Investment Options To Get Regular Income After Retirement
Everyone wants to save enough money to retire comfortably, but once retired, everyone wants to make sure that their financial needs are taken care of till death. Saving for retirement is a very important part of the financial process, especially if you’re a Millennial. There are many options for getting you regular income after retirement, and some are better than others. This blog brings you some smart investment tips that can help you in your retirement.
Post-Retirement Investment Options for Indian Citizens
When it comes to post-retirement investment options, Indian citizens have a few different options:
1. Buy Annuities
An annuity is a contract between an individual and an insurance company. The individual pays a lump sum amount to the insurance company, and in return the insurance company pays the individual a fixed income for life.
There are many benefits of buying an annuity. One advantage is that annuities provide a guaranteed income stream for life, which can help cover basic living expenses in retirement. Another advantage is that annuities can help hedge against inflation, as the payments made by the insurance company will increase over time to keep pace with inflation.
There are many types of annuities available, but the most popular among Indian retirees is the immediate annuity. This type of annuity begins making payments immediately after it is purchased, which means retirees can start receiving income immediately.
2. Senior Citizen Savings Scheme (SCSS)
Every Indian citizen who enters retirement is faced with the challenge of what to do with their savings. While some choose to keep their money in a traditional savings account, others look for higher-yielding investment options.
Senior Citizens Savings Scheme (SCSS), is a popular option for investment after retirement. SCSS is a government-backed scheme that provides a fixed rate of interest to senior citizens on their deposits. The current interest rate on SCSS deposits is 7.4% per annum.
Investors need to deposit a minimum of Rs 1,000 and a maximum of Rs 15 lakh in SCSS. Interest payments are made quarterly, and citizens can opt out of the scheme after five years. It is to be noted that interest earned through SCSS is taxed under section 80C.
3. Mutual Fund
Mutual funds provide an opportunity for retirees to invest in a professionally managed portfolio of stocks, bonds and other securities. This provides greater diversification and growth potential than investing in a single security. Additionally, mutual funds generally have lower fees than other investment options, making them an attractive option for retirees on a fixed income.
Investors should carefully consider their goals and risk appetite before investing in mutual funds. There are many different types of mutual funds available, each with their own unique features. Retirees should take the help of a financial advisor to choose the right mutual fund for their individual needs.
4. National Savings Certificate or National Savings Certificate (NSC)
National Savings Certificate is another post office based savings scheme that gives good returns, and it is a safe form of investment as it is insured by the government. National Savings Certificate can be purchased from any post office in multiples of Rs 100 every month for a period of five years with a minimum payment of Rs 100. There is no investment limit, and the National Savings Certificate pays an interest rate of 8.1%, which is subject to change. While the interest on National Savings Certificate is taxable, the amount invested is eligible for tax exemption under Section 80C up to a maximum of Rs 1.50 lakh per annum. Though premature withdrawal is not allowed, you can simply get a loan against your National Savings Certificate.
5. Bank Fixed Deposit
When it comes to post-retirement investment options for Indian citizens, bank fixed deposits are one of the most popular options. Here’s why:
One of the main reasons why fixed deposits are popular among retirees is that they provide a safe way to invest money. With a fixed deposit, you know exactly how much interest you will earn on your investment, and there is no risk of losing any of your principal amount.
Another reason why bank fixed deposits are a good option for retirees is because they offer flexibility in terms of withdrawals. You can choose to withdraw your interest income every month, or leave them invested for longer periods. This flexibility means that you can tailor your investments to suit your needs and goals.
It’s never too early to start thinking about your retirement. As the saying goes, “It’s not what you make, it’s what you keep.” If you’re looking for a way to start saving, or if you’re just looking for some extra retirement income, we hope this article was helpful to you. We also hope that you will be able to find some investment options that work for you and are in line with your retirement goals.