BAF: Your retirement BFF?

Abhijeet, a recent retiree after a 35-year corporate career, has accumulated a retirement corpus of Rs 1 crore. He and his wife require about Rs 5 lakh annually, adjusted for inflation, to maintain their lifestyle. With BAFs (balanced advantage funds, also known as dynamic asset allocation funds) as a potential solution for setting up an SWP (systematic withdrawal plan), Abhijeet reached out to us to determine if this option can provide sustainable retirement income. Before diving in, let's understand why Abhijeet is considering BAFs. For starters, BAFs invest in both equity and debt, which is good because retirees should put some money in equity even during retirement. Also, since BAFs change their equity and debt balance in-house, Abhijeet wants to leave the hassle of asset allocation and rebalancing to them. How much equity exposure suits your retirement portfolio? But can BAFs be a faithful retirement companion? This is when we compare

This article was originally published on November 15, 2024.