Retirement mutual fund assets jump 226 percent

Mumbai

Assets under management (AUM) in retirement-focused mutual funds have seen a major rise in India, growing by 226% over five years—from ₹9,800 crore in June 2020 to ₹31,973 crore in June 2025, according to a report by ICRA Analytics.

This sharp rise is supported by better financial awareness, rising life expectancy, and growing healthcare costs. More Indians are now turning to mutual funds to secure their post-retirement lives. Retirement mutual funds are designed to offer both financial security and steady income after retirement.

The number of investor folios in such funds rose by 18.2%, reaching 30.09 lakh in June 2025, compared to 25.46 lakh in 2020. The number of retirement mutual fund schemes also went up—from 24 in 2020 to 29 in 2025.

Ashwini Kumar of ICRA Analytics said the appeal of long-term equity growth, paired with increased transparency and investor protection rules, is driving people to choose mutual funds for retirement planning.

These funds mix equity and debt investments—equity for growth and debt for stability. The average annual returns stand at 6.79% for one year, 15.72% for three years, and 14.64% for five years.

The funds come with a five-year lock-in or until retirement, offering a regular stream of income post-retirement. Additionally, digital platforms and robo-advisors now make it easier for people to plan for retirement with custom portfolios based on age, risk level, and goals.