Which mutual funds can secure your retirement?

Let’s start with a simple question: If you wanted a lasting marriage, what would you look for in a partner? Brains, humour, loyalty, beauty? Warren Buffett had a different take – he suggested you look for low expectations. That same wisdom applies when choosing a mutual fund for your retirement planning. Instead of chasing sky-high returns, the goal is reliable growth over decades. After all, like a marriage, you want your investment journey to last. How to plan your retirement with mutual funds Starting early is key to building your retirement corpus effectively. It ensures you benefit from the magic of compounding, famously termed the 8th wonder of the world by Albert Einstein. That said, it takes a long time for the effect to kick in, which makes it difficult. Suppose you started late at age 40. If you do a monthly SIP of Rs 15,000 at a rate of return of 12.5 per cent, in the next two decades, you’ll make close to Rs 1.5 crore. Now, if you started at age 25 with the same rate of return but with Rs 2,500, you would make close to Rs 1.55 crore. Surprising, isn’t it? You can use the SIP calculator to chart out your journey as well. However, to reap the benefits of compounding, you need to stay invested. That is only possible when you have mutual funds you can stick to. That’s why you have to find the right balance between risk and return. That said, in your earlier years, you can afford to take on more risk. However, keep in mind that taking on more risk might lead to longer periods of underperformance. So, to keep building wealth during such slumps, it is essential to have the right asset allocation. Suggested read: Real, practical asset allocation How should asset allocation change with age and risk profile? Asset allocation is your roadmap

This article was originally published on May 28, 2025.