Factors to Consider while Choosing Investment Options for Senior Citizens

It is important to retire without having any financial worries or outstanding debts. Alongside this, you should also ensure that you earn a steady income and good returns from your investment folio to finance your expenses post retirement. To do this, you will need a proper retirement plan that includes ideal investment options for senior citizens. There are a host of options available for you to choose from such as fixed deposit for senior citizens, post office schemes, etc.

Here is the list of factors you need to consider while choosing the safest investment option for retirement.

Secure Risk-Free Returns

To earn risk-free returns, you should invest your savings in FD for senior citizens with a financial institution or post office. This will ensure that you don’t lose out on any money, especially given the absence of a salary. FD interest rates vary with each issuer, so use an FD calculator to compare lenders and select the one that gives you returns without any risk.

NBFCs like Bajaj Finance offer Fixed Deposits with risk-free returns of up to 8.40%. In addition, to senior citizens, they offer an additional 0.35% interest and an extra 0.25% interest on renewal.

Invest in the Right Schemes to get Regular Returns

Once you retire, you need a regular source of income to cover your everyday expenses such as healthcare costs, utility bills and travelling costs. Having pension plans or bonds in your portfolio is the best way to earn high returns on a regular basis.

You can either deposit a lump sum amount or deposit smaller amounts at regular intervals to enjoy benefits. Apart from pension, instruments like bonds, Employee Provident Fund, Public Provident Fund, etc., can help you provide for your future comfortably.

Consider medium-risk options to beat inflation

You can deposit your retirement funds into equity-backed instruments as they offer higher returns, and so help you beat inflation. That being said, your focus must be on creating a diverse portfolio, where around 70% of the amount is invested in secure investments, while the balance 30% is invested in medium-risk investments. So, instead of opting for mutual funds, choose SIPs. They invest in mutual funds in a systematic manner, and carry limited risk too.

Look into tax-saving schemes

There are few investment instruments wherein the principal as well as the interest that you earn is up for a tax deduction. As per Section 80C of the Income Tax Act, one such instrument is the National Savings Certificate (NSC). It offers good returns and is safe for you to invest in. In addition, is no minimum or maximum limit with regards to the deposit amount.

Evaluate flexibility

When you select any instrument, ensure that it isn’t rigid. In situations when you need access to funds quickly, your investment must allow you to withdraw or end your investment on your terms. Company FDs and SIPs, for instance, allow you to do this. In addition, government-backed schemes offer partial withdrawals after a fixed duration. Moreover, when you choose a fixed deposit, you can also use it as collateral and take a loan against it. So, be sure to judge these factors when you build your retirement investment portfolio.

Now that you know the factors you must consider, you can create your retirement plan with ease, ensuring that it caters to your post-retirement goals and lifestyle adequately.