At a retirement party, one normally feels a mixed bag of emotions – happiness, nostalgia and anxiety for what happens next. We cannot wait to start spending our time with loved ones and family. At the same time, one of the things that concerns us is what to do next and how to maintain a constant source of income even after retirement.
If you are aged 60 years or above then you are one of us and you can totally relate to it, but if you are not, you should better plan your future by planning your finances well in advance and ensure an independent and tension-free life. Moreover, at this stage of life, nobody likes taking risks. So, we all look for are the best investment options with minimum risks. Some risk-free instruments senior citizens can invest in are:
- Fixed Deposit: This is a deposit instrument in which you deposit your money at the bank for a fixed period, say 5-8 years. Banks offer interest on that deposit, which is your income on your investment. This interest is fixed and does not vary according to the market. So, your earning remains risk-free. Additionally, you can open your Fixed Deposit account with a minimal amount of INR 1,000 with AU Bank. One can easily withdraw the amount prematurely in case of an emergency.
A Fixed Deposit has additional benefits if you are a senior citizen. With the option of a tax saving Fixed Deposit, you do not have to pay taxes on your earnings, you earn higher interest and you can also avoid tax payment by filling various Forms like 15G, 15H etc.
- Tax-free Bonds: Another good investment option is government bonds. Senior citizens can buy these bonds and earn interest on them. The earning under these bonds are tax-free and hold the least risk, as they have to be repaid by the Government. You can invest your money here for a couple of years, for a maximum investment of INR 10 lakhs.
- Senior Citizen Savings Scheme: It is a savings scheme where you can deposit your savings and earn high interests. There is no restriction on the minimum amount required to be deposited, as you can deposit anywhere between INR 500 to 15 lakh. This scheme is risk-free and very easy to handle. Some banks like AU Bank offer specific savings schemes for senior citizens, which offer attractive benefits. You do not have to go through lengthy forms – all you need to do is provide your documents and a suitable account is made.
- National Savings Certificate/Post-office Monthly Income Scheme: Under this scheme, you can deposit your savings in a post-office account and the post-office would reward you with monthly interest on it. You can also buy such savings certificates in multiples of INR 100 every month for 5 years and earn interest on it. This scheme, like Fixed Deposit, is safe from market forces and gives you fixed earnings. However, under this scheme, your earnings would be taxable.
- Pension Plans: If you have already decided a pension scheme, then you can earn regular income from your pensions; but if you have not, then you should consider getting one. With this, you can deposit all your money at once or you can deposit small amounts at intervals. You will earn your pensions based on the amount deposited. EPF and PPFs are some such pension plans. Under these, you deposit a part of your salary to these accounts and can avail the benefits after a couple of years.
So, why waste your post-retirement life on financial tensions? Choose any of these instruments and invest for a stress-free retirement!