Investment Services

6 Investment Options for the Retired

Retirement is where the steady income ends. When most of the people decide to hang their boots, they accept the fact that it would bring an end to their remarkable journey. However, does an end to steady income means that it would lead to financial constraint for the retiree? In most cases, yes. Soon after the accumulated cash is used up, financial stress is bound to arise. Unless you start up something new such as becoming a consultant or start exploring some new avenues. However, it is important to know that at this stage, the options left in your hands to explore are quite less. Furthermore, you don’t want to risk your accumulated savings by investing in an avenue which is risk prone.

For people who are retiring, it is important that they invest in an avenue which has minimal risk. The investment corpus is the last thing you would want to take chances with. Thus, at this age, you want to focus on investing safely without the burden of tax liability hoping that it would lead to the regular generation of income. The major goal for a retiree is to build a retirement portfolio which includes both fixed investments and market linked investments. It should be done with an eye of safeguarding the next 20 years of his life.

There are several investment options which you can consider if you are about to retire. All these options will contribute immensely to help you plan your future. Not just that, these will also help you manage your household monthly expenses:

Fixed Deposits: Fixed Deposits are well-known for their safe nature. Nowadays, fixed deposits offered by Non-Banking Financial Companies (NBFCs) are also a go-to-option for higher returns. There are highly accredited NBFCs which are a preferred investment option as compared to banks. Banks are offering a considerably low rate of interest as compared to NBFCs. And the growing nature of the NBFCs and their stability offers great investment option. Furthermore, the senior citizen fd interest rates are considerably higher than the usual ones.

Senior Citizens’ Saving Scheme (SCSS): For senior citizens, SCSS is inarguably the best investment option. Most of the retirees prefer SCSS over any other form of investment. The main reason for the same is because the scheme is specifically designed for senior citizens and people who want to retire early. A senior citizen can approach a bank or a post office in order to avail the service.

Post Office Monthly Income Scheme (POMIS) Account: POMIS is a 5-year investment option which offers a maximum cap of INR 4.5 lakhs and 9 lakhs for individuals and joint ownership respectively. Retirees can resort to this investment option as the major benefit includes the interest rate being set on a quarterly basis. Currently, the interest rate being offered is 7.8%.

Mutual Funds: Mutual Funds can help you build a strong portfolio which can help you deal with the non-earning period which can last for up to two decades. Investment is not the only option that you need to consider while you are retiring, generation of regular income too must be considered. Thus, it is essential that you invest wisely and earn a regular income by investing in equity-backed products. Mutual funds might not be the safest of options. However, they will offer higher-inflation-adjusted returns as compared to other investment options.

Tax-Free Bonds: The government backed institutions issue Tax-Free Bonds. Though this option is not available in the primary market, it can still be opted for. Government backed institutions such as, Indian Railway Finance Corporation Ltd (IRFC), National Highways Authority of India (NHAI) and Power Finance Corporation Ltd (PFC) are the ones who issue the bonds.

These were few of the schemes that you can invest in, based on your preference. If security is your concern, then you should opt for FD and SCSS. However, if maximizing returns is your concern, then mutual funds are the best option!


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