Definition
Retirement Fund
A retirement fund is a solution-oriented mutual fund designed for retirement savings, with a lock-in of five years or until retirement age.
These funds, classified by SEBI under solution-oriented schemes, lock in money for at least five years or until you reach 58-60, whichever is earlier. They usually offer plans ranging from aggressive (equity-heavy) to conservative (debt-heavy).
They compete with the NPS and EPF as retirement vehicles. The lock-in builds discipline, but investors should weigh the relatively higher costs against the tax benefits and structure of NPS before committing.
Related terms
- Lock-In PeriodThe lock-in period is the minimum span during which a ULIP's funds cannot be withdrawn or fully accessed, set at five years in India.
- Solution-Oriented FundSolution-oriented funds are goal-specific mutual fund schemes built around retirement or a child's future that carry a mandatory minimum five-year lock-in.
- NPS (National Pension System)The National Pension System is a government-backed, market-linked retirement scheme regulated by PFRDA that builds a corpus over your working life and converts part of it into a pension.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.