The 6 Best Investment Options after Retirement
Retirees find it tough to build a retiree portfolio which is sustainable as people retire at 58-60 whereas they may live till the age of 80-90.
It is the first choice of most retirees as the Senior Citizens’ Saving Scheme (SCSS) is a lucrative investment option for them. This scheme is only available to senior citizens or people who retire early. SCSS can either be availed from a post office or a bank or can be availed by anyone above the age of 60.
The POMIS or the Post Office Monthly Income Scheme is a five-year investment and has a maximum cap of Rest 9 lakh put under joint ownership and the rest 4.5 lakh is put under single ownership. The interest rate is currently at 7.8 per cent per annum and has to be paid monthly.
Bank fixed deposits or FD-A bank fixed deposits or (FD)
is one of the top choices of retirees. It is a minimum risk investment and thus is preferred by retirees, it can prove to be a reliable avenue as it can be easily operated. The only con is that the interest rate in the last few years has been steadily declining. Currently, it is around 7.25 per cent per annum and the tenure ranges from 1-10 years. Senior citizens enjoy an extra 0.25-0.5 per cent per annum, depending on specific banks.
Mutual funds (MFs)
Since the prospect of non-incoming years looms large before the retirees investing a portion of their retirement funds in equity-backed products holds primary importance. The retirement income (through interest, dividends, etc.) will be subjected to inflation during the retired years. Studies have shown some favourable results on equities which deliver higher inflation-adjusted returns than some of the other assets.
Tax-free bonds are not currently available in the primary market but can feature in a retiree’s portfolio. The government-backed institutions usually issues these kind of bonds namely the Power Finance Corporation Ltd (PFC), Rural Electrification Corporation Ltd (REC), Indian Railway Finance Corporation Ltd (IRFC), Housing and Urban Development Corporation Ltd (HUDCO), National Highways Authority of India (NHAI), NTPC Ltd and Indian Renewable Energy Development Agency, and so on.
This is another great option as then retirees can consider the immediate annuity schemes of various life insurance companies. The pension or the annuity is around 5-6 percent per annum and is also taxable. So, as you see there are many options which a retiree can explore to lead a comfortable and free-of-financial worries life!