Retirement years can be more peaceful if you have accumulated enough wealth to live a financially independent life, which is only possible when you start investing at a young age. Read further to know how you can make your savings last during retirement with the best investment plan for retirement.
The percentage of senior citizens in India is proliferating, and it is expected to reach 20% of the overall population in 2050. As the older people population continue to increase, one of the growing concerns for them is retirement savings. Even if you work diligently in your early years and have saved enough for later years, there will be times when you may not be able to meet the monthly expenses post-retirement.
It is paramount that you think of investment options that could help you build a corpus for life. For retirees, they must make the best use of corpus that allows them to save taxes and earn a regular stream of income.
If you are looking for the best investment plans for retirement, you can consider the following options:
An initiative by the Central Government of India and the Pension Fund Regulatory and Development Authority (PFRDA), NPS is a long-term investment plan for retirement. A subscriber can regularly invest during his/her working life, withdraw a corpus in a lump sum and use the rest of the corpus to invest in an annuity to procure regular income for retirement. Any Indian citizen in the age of 60 can subscribe to NPS.
SIP is the best ways to invest in mutual funds for retirement planning . If you’re a private sector employee, you can plan for your retirement with SIP as it helps to accumulate and compound wealth in an affordable manner. SIP is a systematic approach to invest in mutual funds. There is no minimum requirement for SIP investment. Any Indian citizen can invest in SIP .
PPF is another long-term, government-backed investment plan that offers an attractive interest rate and returns. You can open a PFF account at any nationalised bank or post office. It has a minimum tenure of 15 years, and you can start investing as low as Rs.500. PPF offers risk-free returns. Any Indian citizen can invest in PPF, except for HUF and NRIs.
This is a trusted investment plan that has existed for a long time in India. The long-term account allows you to deposit lump sum money for a fixed period, and you get assured returns. The interest rate is fixed at the time of opening the account, and it remains the same throughout the tenure. The account offers guaranteed returns. As compared to standard FD schemes, senior citizens are eligible for higher interest rates that range from 3.50% to 8.50%.
These are long-tenure bonds wherein the maturity period ranges from 10 to 20 years. It is an ideal retirement investment plan that fares well as against the debt funds and fixed deposits. It is best if you’re looking for regular income during the retirement phase.
Banks and Post Offices offer SCSS, which has a 5-year investment plan. However, you can also extend it for an additional three years. As compared to all other fixed income tax products, SCSS offers highest post-tax returns. This scheme is available only for senior citizens and to early retirees. At present, the interest rate for the period January-March 2020 is at 8.6%.
POMIS is a highly reliable investment product under the purview of the Finance Ministry. It is a low-risk plan that guarantees steady income generation. The plan has a maturity period of 5 years, and you can start investing in it with an initial investment of Rs.1500. Visit nearest post office to initiate POMIS. Any Indian citizen can open POMIS account.
All the investment plans, except for POMIS & Tax-free bonds, are subject to tax-benefits.