I have never invested in mutual funds. I will retire next year and my fixed deposits, PF, and other savings will amount to Rs1.8 crore. I want to invest Rs80 lakh to get a monthly payout of Rs40,000. Which schemes should I invest in? I don’t want to invest my entire retirement corpus as I don’t want to take a lot of risk; but returns should be better than what fixed deposits offer senior citizens.
—Vijay Abhivyakti
Since you are new to mutual funds, are risk averse, and want to generate regular income from your investment, it is good that you are not investing your entire corpus in mutual funds. For your specific need of generating monthly payouts, low-risk short-term debt funds are ideal. Please use systematic withdrawal plan to generate fixed monthly payouts. Ideally, to keep your principal intact and also grow it a bit, your annual rate of withdrawal should be lower than the average returns from the fund. For example, if the fund returns 7%, and your annual withdrawal is, say, 5% or 6%, you allow your corpus to also grow.
