Do mutual fund retirement plans offer pension


Can one opt for a pension when mutual fund retirement plans mature or only a lump sum payment is allowed?


When you reach the retirement age which is usually 58 years for most funds you can either make a lump sum withdrawal or opt for a regular income in the form of annuity or pension. Any balance mutual fund units after withdrawal remain invested in the fund and continue to grow with the fund.


Hi Sourav,

Generally, in the case of retirement plans offered by Mutual Funds, you can opt for a Systematic Withdrawal Plan (SWP). This will allow you to withdraw the accumulated amount in regular instalments. You can also choose to invest more in equity than debt so that your investments are tax efficient. These plans have a lock in period of 3 to 5 years and might have an exit load if you decide to withdraw before you turn 60 years of age. However, these plans do qualify for tax deduction under Section 80C of the Income Tax Act.

BB Expert


As far as I know you can choose if you want a lump sum or do it like an annuity. Of course, how much you can get depends on your #investing contribution.