![6 Investment Options For The Retired](https://www.mediahacker.org/wp-content/uploads/2017/09/6-Investment-Options-For-The-Retired-e1505977575884.jpg)
Retirement not only brings about an end to a remarkable journey, but it also brings about an end to a steady income. Unless you jump ships by becoming a consultant, there are not many options which are available for you. Your age becomes a considerable factor in your decision to explore other work-related avenues. Thus, the best option for you to sustain is by resorting to these investment options.
For the retirees, the best way to earn is to make the most out of their investment corpus so that it turns out to be fruitful in the long run. At that age, it is pivotal that you invest in such a way that it helps you keep away from the tax liability and help you in the generation of regular income. Building a retirement portfolio is one of the major challenges when it comes to fixed investments and investments linked with the market. The calculation should be to utilise funds in such a way that they last for at least 20 years. A person retires at the age of 60 years and an average life expectancy is that of 80 years, thus, it is essential that you prepare to be self-sufficient for the next 20 years.
Here are several investment avenues which you can explore if you are nearing your retirement. This will help you to plan your future better. It will also help you to look forward in managing your monthly expenses:
- Senior Citizens’ Saving Scheme (SCSS): This is inarguably one of the best investment options for senior citizens. SCSS is the first choice for most retired personnel. SCSS has been specifically designed for senior citizens or early retirees and is meant to cater to their needs. A Senior Citizens’ Saving Scheme (SCSS) can be availed from a bank or a post office. A person above the age of 60 years can opt for investing in SCSS. Apart from them, even people who decide to retire early can do the same by investing their retirement funds quickly after they receive their retirement corpus.
- Post Office Monthly Income Scheme (POMIS) Account: With a maximum limit of INR 4.5 lakh for an individual and of INR 9 lakhs under joint ownership, POMIS is a five-year investment option that any retiree can resort to. The rate of interest under POMIS is set on a quarterly basis and is now available at 7.8%. However, it is essential to know that the interest earned under POMIS is fully taxable. Thus, it is not eligible for any tax benefit.
- Fixed deposits offered by the financial institutions: Apart from the two schemes mentioned above, fixed deposits are another suitable option for the retirees. A FD offers easy operation and is a reliable investment avenue which will help the investors over the age of 60 years. However, recently the fixed deposits rates offered by the banks are falling. Thus, you must choose alternative options such as fixed deposits offered by Non-Banking Financial Companies as they provide a better interest rate.
- Mutual Funds: As mentioned above, the period where you do not earn can extend for 20+ years when one retires. It is essential to not only invest in secured investment options but to earn a decent income by investing funds in products which are backed by equity. However, when opting to invest in mutual funds, it is essential to know that mutual funds are subject to market risks. But the plus point is that they help to overcome inflation better than other investment options.
- Tax-Free Bonds: Though this option is not directly there in the primary market, it can, however, feature in a retiring personnel’s portfolio. Tax-Free Bonds are issued by the institutions which are backed by the governments.
- Immediate annuities option: Life insurance companies provide immediate annuity schemes. Thus, one can consider this option. However, the pension or annuity is completely taxable and it currently sits at 5-6% per annum.
The aforementioned schemes provide you with a few options to explore and secure your future. It is essential that at this age, you take calculative steps and learn about all the risks attached to the investments.