Should you hold equity MFs in your retirement?

Equity is considered to be the most rewarding asset class when it comes to returns. However, it is inevitable that it also comes with high risk. Being an asset class with a high risk - high return characteristics, it is recommended for long-term as in short term it tends to be highly volatile. So keeping these things in mind, people are confused whether equity mutual funds should find its place in their portfolio during their slow-down period.
 
Retirement is considered to be that phase of life where people stop working with no or very low regular income and also most of their responsibilities also gets a permanent full stop. People usually want to spend this phase of life in peace and also wish to pursue things which they didn’t think of may be due to responsibilities. Taking these into consideration, retirement seems to be the phase in which people tend to become more conservative.
 
Still, the question is the same, should a retiree portfolio consist of equity mutual funds? Yes, their portfolio must have exposure to equity mutual funds. Now the immediate next questions are why and how much? So first let’s answer the question as to why one should have equity exposure even while in retirement. Remember retirement is not a one-time thing it continues until you and your spouse is alive. So it won’t be rude to say that due to the advancements in healthcare the retirement phase has increased. However, longer the period more the funds that you require to cope with inflation. So nothing is better than equity mutual funds to counter the inflation post-retirement.

After understanding why equity MFs for retirement, the other question is how much to hold in equity MFs during retirement. So answer for this is in your risk profile. If your risk profile turns out to be aggressive then you can hold equity mutual funds as high as 70 per cent. But one should have a minimum of 20 per cent to 25 per cent of assets in equity MFs so as to cope with the inflation. To sum it all, having a financial plan or specifically saying retirement plan in place which would help you understand many things such as whether with current assets, income, expenses, etc. you would be able to survive at least till your life expectancy or not.