Debt Funds for Retirement

Background

Debt funds invest in bonds, government securities and money market instruments. They are usually less volatile than equity funds but still carry interest rate and credit risk.

Explanation

Short-duration and high-quality debt funds can provide relatively stable returns and form the defensive part of your retirement allocation. They are useful for SWP-based income or as a parking place when de-risking near retirement.

Example

From age 55 to 60 you gradually move part of your equity corpus into short-duration debt and target-maturity funds. These then support SWPs for your first 10–15 years of retirement expenses.

Try the planner

See how this concept fits your own retirement plan.

Retirement Planner | All Retireopedia terms