Planning a Better Retirement

Life has different phases, starting from being a care-free child to an enthusiastic learner/student, then the responsibility holder of own family and in the old age an experienced & enlightened person but lonely and dependent at the same time.

So, we thought of sharing some best ways to make the post-retirement phase of your life more happening and independent by drawing the maximum risk-free Fixed income from your retirement corpus. 

Below are some best investment schemes available in the market:

1. Senior Citizens Saving Scheme ( SCSS )

The scheme is sponsored by government, hence It is very safe and current rate of interest: 8.6 %

1. Eligibility – Any citizen who has attained 60 years of age.
2. Investment: Maximum amount of Rs 15 Lakh.

    It is a 5 years scheme that is extendable for 3 more years.

3. Open a SCSS account – It can be opened at any of the Authorized Banks or Post Office.
4. Tax Benefits – Tax Deduction upto Rs 1.5 Lakh can be claimed under section 80C of Income Tax Act, 1961.

Example- 8.6% of 15,00000 = Rs 1,29,000/- Per Annum or Rs 10,750/- Monthly.

2. Post Office Monthly Income Scheme ( POMS )

1. The current interest rate of the scheme is 7.3 %.
2. Investment: The maximum amount of Rs 4.5 Lacs can be invested. In case of a Joint Account the maximum 9 Lacs can be invested in the scheme.
3. POMIS does not offer any tax Rebate under Section 80C.
4. This is a 5 years scheme and extendable for 5 more years.

Example- 7.3% of 4,50,000 = Rs 32,850/- Per Annum or Rs 2,737/- Monthly.

3. Bank Fixed Deposits 

1. Interest rates vary from 6.5% to 8.45% per annum for different banks.
2. Interest earned on “Fixed Deposit” would be liable for income tax based on the income tax rate applicable to them.
3. Regular income as interest payouts on regular intervals like Monthly, Quarterly or Yearly.
4. One can invest in FD for minimum period of 7 days and for a maximum of 10 years.

4. Pradhan Mantri Vaya Vandhana Yojana

1. Eligibility – Any Citizen Who has attained 60 years of age.
2. An assured Interest rate of 8 % PA.
3. Return payable monthly for 10 years scheme.

Example- 8% of 7,50,000 = Rs 60,000 /- Per Annum or Rs 5000/- Monthly.

5. Monthly Income Plan (MIP) Mutual Funds

1. MIP mutual funds typically provide anywhere between 8% to 12% annualized returns.
2. Returns are market-linked and, therefore not guaranteed.
3. They are basically “Hybrid Funds” which have 70 – 80 % investments made in debt (Government Bonds and Debentures) and Rest 10 – 20 % in equity.

Example- Aditya Birla Sun Life Regular Savings Fund.