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Retirement Linked Mutual Funds: Why It Could Be A Good Proposition?


With increasing life span of individuals, one needs to plan well so that the money accumulated can be used throughout the lifespan.

There are many mutual fund houses which have lined up to launch their retirement linked mutual funds. All of the pension plans can offer tax benefits under Income Tax U/S 80C, subject to guidelines.

Retirement Linked Mutual Funds: Why It Could Be A Good Proposition?

Earlier, UTI Mutual Fund and Templeton India Pension Fund were the only two fund houses which were offering pension plans under mutual funds.

Here are 6 things to know about retirement linked mutual funds:

  1. Investing in such mutual funds will help in long term growth and capital appreciation.
  2. The fund house will primarily invest in equity and equity related instruments and balance in fixed income securities so as to help the investor in achieving the retirement goals.
  3. The plan will work on age linked asset allocation. Means, when you grow older, your equity exposure will get reduced accordingly.
  4. The other option is a conservative portfolio where one can choose from there options based on the risk capacity.
  5. These funds have the option to lock-in the money till your retirement or redeem before that unlike other pension plans from insurance companies.
  6. To discourage investors from exiting from the scheme before their retirement, fund houses have lined up heavy exit loads for early redemption.

Investments in such funds to a limit of Rs 1.5 lakh are eligible for a deduction under Section 80 C of Income Tax Act. The main highlight of mutual funds are there is no compulsion to buy annuity plans unlike insurance pension plans.


Again, a good investment, if you can do some good planning. By this what we mean is that you can alter your requirement as per your age. When you are younger, you can opt for higher exposure to equity and when older, reduce the equity exposure and add a big debt component.

Read more about: mutual funds pension plans 80c
Story first published: Monday, December 7, 2015, 13:10 [IST]
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