Living a relaxed and comfortable retired life is a dream for everyone. People take lots of efforts to achieve a peaceful post-retirement life. Being financially stable in post-retirement life is crucial as you will not have any regular income source. So, what should be done? Invest wisely while you are earning to secure your future. This investment should give you great returns along with the security of your fund. Here are some investment options.
The good old bank fixed deposit. For the most of the working class, bank fixed deposits are among popular choices of investments. It is a reliable source of investment with no risk involved. For the future retirees, fixed deposit works just fine because of its safety and returns. Although, the interest rates on fixed deposit have reduced in the last few years going down to 7.25% per annum for the investments of 1-10 years. The senior citizens get extra 0.25-0.5 % extra per annum. Unlike other investments, the bank deposits have flexibility in tenures. That is why investors choose fixed deposit as they cannot invest their money for a certain period.
Post Office Monthly Income Scheme
The POMIS offers a simple and secure way of investment in which you have to invest a lump sum amount in and on which you can earn benefits at the interest rate of 8.4%. For retirees, it is perhaps the most useful investment as it pays interest on a monthly basis. A single account can hold up to Rs. 4.5lakh with the facility of premature closure after one year. However, the investor will not get the tax benefits. If both saving account and POMIS account is in the same post office, then it offers auto-credit system.
It may not be popular among the retirees, but it is the most sensible source investment. If the investor is willing to take the minimum risk, then he/she can invest a certain percentage into mutual funds. The main purpose is to generate stable returns in retired life. Debt mutual funds can be a great option due to the taxing facility it gets. The income of debt funds gets taxed 20% after indexation, unlike bank deposits where income is subjected to full taxation. For a retiree, debt fund is always beneficial as it is liquid.
The tax-free bonds are only available in the government institutions like the National Highway Authority of India, Housing and Urban Development Corporation, and Indian Railway Finance Corporation Ltd. etc. However, investors should remember a few things while investing in tax-free bonds. These bonds are for a longer period say 10, 15, 20 years. Invest only when you do not require large sum for such a long period. The tax-free bonds have low liquidity. They tax-free bonds usually offer annual interest pay-out rather than monthly.
Investing in a secured retired life is always necessary. A smart, prudent and safe investment is needed, and these options are the most suitable. If you wish to invest for comfortable retired life, do consider these options.