As Father’s Day is being celebrated today, it’s a good time to think beyond the usual gifts and give your father something that can truly benefit him in the long run—financial security. While gifts and celebrations are always special, helping your father plan for a comfortable retirement or strengthen his financial future can provide peace of mind that lasts well beyond Father’s Day.

ETMutualFunds reached out to two experts to understand how to build the portfolio allocation, plan financial security for the fathers and how fathers can leverage mutual funds to achieve financial independence and leave a lasting legacy.

Also Read | Retirement savings gap after a career break? Expert shares how to recover without taking big risks

Start early to achieve financial independence

Planning for financial independence is a long-term journey, and the sooner a person starts, the easier it becomes. Starting early gives investments more time to grow and benefit from compounding, where returns earned over the years generate further returns. Experts believe there is no fixed age to begin planning, but those who start investing in their 20s or 30s generally have a much better chance of building a comfortable retirement corpus than those who delay it until later in life.

Shivam Pathak, CFP and Founder of Asset Elixir said that fathers should ideally begin planning in their late 20s or early 30s.

“The earlier, the better—ideally from the late 20s or early 30s. Money needs time to grow, and a SIP started at 30 will grow much bigger by 60 than one started at 40, simply because it had more years to compound. Mutual funds make this simple—a father just invests a fixed amount every month and lets it grow, without needing to time the market. Returns also tend to be better when given enough time,” he said.
Manish Kothari, Co-Founder & CEO, ZFunds shared similar thoughts. Kothari said that the importance of an early start, emphasizing the power of compounding.”There’s no magic age. The earlier you begin, the more the heavy lifting is done by compounding rather than by your monthly contribution. For instance, to build Rs 5 crore by age 60 at an assumed return of around 11%, someone starting at 30 needs to invest about Rs 18,000 a month, while someone starting at 40 would need nearly ₹58,000 a month for the same goal,” Kothari said.

He further said that mutual funds are a strong vehicle here as they fit every stage – SIPs to accumulate, STPs to deploy a lump sum gradually, SWPs to draw a planned income once you reach independence

Best or right mutual funds for generational wealth

Creating wealth that can benefit not just you but also your children and future generations requires planning over several decades. Since such goals have a very long time horizon, investors can afford to stay invested through market ups and downs and focus on assets that have the potential to grow over time.

Experts believe that building generational wealth is not just about investing more money, but also about choosing the right investment mix that can generate long-term growth while ensuring the wealth remains intact for future generations.

Kothari said that the ideal allocation depends on an investor’s surplus income and time horizon. “For wealth genuinely earmarked for the next generation, the bigger risk isn’t volatility; it’s being too conservative and letting inflation quietly erode purchasing power over 20-30 years. Therefore, the centre of gravity should remain in equity for longer than a standard retirement plan would suggest,” he said.

He further said that the retirement corpus and the wealth you intend to pass on are different goals with different horizons; they shouldn’t carry the same risk profile. The legacy bucket can stay aggressive precisely because you may never need to draw on it,” Kothari added. He further noted that nominations, wills, and ownership structures are essential to ensure wealth is transferred smoothly to future generations.

Also Read | MF Tracker: Nippon India Small Cap Fund tops all equity funds over 10 years. Is it too late to invest?

Pathak said a diversified approach for goals that are 15-20 years away or longer. “A simple mix works well for long-term goals. Large-cap funds offer a stable, lower-risk core holding, while flexi-cap funds act as an all-rounder by investing across large, mid, and small companies. A limited allocation to mid-cap and small-cap funds can also help, given the long investment horizon involved,” he said.

Common mistakes fathers make while planning retirement

Many fathers spend most of their lives focusing on their family’s needs—whether it’s their children’s education, household expenses, or other responsibilities. However, in the process of taking care of everyone else, they often overlook their own financial future.

Experts say that not planning adequately for retirement or long-term financial security can lead to financial stress later in life, making it important for fathers to strike a balance between supporting their family today and securing their own future.

Pathak said many fathers delay planning for their own retirement while focusing entirely on their children’s needs and keeping too much money in safe options like fixed deposits is another mistake, since these often fail to beat inflation.

He further said that many also stop their SIPs when markets fall, instead of staying invested, and end up mixing up goals-dipping into retirement savings for a child’s education, leaving both short.

Kothari said that funding children’s education or weddings at the expense of one’s own retirement may feel selfless, but there are loans and scholarships for those goals and none for retirement.

“The second is treating insurance as an afterthought inadequate term and health cover means a single hospitalisation or untimely event can unravel years of disciplined saving”

He further said that the third is not getting professional guidance. It is important that families work with a distributor who can handhold and guide them through all cycles of investing and wealth creation

Lessons to teach children about investing

A father’s role in financial planning goes beyond earning and saving money for the family. The habits and values children learn at home often shape how they manage money as adults.

Experts believe fathers can play an important role in teaching children basic financial concepts such as saving regularly, spending wisely, investing for the future, and understanding the value of money. These lessons, learned early in life, can help children make better financial decisions as they grow up.

Also Read | Sunil Singhania-backed Abakkus Flexi Cap Fund increases stake in HDFC Bank, RIL and 29 others in May

Kothari said that the most valuable lessons are about behaviour and discipline and the greatest wealth a father can pass on is not just money, but the wisdom to manage and grow it. So educate and involve kids early – for example, before buying something, ask the child to classify it as a need, a want or a future goal as this develops better money habits or ask them to choose a goal, estimate its cost and decide how much they need to save or invest every month.

Pathak said fathers can teach their children to start early, since even small amounts grow meaningfully with time, and to stay consistent rather than waiting for a big lump sum to invest.

He further said that staying invested through market ups and downs matters more than panicking during a downturn and beyond investing, fathers can also help children develop the habit of saving and spending wisely-giving them pocket money and letting them learn to manage within that budget.

As Father’s Day celebrations honour the role fathers play in their families, experts believe that financial planning is an equally important part of fatherhood. By starting early, staying invested, and passing on sound financial values, fathers can help ensure not only their own financial independence but also a stronger financial future for generations to come.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and twitter handle.