It is important to plan your retirement in advance so that you do not have to depend on others for your financial needs. To get started, you must choose the right investment options for retirement early on in your career. Focus on selecting the safest investment options for retirement, and then compare them on the interest rate, credibility, etc.
To help you make a beginning, here is the list of top 5 investment options that will help you attend to your post-retirement expenses.
Senior Citizen Savings Scheme (SCSS)
SCSS is considered to be a must-have in your retirement portfolio as it specially caters the need of senior citizens. You can apply for the scheme from a post office or any other financial institution. The maximum tenor is 5 years, after which you can extend your investment for another 3 years. Investments made under this scheme are tax-deductible under Section 80C, and offer approximately 8.3% interest.
You can start a fixed deposit for senior citizens to earn guaranteed returns post-retirement. Few financial institutions such Bajaj Finance offer higher FD interest rates to senior citizens, to the tune of 8.75%. You can choose a tenor of your choice, and also pick between cumulative and non-cumulative fixed deposits. Since these deposits aren’t linked to market fluctuations, you can rest assured that you won’t lose your money. In addition, you can use an FD from Bajaj Finance and even take a loan against it. You can also calculate the maturity amount beforehand, by using an FD calculator.
Even after you have stopped working, you can earn regular income through pension plans. You must include it in your retirement portfolio as it is an ideal option that gives you the flexibility to invest in a lump sum or in instalments. You can invest up to Rs.1 lakh each year, for up to 15 years, and earn an interest rate of around 7.6%.
Post Office Monthly Income Scheme (POMIS)
You can open POMIS account for maximum 5 years at any post office in India, and earn returns on a monthly basis. You can either opt for this scheme yourself or jointly, and invest a maximum of Rs.4.5 lakh or Rs.9 lakh respectively, while earning interest of 7.3%. On maturity, you can request to transfer the amount directly into your savings account or reinvest it.
These are long-term investments that mature after 10, 15 or 20 years. The government, or government-authorised entities grant these bonds, and they are issued with the intent of raising money for public infrastructure. These bonds are traded on the market, and offer significant tax-benefits, as the name suggests, as you are contributing to building society.
The best investment plan is one that secures your and your family’s future, and gives you ample returns to fulfil your goals and dreams. So, for your retirement, you can either opt for one of these instruments, or select a combination of investment options to get the highest returns.