Fri. Dec 1st, 2023

5 investment options for the retired


Post-retirement planning investment is very important and has a great impact on the quality of life you live in your golden period. As during this period, there is no regular source of income unless you choose to work as a consultant. It is important to have a regular income to pay expenses such as medical bills and other daily expenses. Investing in right schemes is vital to build a strong post-retirement portfolio that consists of fixed income as well as market-linked plans. It is why it is important to invest in your retirement corpus wisely. Here are some options that you may consider as investment options to yield good returns.

  1. Senior Citizens Savings Scheme – This scheme is designed for senior citizens that is for individuals above 60 years of age. It is launched keeping in mind the needs of the senior citizens. Various banks and post offices offer the SCSS plan. Early retirees can invest in Senior Citizen Savings Scheme as well. However, the scheme must be bought within three months of receiving the retirement funds. This scheme comes with 5 years tenure but can be extended further after completing the maturity period. It offers higher tax returns than any other scheme in the market for the senior citizens.
  2. Post Office Monthly Income Scheme Account – This is an easy and safe way to receive monthly income and enjoy your retirement life. You can invest a lump-sum amount in this scheme and earn interest at around 8.4% with no default risk on the money. The POMIS is an investment of 5 years with a minimum cap of ₹9 Lakhs. It is under combined ownership and ₹4.5 lakh under single ownership. The investment made in this scheme does not qualify to any tax benefit and the interest is taxable.
  3. Bank Fixed Deposits – Bank fixed deposits are the oldest and most popular choice in retirement planning options to invest retirement fund. It provides both safety and fixed returns that attracts the retirees. The easy operational method makes it a reliable option. Even after observing a fall in interest rate, people still consider it to be a vital avenue for its reliability. Currently, it provides an interest rate of 7.25% per annum for 1-10 years of time period. However, some banks offer an interest rate of 7.75% for a longer tenure as a special benefit to senior citizens. This scheme is more flexible as compared to POMIS and SCSS plans. It enjoys tax benefits under Section 80C.
  4. Mutual Funds – After retirement, you need to invest a part of your retirement corpus in equity-backed investment products. Be it interest or dividend, your retirement income is subject to inflation and according to studies equities bear higher inflation-adjusted returns than other assets.
  5. ELSS – Some people will suggest investing in ELSS after retirement some will suggest not to. The debate is never-ending as it is an equity fund with market risk but yields good returns. You must not rely only on debt post-retirement hence a part of an investment in equity is needed to make profits. Having a lock-in period of 3 years it has more chances of creating more wealth. The amount invested in ELSS is exempted from taxation under Section 80C.

No single plan can give you expected returns, hence plan smartly and invest in different plans.