Retirement is one of the most emotional events in one’s life. It is a beginning of a new journey for an individual who has worked for most part of his life in corporate sector. Average life expectancy for an Indian is around 66 years of age which is expected to increase in coming years. Adding to the above point, inflation is also one thing which will continue to increase in nearby future. With above two factors in mind, you should clearly plan for retirement from the day you plan for retirement and it should be as early as possible. Let us look at some of the best investment options available to you as an investor for retirement –
- Senior citizens saving scheme – It is one of the best investment options/best saving plan available for senior citizens in India. Entry barrier for this best investment plan is 60 years and 55 years in case of voluntary retirement. The interest rate offered is 9.3% for this investment which is higher than quite large number of debt paying saving plans.
- Post office monthly income scheme – It is one of the best investment plan available for retirement in India. The interest rate offered is 8.4% and investment cap is 4.5 lakhs for single account and 9 Lakhs for joint account. The maturity period is 6 years for this investment option. Moreover, if you stay invested for entire duration then you can get the additional benefit of 5 percent.
- Post office time deposit – it is quite similar to fixed deposits and minimum investment is Rs 200.One advantage of this investment option is that interest is calculated quarterly on investment.. The investment tenure can be between 1 to 5 years and if you stay invested for 5 years then you can also get a tax deduction under section 80C of Income Tax Act.
- Fixed Deposit – It is considered as one of the best investment plan for retirement. One advantage of this scheme is that senior citizens also get additional interest of 0.25 over and above normal interest rate. You have to stay invested in duration of 1 week to 10 years in this investment options.
- Reverse mortgage – It is one of the best investment options available to a individual approaching retirement and have lot of properties with minimum cash. In this type of mortgage retired person keeps his house as collateral and bank pays monthly payments to individual. Moreover, cash flows obtained from banks are not taxable as it is a loan from the bank and not an income.
- Market linked products – It is advisable for a retired person to keep a small percentage, usually 20% to 30%, in market linked products like STP, SIP, Equities etc. This form of investing will provide a growth to the portfolio and will increase the corpus available to investor.
- Fixed maturity plans – This investment options is close ended debt mutual funds with tenures ranging three months to three years. One advantage of fixed maturity plans is that it gives returns that are 50-100 higher than fixed deposit returns.
Retirement is one of the most crucial events in one’s professional career and it should be one of the most exciting period in one’s life. We have already mentioned best investment plan available to a retiring individual and you should always remember that like other things in life , retirement planning, can also vary with one individual to the other individual. We thank you for reading this article on best investment plan available to you on or before retirement and we hope that you would benefit immensely from this article in having a fulfilling retirement.