Read on to see how you can safely grow your capital to build a retirement corpus
So you have a huge amount of capital in hand and you're retiring in the next five to 10 years. You're considering a good retirement plan but you don't know what to do with that huge corpus today. So here's how you can go about investing this amount for retirement.
Since you are looking for a safe investment, the amount must be deployed in a manner that doesn't expose you to risk. Equities are inherently risky, but since you want safety, a safe vehicle such as conservative growth funds would work best for you. This type includes a selection of large-cap equity funds and aggressive hybrid funds. These funds are a lot more stable and less risky. This makes them more suited to conservative equity investors and first-time equity investors who are not used to the volatility of stock markets. These are good for a long-term holding period. However, make sure you invest in a segregated manner so that you don't dump your money at a market high. Spreading out will average your cost of investment.
If you can afford to take a little risk, then you can go for a pure equity fund such as a flexi-cap fund. Do note that these funds are risky and they increase your returns, but that comes with high volatility.
Once you retire, you can use this corpus to move towards creating a safe, regular income. You can choose to go for conservative growth and income funds. This type includes equity-savings funds that invest about 1/3 of your money individually in equity shares, bonds and arbitrage opportunities. These are suitable for regular income seekers. Investing in equity will ensure the growth of your money and the fixed income part will ensure you receive a steady income.
But if you're looking for a different type of investment, you have other options like Senior Citizen Savings Scheme (SCSS) or Pradhan Mantri Vaya Vandana Yojana (PMVVY). These schemes are built for retirees and are backed by the Government of India. They provide a decent return of 7.40 per cent that can act as a regular income.
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