An ideal retirement is where a retiree does not have to depend on children financially. A financially stable retirement helps live golden years on your terms with complete financial independence. Planning for post-retirement years helps identify priorities and maximize post-retirement income. Many retirees miss out on investment opportunities due to lack of awareness on various financial products.
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Listed below are some great post-retirement investment options:
Senior Citizen Savings Scheme: The senior citizen savings scheme is a must-have investment option for senior citizens. The SCSS scheme is a safe investment which offers capital protection along with tax benefits. SCSS is an ideal investment for people who retire with a huge retirement corpus. The senior citizen scheme can be availed from banks or post offices and may be used to park a huge corpus from your retirement fund.
The scheme offers quarterly interest payments directly sent to applicant’s savings bank account to generate an income post-retirement. The returns on the scheme do not depend on the market fluctuations and the current rate of interest is 8.8% a year, making it an attractive investment option for retirees. SCSS scheme is meant for senior citizens who are at least 60 years of age, for individuals aged 55 years who retired with VRS and for individuals retired with the armed forces.
See Also: Financial Plans For Retirement Benefits
Post-Office Monthly Income Scheme: Post-office monthly income scheme or POMIS is one of the most popular investment schemes as its low risk and generates steady monthly income. A retiree can opt to invest in POMIS for a period of 5 years under a single or joint account. For a single account the maximum investment amount is fixed at Rs 4.5 Lakhs. For joint accounts, the maximum investment limit is Rs 9 Lakhs. Currently, the rate of interest for POMIS scheme is 7.7% a year.
Bank Fixed Deposits: Fixed Deposits offer guaranteed returns and are quite safe. The scheme is mainly beneficial for retirees who want a safe and low-risk income generating option. There are no complex terms and conditions involved with fixed deposits and it can be easily availed by depositing a lump sum. The maturity proceeds can be reinvested as per the tenure chosen by the investor. A 5-year tax saver fixed deposit also offers tax benefits under Section 80C.
A bank fixed deposit offers a slightly higher interest rate for citizens above 60 years of age. Unlike other investment options, you can invest in many fixed deposits at the same time. The retiree can spread the amounts across multiple fixed deposits with different maturity periods. This helps the retiree enjoy the required liquidity during retirement years.
See Also: Retirement Planning In India
Immediate Annuities: An immediate annuity involves making a single payment (single premium payment) and the scheme offers a fixed monthly pension which starts almost immediately. Immediate annuities are investment options offered by life insurance companies. Income from pension plans is fully taxed. Annuity Scheme is ideal for retirees who want to diversify investment portfolio. They are great if you have a lump sum to invest at retirement.
Health Insurance Plans: A health insurance policy is a must for retirees. There are several benefits of availing health insurance. The health insurance plan offers insurance coverage for emergency hospitalization and for medical treatment which is very common during retirement. In case the insured suffers a major health complication, health insurance comes to the rescue.
You can enjoy a stress-free and happy retired life if you already have senior citizen health insurance in place. This saves you from financial distress during a medical emergency. The health insurance plan helps avail quality treatment at network hospitals and make cashless claims. Health insurance offers tax benefits under Section 80D of the income tax act, for premium payments on health insurance plans.
See Also: Types of Retirement Plans
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