The first thing that worries you after your retirement is the fact that you will no longer draw a monthly salary. With unending expenses and a tight budget for a middle-class family, saving sufficient money for post-retirement years is almost impossible. But the right financial planning can ensure a decent regular income for your retirement years.
Bank Fixed Deposit
The fixed deposit is the most availed option for retirees because FDs come with a regular and fixed income. Fixed deposit investments offer a whopping growth to your money and deliver high interest rates. Fixed deposit interest rates are usually 0.25% higher for senior citizens.
Tips to Increase FD Returns
Fixed deposit investments provide stability with higher returns over a fixed period. So it is worthwhile investing in a scheme withhigher fixed deposit interest rates.
Here are some steps that you should follow if you intend to make the best use of your fixed deposit returns.
Browse Investment Plans
Planning to invest in a fixed deposit scheme is not enough to get higher returns. You must learn to manage your fixed deposit skillfully. Reinvesting your money once your fixed deposit reaches the date of maturity is a great option. Many financial organizations offer lucrative fixed deposit interest rateson renewing your investment.
File Tax Returns Timely
You should be punctual as regards filing your tax returns is concerned. File your returns with Form 15H (for those who are aged sixty years and above) to avail of exemptions from tax.
Fixed Deposit Laddering
The best way is to divide your investment money across a couple of fixed deposit schemes. Using this strategy helps boost your financial reserves, helping you manage your expenditures without many hardships. Also, multiple dates of maturity help you gain tax benefits.
Cumulative and Non-Cumulative FD Schemes
Cumulative fixed deposit investments help you expand your financial corpus as compounding encourages gains from fixed deposit interest rates. On the other hand, non-cumulative fixed depositschemes facilitate a regular income which makes them the best investment option for retired individuals.
Real Estate Investment
The demand for housing and real estate is steadily rising. Investing in property will help your money grow by leaps and bounds. The capital you put in here is a value-based investment where the monetary value grows over time. But you must invest wisely in areas which are in high demand and soaring prices. Giving your housing property out for rent can also be a great source of monthly income.
Mutual Fund Investment
Mutual funds enable you to earn high dividends in a periodical manner even as offering growth and value to your invested capital before your financial contract gets over. There are different types of mutual funds that you can pick from, such as tax-saving funds, which will help you gain tax exemptions too.
Senior Citizens Saving Scheme (SCSS)
The government has initiated many schemes for the senior citizens which can benefit them after post-retirement. One such initiative is the Senior Citizens Saving Scheme (SCSS) which offers its buyers fat interest rates of a whopping 9.2% where you can invest a maximum amount of fifteen lakh rupees. Tax is exempted from the principal amount. The capital invested in this scheme matured in five years. The time limit can be extended up to three more years. The interest, in this case, is incurred every quarter.
Post Office Monthly Installment Scheme (POMIS)
POMIS pays out its clients every month, generating a steady income. Thus, this scheme is very popular among retired folks. To avail of this scheme, all you need to do is to invest a minimum of fifteen hundred rupees. The upper limit for investing in this scheme is capped at 4.5 lakh rupees. The interest rates of POMIS ranges from 7 per cent to 8 per cent. However this scheme is taxable, and therefore might not be suitable for individuals who come under a higher income bracket.
These five easy ways can help to simplify your financial complications after retirement. Choosing from these alternatives will help you gain robust returns, that will only enhance your financial corpus. So, if you are mulling over how to manage your expenses post-retirement, feel free to opt from among the options elaborated here. A period of a peaceful retirement phase awaits you!