For those who depend on the risk profile of investors through a lengthy period, one may need to change the investment mix and administer a certain proportion to equity-oriented mutual funds. As the interest rates driving down and earning the same interest income is becoming difficult for senior citizens because of increasing life expectancy.
Accordingly, generating investments in such a way that one’s corpus doesn’t get weakened quickly is crucial. Rishad Manekia, Founder and MD of Kairos Capital Private Limited which is a Mumbai-based financial planning firm says, “If an investor has recently retired and is concerned about inflation eating away at the value of their corpus over the long term, they can consider investing in a mix of equity, gold, and debt mutual funds to earn better returns.”
But you need to know how safe it is to invest in mutual funds post-retirement? “Before looking at avenues different than FDs or fixed income products, an investor needs to understand how extensive risk he or she is inclined to take in order to earn that extra return but they both go hand in hand if you want more return you remember to be willing to take higher risks and experience volatility in the portfolio,” says Maneki. As the risk in mutual funds is a big factor that investors are anxious about but orientation to equities is also required. It is important that factors such as safety, liquidity, returns, and taxation should be given its due significance.