Can you earn regular income from mutual funds?

Retirement is the biggest change in the life of an individual as he is about to enter a completely different phase of living. In the retirement phase, people usually take a permanent break from work and pursue what they wish. Then it can be a hobby or travelling or anything else. However, as people are no more working, the income in the form of salary is stopped and if we look at the income in the form of pension then that is not enough to survive till their life expectancy. So it becomes necessary for them to have a secondary source of income as well.
 
So can mutual funds fulfil your retirement requirements? The answer to the same is yes, it can. However, there are certain things that need to be considered. First of all, post-retirement there are high chances that your risk profile will change. So first it is important to assess your risk profile. Generally, people become more conservative in the retirement phase for the obvious reason that now there is no such stable income as salary. So post assessing your risk profile you must assess the corpus that you will require to fund for you and your spouse’s life expectancy. Once you are aware of the corpus you can now save for the same until you are in your accumulation or pre-retirement phase. In case you are already nearing retirement then whatever corpus has been accumulated, conduct the asset allocation for that corpus, i.e., how much you must invest in equity mutual fund or debt mutual fund or any other asset classes based on the assessed risk profile. Kindly note that it is very important that your portfolio must at least contain 20 per cent to 25 per cent investments in equities to counter the inflation.
 
So now once you are done with all the above things start an SWP (Systematic Withdrawal Plan) which means that you can withdraw a predetermined sum of money from the fund at predetermined intervals say monthly, quarterly, annually, etc. However, the thing to remember is that you must do periodical rebalancing and review the investments at least annually.