Options for Investment after Retirement
Many people save, plan and invest to have a comfortable retirement. Some people do live the life they want, but others fail due to poor planning or unexpected events. While there is much discussion about how to invest in retirement, very few experts offer sound advice or reliable investment options for those who have already retired.
Contrary to popular belief you don't need to stop investing once you retire. Life doesn't stop after retirement. Many seniors who are 'young at heart' realize that life starts at 60. With increasing life expectancy, the retirement savings may not be sufficient to last them another 25-30 years.
According to the SRS report by the RegistrarGeneral of India, 2013-17, urban men live to 71.20 years and urban women live to 73.70 . This is an average. Many people reading this article could live past 85.
What can you do to ensure a long, healthy retirement? There are many smart retirement investment options today. You can invest again. Here are some options to help you find the best retirement investment options or good retirement investment options.
The best investment plans for a retiree
As a retirement investment strategy, financial planners recommend that you have a mix of fixed income assets. A wealth manager can help those who aren't financially competent to build a balanced portfolio or optimize their investments.
- Tax-free Bonds:Tax saving bonds can help you save taxes. They are also secured and offer liquidity, as they are listed on both the NSE and BSE. These bonds can be stored in physical or demat accounts and earn tax-free interest each year. High net-worth individuals have one of the best options for investing after retirement. These bonds are tax-free . This is a great tax-saving and safe haven option for those who fall below the 30% tax bracket.
- Senior Citizens Saving Scheme (SCSS), With fixed and lucrative returns at 8.6% per year, SCSS makes a great retirement investment choice. This scheme is specifically designed for seniors. Anyone over 60 years old can purchase this scheme at a bank or postoffice. SCSS is valid for 5 years, but it can be extended up to 3 years after the scheme's maturity. The maximum amount that can be invested in Senior Citizens' Savings Scheme is Rs. 15 lakh, and are eligible for tax benefits under Section 80C. It allows you to withdraw the money for emergencies.
- Fixed Deposits at Bank:Bank fixed deposit have been very popular among retired investors due to their higher returns. Banks offer deposits up to 7.25%, while senior citizens can earn up to 7.75% interest on FDs. You can save taxes by investing in a fixed deposit that is tax-saving and lasts five years.
- Debt Mutual Funds: While retirees are allowed to invest in equity mutual funds they may be intimidated by the uncertainty in the equity markets. They can still invest in debt mutual fund through the SIP route. A large portion of your fund can be held in debt funds because it has more liquidity and is subject to lower tax rates than fixed deposits at banks.
- Nonconvertible debentures (NCDs),NCDs, are instruments that corporates issue to raise funds. They can be used as investment instruments for a particular tenure. It is a fixed income investment and is an excellent option for retirement. NCDs can be traded on stock exchanges. You can earn periodic interest - either monthly, quarterly or annually. At maturity, you will receive the principal amount you invested. Because the interest earned on non-convertible debentures is higher than those from bank FDs or post office savings, they are a great investment option for retirement. You can also sell your listed NCD in the secondary market if you purchase it before maturity. As low as Rs. 10,000 can be used to start investing. You can invest 10,000 in NDCs.
For your post-retirement life, you should invest a portion the returns of your EPF, PPF, or pension/annuity plans. You don't have to spend all of the money you receive on retirement because you have annuity plans that will pay your pension. The unpredictable nature of life is even more apparent in a world where epidemics and deadly pandemics are becoming the norm. Healthcare, medication, and hospitalization will account for a large portion of your retirement expenses. Make sure you have sufficient health insurance or an emergency fund in place to cover these costs.