Best Mutual Funds for Senior Citizens: An Overview
There is a wide range of investment and saving schemes for senior citizens. However, mutual funds are investors' most convenient and popular investment options. Mutual funds offer specialized retirement schemes that are suitable for retirees. It allows you to diversify your investment across different asset classes such as stocks and fixed-income instruments. You get to invest in a diversified portfolio in a single investment and the best part is you don't need to track or manage your investment frequently. You can access your mutual fund's investment any time you want to by logging in with your credentials. All you need to do is install the broker application on your smartphone.
Ideally, mutual fund investments are made for the long term to achieve your financial objectives. However, it would be best if you kept in mind that mutual funds are risky. So, make sure to choose the right mutual fund that aligns with your investment objective, the timeline of your investment and risk appetite. In this article, we are going to learn about mutual funds, the best mutual funds for senior citizens and things to keep in mind while investing in the best mutual funds for retirees.
What are mutual funds?
Mutual funds collect money from several investors to invest in various asset classes. Mutual funds are known for offering way better returns than bank deposits. The main objective of investing in a mutual fund is to grow your wealth and achieve your financial goals. Various mutual fund schemes are available in the market that suit different investors. Mutual fund for senior citizens is suitable for those who are in their 60s. Even if you are in your 30s, you can plan your retirement for yourself or your parents If you want to live a comfortable life post-retirement. You can opt for investing in SWP (Systematic withdrawal plan) if you want to earn regular income.
Generally, senior citizens aim to preserve their wealth and this is the reason they opt for less risky investment schemes. Ideally, it is advised to choose mutual funds that have allocated 60% of their funds in fixed-income instruments and the rest in equity. Also, you can opt for dividend-paying mutual funds that give you benefits of earning passive income.
Key Takeaways
- Investing in a mutual fund allows you to grow your wealth over time.
- Mutual funds investments offer high liquidity as they allow you to redeem units any time you want to.
- Invest in the best mutual funds for senior citizens to preserve your wealth and get the best returns.
Best Mutual Funds for Senior Citizens
| Best mutual fund for senior citizen | NAV | Minimum SIP amount | Fund size |
| Axis Bluechip Fund Direct Plan-Growth | Rs. 50.01 | Rs. 100 | Rs. 35,822 Cr. |
| ICICI Prudential Balanced Advantage Direct-Growth | Rs, 57.62 | Rs. 100 | Rs. 42,989 Cr. |
| ICICI Prudential Ultra Short-Term Fund Direct Growth | Rs. 24.57 | Rs. 1000 | Rs. 12,245 Cr. |
| HDFC Retirement Savings Fund Equity Plan Direct Growth | Rs. 33.98 | Rs. 100 | Rs. 2,406 Cr. |
| HDFC short term Debt Fund Direct Plan-Growth | Rs. 26.68 | Rs. 100 | Rs. 13,516 Cr. |
| Kotak Debt Hybrid Fund Direct Growth | Rs. 49.49 | Rs. 1000 | Rs. 1,571 Cr. |
| SBI Bluechip Direct Plan Growth | Rs. 69.40 | Rs. 500 | Rs. 33,021 Cr. |
| SBI Conservative Hybrid Fund Direct Growth | Rs. 59.81 | Rs. 500 | Rs. 6,714 Cr. |
| Axis Short Term Direct Fund Growth | Rs. 27.20 | Rs. 1000 | Rs. 7,510 Cr. |
| Aditya Birla Sun Life Dividend Yield Fund Direct Growth | Rs. 284.23 | Rs. 1000 | Rs. 810 Cr. |
(Data as of 2 November 2022)
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
Factors that Can Affect Your Decision
- Financial objectives: Having a financial objective is the most important criterion to consider before investing. The objective can be buying a house or a vacation. Make sure to select a mutual fund scheme that aligns with your investment goals and stay invested for a longer duration to reap the best returns.
- Time horizon: You should always consider the time horizon of your investment before choosing any mutual fund scheme. For example, if your investment horizon is short-term, you can opt for liquid funds or debt funds. Whereas if your time horizon is long-term, you can opt for investing in equity mutual funds.
- Liquidity: Analyze the liquidity of the fund. You can opt for liquid mutual funds if you need money shortly. Liquid funds allow you to avail of money any time you want. On the other hand, if you do not need the money for a while, you can stay invested in an equity mutual fund.
- Risk appetite: Analyze your risk appetite before choosing any mutual fund scheme. If you are an aggressive investor you can opt for highly risky mutual funds. On the other hand, if you are a conservative investor, you can invest in less risky mutual funds. Since senior citizens no longer have a regular income stream, they should invest in less risky funds.
- Cost-Efficiency: Compare different mutual funds by checking their expense ratio, past performance, fund manager's experience, entry, and exit load, etc, transaction charges, etc to make an informed decision.
- Past performance: Check for the past performance of the mutual funds and make sure that the fund is consistently performing well over the past years. You can check their last 5 to 10-year CAGR (Compounded annual growth rate). However, past performance does not guarantee that it will perform well in the future.
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To conclude, If you have proper planning and goal setting, you are not required to make any major changes in your lifestyle or way of living. So, opting for the best investment for senior citizens will help you to live a comfortable life post-retirement.
This is not an investment advisory. The blog is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.
Which mutual funds are best for senior citizens?
Generally, experts suggest hybrid funds that invest in a mix of equity and debt instruments. Hybrid funds which have a high asset under management (AUM) are SBI Equity Hybrid Fund, ICICI Prudential Equity and Debt Fund, HDFC Hybrid Equity Fund, Canara Robeco Equity Hybrid Fund, and Aditya Birla Sun Life Equity Hybrid '95 Fund.
What are the best investment options available for a 60-year-old?
Fixed-income instruments such as bonds and CDs (Certificates of deposits), low-volatility stocks or blue chip stocks, and saving bonds are the most preferred investment options for a 60-year-old.
What is the list of best mutual funds with low risk?
Mirae Asset Hybrid Equity Fund, Quant Multi Asset Fund, and Canara Robeco Equity Hybrid Fund are the list of mutual funds that have low risk.
How should a 75-year-old build their portfolio?
A 75-year-old should invest 25% in stocks and the rest in debt instruments.
What should I do with my money after retirement?
You should invest your money in different asset classes. However, the proportion of the asset allocation should align with your risk appetite.