I am investing in mutual funds to raise retirement fund. My portfolio is 25% debt and 75% equity currently. I have self occupied property.

Before few years of retirement, I will start to switch fund from equity to debt to achieve reverse share percentage as that of current. Hence, at some stage, my allocation will be 25% equity and 75% debt.

I am aggressively saving and investing in mutual funds. My property loan will close after two years; so, I will have additional saving due to no more loan installments. I am planning to divert the additional saving to mutual funds.

I have few amount in bank account and deposits; but this is just an emergency fund. I am not thinking this as retirement fund.

So, as you can see, my major investments are only in mutual funds (and self occupied property if it is considered an investment; not sure).

My concern here is that, mutual funds (debt and equity both) are subject to market risk. Is it safe to rely on mutual funds for raising retirement fund and after retirement financial planning?

If no, what change I should do?

I am 37 now and from India; just in case if it matters.

3 Answers 3


Is it safe if I rely “only” on mutual funds for retirement planning?

Sure you can rely only on mutual funds, because the mutual in mutual fund only defines how the fund is legally constituted, not what's inside the fund (debt, equity, the length and risk of debt, the kinds of stocks, REITs, etc).


"A mutual fund is an investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets. Mutual funds are operated by professional money managers, who allocate the fund's investments and attempt to produce capital gains and/or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus."

and self occupied property if it is considered an investment; not sure

Many people consider it an investment, but truly it depends on how long you intend to live there, and how much "sweat equity" you had to put into it (if the house was run-down and you had to repair much of it yourself, to save money).

If you're planning on raising a family there, then it's an expense (the mortgage, repairs, taxes) that also becomes a long-term asset.

  • Thanks for interest and efforts. This does help. As I said in question, mutual funds are subject to market risk. I will not have any income after retirement. My concern was that, what if market fall exactly when I need to withdraw the money from MF. I can see your first part of the answer addresses this. Can you please elaborate on this? I am reading the article you linked.
    – Aastik
    Jul 21, 2018 at 9:32
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    @Aastik if you're worried about risk, asking just about mutual funds is the wrong question. The right question is about how much risk you should tolerate at what age. You already answered that yourself, saying that you're currently 75/25 Equity/debt, and will be 25/75 at some later point.
    – RonJohn
    Jul 21, 2018 at 20:05
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    @Aastik there are high risk mutual funds, and there are zero risk mutual funds. This demonstrates states that "mutual" has no bearing on an investment's risk.
    – RonJohn
    Jul 21, 2018 at 20:06
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    Self-occupied property is not an investment unless you CAN and WILL sell it for a higher value. Which may be problematic. It is at most a piggy bank for many people - prices do not go up everywhere. Consider adding more property that you rent out, once the home loan is gone. I can tell you from experience that a couple of thousand per month rental income is VERY... smoothing to the soul.
    – TomTom
    Aug 7, 2018 at 17:43

You can surely rely on equity Mutual Funds for long term planning. but having a bit of diversification also helps.

As you are 37, you can look towards investing 50K in NPS. You will get additional tax benefit as well over and above 1.5 Lakhs.

I am assuming your insurance requirements(life + health) are sorted.

  • Thanks, I will think about NPS. I neglected it due to its long locking period.
    – Aastik
    Aug 19, 2018 at 14:32

In one word : YES you can rely.

Prime factor in Mutual Fund Investments is the time you are giving to your fund to grow.

At 37years, your investment portfolio with 75% equity and 25% debt is quite promising.

Having a self occupied property and loan finishing in next 2 years, you already become liability free from probably the most expensive expenditure and fulfilled a very imp personal goal (specially in India).

For me, you seems to have planned well your finances. With approx 23 years in mutual fund, you are bound to have a very good retirement corpus.

Looking at your financial awareness and planning, I assume you must have already planned about your child's education and marriage expenses.

As a suggestion you can have a term policy and a medical health policy for your safe future. (if its not there already).


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