Are Mutual Funds a Viable Option For Senior Citizens? Read To Find Out


Saving your income in the bank is a good way to ensure future security but investments can help you grow your savings. If you want your money to work for you, then investing it in the right places can work wonders. Investments can be done regardless of age, but senior citizens have to be careful when making any investment decisions.

As different people have different demands, one scheme does not work for everyone. Moreover, proper research is necessary to know which bond, security or scheme will align with your demands. Mutual funds are one of the most popular investment schemes out there.

However, a misconception related to mutual funds is that they are risky for senior citizens. But, that isn’t quite the case. There are some mutual funds designed for senior citizens that align with their needs and risk tolerance. Although traditional financial instruments like recurring deposits and fixed deposits are good alternatives, they cannot beat the inflation returns in India at the moment.

The objective of mutual funds is to diversify investors’ money through bonds, stocks, and ETFs, among others. The profit-loss dynamics of mutual funds are managed by the market levels and guided by a professional fund manager.

Systematic Investment Planning (SIP) can also be used for mutual funds. For senior citizens, mutual funds can be a viable option to beat the rising inflation in the country. Other than mutual funds, the Post Office Savings, National Pension Scheme, and banks’ fixed deposits can also prove to be great alternatives.

However, as mutual funds do not provide any restrictions on withdrawal, this allows elderly people to design their withdrawal plan accordingly. An applicant can formulate a diversified portfolio tailored to their needs and assets.

It is suggested that senior citizens, in the first five years, should invest in debt mutual funds, balanced mutual funds, and large-cap equity. After retirement, an investor should consult a financial advisor on his or her finances following risk appetite and other goals.

Read all the Latest Business News here

Source link