After age 50, most people get serious about preparing for retirement. The biggest question at this point is how to ensure regular income after retirement. Financial experts believe that if a person has investable funds of around ₹1.3 crore, a properly constructed bond portfolio can help generate a regular income of around ₹1 lakh per month. However, this is just an example, and the actual income will depend on the type of investment, interest rates and individual needs.
Why might a bond portfolio be a better option?
According to experts, the most important need after retirement is regular cash flow. Bonds, debt mutual funds and other fixed income investments can play an important role in meeting this requirement. It is less volatile than the stock market, so there is more possibility of capital protection along with regular income. This is the reason why bond portfolios are considered important in retirement planning.
A ‘three-bucket’ strategy will provide a better balance
Financial planners recommend a three-bucket strategy for retirement. The first bucket consists of liquid funds or short-term investments to cover expenses for 1-3 years, so you don’t run out of money if you suddenly need it.
Bonds in the second bucket
The second bucket includes bonds, debt funds and other fixed-income instruments that generate regular monthly income. The third bucket contains growth assets like equities or equity mutual funds, which help offset inflation and increase investment value over the long term.
It is not advisable to invest the entire amount in one place.
Experts say it is not wise to invest your entire retirement fund only in fixed deposits or bonds. Likewise, relying solely on the stock market can be risky. Proper asset allocation, i.e., investing in a balanced manner across various investment options, can yield better results in the long run.
Plan according to your expenses and risk taking capacity.
Everyone has different income, expenses, health and financial goals. Therefore, it is important to assess your needs before adopting any retirement plan. Experts recommend building a retirement portfolio that balances regular income, capital protection and long-term growth. If you have enough funds and follow the right investment strategy, it is possible to generate a steady monthly income even after retirement.
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