0For many, retirement means the end of their working and earning life. Unless, one works to take up a part time job or become a consultant, their monthly source of income is their pension or savings. For them the most important thing is to have a monthly source of income and also ways to keep the tax liability at bay. It is a challenge for many retirees to have a good retirement portfolio which includes a combination of fixed income and market linked investments. While most of the people do plan for their retirement plan, it is always advisable for them to have a mix of investment options to cover up their household expenses.
Here are few best investment options for salaried person.
1. Senior Citizens' Saving Scheme (SCSS):
This scheme is the first choice of most of the retired persons. It is also said that the SCSS scheme is a must have in the retirement portfolio. The scheme is only available to senior citizens and can be availed from any bank or post office. This scheme is the best option for retirees looking to invest within 3 to 5 years.
2. Post Office Monthly Income Scheme:
Account The POMIS is a very suitable invest option for senior citizens. Though it doesn’t qualify for tax exemptions, however, people can look at investing it on a yearly basis. The current quarterly interest rate is 7.8 percent which is payable monthly.
3. FDs Or Bank Fixed Deposits:
This is another popular choice that the retirees go for. Fixed deposits are considered as a reliable avenue as the returns are satisfactory with no risks. However, over the last few years, interest rates have lowered. Currently, FDs provide an interest rate of 7.25 percent per annum for tenures ranging from 1-10 years.
4. Mutual Funds (MFs):
It is important for one to invest a portion of their retirement money is Multual Funds as pensions might not be enough for their needs. Remember, inflation will not stop in the retirement years. Studies have stated that equities deliver relatively higher returns compared to other assets, even during inflation.
5. Tax-Free Bonds:
Not many are aware of the Tax-Free Bonds. These bonds are not provided all financial institutions. These bonds are issued by government-backed institutions like National Highways Authority of India (NHAI), Indian Railway Finance Corporation Ltd (IRFC) etc.
One thing that retirees should keep in mind is that these are long term bonds. The bonds only mature after 15 to 20 years. Therefore, one should only invest in tax-Free bonds if they are sure that they will not need the money for that long. Another good thing about these bonds are that the interest is completely tax free.
