Retirement planning: Is this advisable to invest in solution-oriented mutual funds?

If you want to save for your retirement, it is feasible as well as advisable to invest in mutual funds across categories. Equity mutual funds enable long long-term wealth creation, debt schemes provide security. Additionally, investors can also allocate some funds to long term tax-saving instruments such as PPF, Senior Citizens Savings Scheme (SCSS) and Kisan Vikas Patra (KVP) for earning higher interest and saving tax at the same time.

All in all, one needs to curate a portfolio of sorts to accumulate sufficient funds for the same.

But what if you outsource the entire retirement plan to a fund manager by investing in a solution-oriented fund? Those who are not aware, solution oriented mutual funds refer to those schemes which have a lock-in period of at least 5 years or till retirement age, whichever is earlier, per the Sebi’s categorisation of mutual fund schemes.

There are a total of 29 such schemes with total asset size (assets under management) of ₹31,007 crore., as on May 31, 2025. 

Some of the large retirement funds include UTI Retirement fund ( ₹4,703 crore), Nippon India Retirement Fund ( ₹3,156 crore), HDFC Retirement Savings Fund ( ₹6,503 crore) and SBI Retirement Benefit Fund aggressive plan (2900 crore), reveals the data from Association of Mutual Funds in India (AMFI) as on June 19, 2025.

Why should you invest in retirement schemes?

Investing in retirement schemes is indispensable for investors to maintain the same standard of living after retirement as they had before it. 

“Gone are the days when our parents were getting regular monthly pensions from the government. Nowadays most of people are from private jobs or running their own business. In today’s world, when private jobs are not secured, there is no question of a pension from the employer. And that’s made Retirement Planning more crucial,” says Preeti Zende, a Sebi-registered investment advisor and founder of Apna Dhan Financial Services.

Soumya Sarkar, Co-founder of Wealth Redefine, says, “Retirement-focused solution-oriented mutual funds can be a good choice for building a retirement corpus. These funds are designed for long-term goals, with a 5-year lock-in ensuring disciplined investing and shielding you from short-term market volatility. They offer a mix of equity (for growth) and debt (for stability), customised to your risk appetite, helping you accumulate wealth over time.” 

Investing in a blend of funds 

Those who want to curate their own portfolio can invest in a combination of mutual funds, opines Zende. “It is better that you use a combination of diversified equity Mutual funds like large cap, flexicap and mid and small cap, along with EPF, PPF and NPS. So this portfolio will also take care of inflation-headed return, provide downside risk to the portfolio, and some income is tax-free,” adds Ms Zende.

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