Should I move money from gilt to money market/arbitrage funds closer to retirement?

Published on / By M. Pattabiraman Twitter: @pattufreefincal

Published: October 31, 2025 at 6:00 am

Last Updated on October 31, 2025 at 8:30 pm

A reader asks, “My name is Joy. Age 40. IT employee. My expected retirement is by 50. My current retirement portfolio is at 30X. Equity: Debt ratio is 45:55 ( don’t plan to increase equity more than 50%). I already have health insurance and an emergency fund (in FD)”.

“Within Debt, I’m investing monthly in PPF (me and wife) and Debt funds ( started recently) – Gilt fund, Money Market fund and arbitrage fund. PPFs are maxed out. I’m confused about what percentage allocation I should opt for within my monthly Debt fund investments. Also, what should be the strategy to invest in gilt funds during different interest rate cycles? Should I move money from Gilt to the money market/arbitrage closer to retirement?”

You are in the last decade of regular salaried employment.  With ten years to go, 30X (corpus = 30 times current annual expenses), and an equity allocation of 45%, things look good.

Your goal in the lead-up to retirement should be the following:

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  1. What should be my equity allocation after retirement?
  2. How should I reduce my current equity allocation to the desired equity allocation at retirement?
  3. How am I going to deploy my retire corpus to generate inflation-index income?

The freefincal robo advisory tool can answer these questions. Here are some sample illustrations using the  tool.