement Fund-Income Generation	176.35	7.42	4.74
Tata Retirement Sav Fund – Cons Plan	166.77	7.22	3.26
Nippon India Retirement Fund-Wealth Creation	2,273.28	6.92	7.23

Note: The list of best mutual funds for retirement is from Tickertape Mutual Fund Screener. It is as of 13th March 2023 and derived using the following parameters:

Category – Solution Oriented – Retirement Fund
Market Cap
Absolute returns – 1yr
CAGR 5Y – Sorted from high to low

1. HDFC Retirement Savings Fund – Equity Plan

This was launched on 25th February 2016 by HDFC Mutual Funds. As of 10th March 2023, HDFC Retirement Savings Fund – Equity Plan has a NAV of Rs. 31.44. It has a 3-yr CAGR (Compound Annual Growth Rate) of 27.65%. The minimum investment amount is Rs. 100.

2. HDFC Retirement Savings Fund – Hybrid – Equity Plan

This fund by HDFC Mutual Funds was launched on 25th February 2016. As of 10th March 2023, HDFC Retirement Savings Fund – Hybrid – Equity Plan has a NAV of Rs. 26.31. It has a 3-yr CAGR of 19.30%. The minimum investment amount is Rs. 100.

3. Tata Retirement Savings Fund – Prog Plan

Tata Mutual Fund launched this fund on 1st November 2011. As of 10th March 2023, Tata Retirement Savings Fund – Prog Plan has a NAV of Rs. 40.74. It has a 3-yr CAGR of 14.55%. The minimum investment amount is Rs. 5,000.

4. Tata Retirement Sav Fund – Mod Plan

This was launched by Tata Mutual Fund on 1st November 2011. As of 10th March 2023, Tata Retirement Savings Fund – Moderate Plan has a NAV of Rs. 41.77. It has a 3-yr CAGR of 14.19%. The minimum investment amount is Rs. 5,000.

5. HDFC Retirement Savings Fund – Hybrid – Debt Plan

This fund by HDFC Mutual Funds was launched on 25th February 2016. As of 10th March 2023, HDFC Retirement Savings Fund – Hybrid – Debt Plan has a NAV of Rs. 17.12. It has a 3-yr CAGR of 8.60%. The minimum investment amount is Rs. 100.

6. Franklin India Pension Plan

This fund by Franklin Templeton Mutual Fund was launched on 31st March 1997. As of 10th March 2023, Franklin India Pension Plan has a NAV of Rs. 163.57. It has a 3-yr CAGR of 8.34%. The minimum investment amount is Rs. 500.

7. Nippon India Retirement Fund – Income Generation

This was launched by Nippon India Mutual Fund on 11th February 2015. As of 10th March 2023, Nippon India Retirement Fund – Income Generation has a NAV of Rs. 15.96. It has a 3-yr CAGR of 5.95%. The minimum investment amount is Rs. 500.

8. Tata Retirement Sav Fund – Cons Plan

This was launched by Tata Mutual Fund on 1st November 2011. As of 10th March 2023, Tata Retirement Savings Fund – Conservative Plan has a NAV of Rs. 24.91. It has a 3-yr CAGR of 7.56%. The minimum investment amount is Rs. 5,000.

9. Nippon India Retirement Fund – Wealth Creation

This was launched by Nippon India Mutual Fund on 11th February 2015. As of 10th March 2023, Nippon India Retirement Fund – Wealth Creation has a NAV of Rs. 17.51. It has a 3-yr CAGR of 18.12%. The minimum investment amount is Rs. 500.

Why mutual funds for retirement?

Compared to traditional pension plans, mutual funds for retirement are considered more flexible as there are no withdrawal limits.
Mutual funds are more transparent than pension plans. You can get all the information about a fund easily on their websites.
Retirement mutual funds are considered tax-efficient compared to other retirement plans.

Who should invest in mutual funds for retirement?

Retirement mutual funds come under a special category, ‘Solution Oriented Schemes’. SEBI introduced it to help investors plan their investments in a disciplined manner. The mutual funds for retirement come with a fixed tenure of 5 yrs or more. This ensures that the investor stays invested long and achieves the investment goal.

Anyone who wants to save funds for a financially secured life post-retirement can choose retirement mutual funds. There is no minimum age eligibility; hence, it is also suitable for investors in their 20s. Also, retirement mutual funds invest in low-risk investments. Hence investors with a medium to low-risk appetite can consider these. However, it is better to understand the working of mutual funds in general before taking a call.

Taxation on mutual funds for retirement

As per Section 80CCC, investment in retirement mutual funds is allowed for a deduction of up to Rs. 1.5 lakh. However, the returns on these funds are taxable. If the investor chooses the returns as an annuity, taxes are applicable as per the individual’s income slab.

Conclusion

There are several investment avenues available, and retirement mutual funds are one of those. Before investing, ensure that you are well aware of the scheme and it aligns with your investment objectives. Use Tickertape Mutual Fund Screener to find the best mutual funds for retirement. You can also Watchlist those funds to keep an eye on the performance. It’s never too late to invest for retirement. Start exploring your options now.

FAQs

Are mutual funds good for retirement?

Retirement is considered an important phase of one’s life. It is the time to relax and live a financially peaceful life. And to achieve financial security for your post-retirement phase, you need to consider savings or investments. Mutual funds for retirement are one of the investment options. These are medium to low-risk options that can provide good returns. However, you need to understand the working of mutual funds and pick the right one according to your investment objectives and risk appetite.

How to select mutual funds for retirement?

SEBI has introduced a special category in mutual funds called ‘Solution Oriented Schemes’, which includes children’s funds and retirement funds. The funds under the retirement scheme contain growth funds that can help with retirement goals. Using Tickertape Mutual Fund Screener, you can select this category and sort the funds according to your preferred parameter like AUM, 1-yr returns, 5-yr CAGR, 3-yr CAGR, etc.

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Nikitha

I'm a Senior Content Writer at Tickertape. With over 5 years of experience in the financial industry and insatiable curiosity, I bring complex financial topics to life in a way anyone can understand. My passion for educating others shines through in my approachable writing style.