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7 Investment Options For Your Post-Retirement Needs

Published On Jul 08, 2021 7:05 PM By InsuranceDekho

As people are growing more and more conscious about their post retirement needs, the market has also reciprocated equally and come out with better plans. Even the government has rolled out pension plans and retirement policies which are very helpful to the public but one has to decide which plan is the most bendiival for him. Read to know more. 

7 Investment Options For Your Post-Retirement Needs

These seven investment items are intended just to meet one's needs after retirement. Each of these services has its own distinct features, which you should know. They have various tax advantages that are either at the age of investment or at maturity. However all of them have their own conditions hence it is advised that one should research and discover which of these investment plans is the best to suit your needs. 

  • The National Pension Scheme (NPS)

The National Pension Scheme is a long-term investment product that is managed and controlled by the Regulatory and Development Authority of the Pension Fund (PFRDA). During the postponement phase, one needs to invest until sixty years and then start earning 40 per cent of the corpus of annuity from a life insurance company. The income during the period of deferment and neither the pension is ensured and is completely subject to the underlying class of assets.

  • Public Provident Fund (PPF)

The Public Provident Fund remains a time-tested long-term investment. The Fund is a public provision fund. Since the PPF is 15 years long, it has enormous consequences, especially in later years, of the compounding of duty free interest. The PPF interest rate is fixed on the basis of the return of government securities every quarter. It also constitutes a safe investment since national guarantees support the interest generated and the principal invested.

  • Atal Pension Yojana (APY)

Atal Pension Yojana (APY) is a deferring pension plan that requires age 18 to 40 years and a bank account to save. There are five guaranteed pension plans or options under APY of Rs 1,000 to Rs 5,000 per month at the age of 60. APY provides for five guaranteed pension plans or alternatives. The premium will be calculated based on the amount of pension that you pick. 

  • Employee Provident Fund (EPF)

An employee shall pay a specific payment to the plan under the Employee Provident Fund, and the employer shall pay an equal contribution. On retirement, the employee receives a lump sum, including a contribution from the business and his own interest. The employer's contribution is 12% of the base salary plus low income plus retention benefits. 

  • Mutual Funds Focussing On Retirement

The Franklin India Pension Fund, UTI Pension Benefits Pension Fund, Reliance Retirement Fund and HDFC Retirement Savings Fund are four systems dedicated to retirement savings. Although aimed at retirement, they are substantially less vulnerable to shares that have the potential to achieve strong inflation-adjusted returns in the long term. 

  • Life Insurance Policies Aimed At Retirement

You can invest in life insurance firms' unit-linked pension schemes. The main fact that you have built up guarantees that you must provide according to the regulations has not been as popular as other pension plans. Guarantees are costly, and not only increase expenditures, they also limit the return possibilities. The insurer not only guarantees the death benefit but the maturity at the vested age, i.e. the retirement age, as well. The policyholder is at vested age.

  • The Senior Citizens Savings Scheme

A government-backed saving system is the Senior Citizens Savings Scheme (SCSS). It's safer than bank FDs because the government holds the SCSS cash. The SCSS must have a five-year term that may be extended to another three years. SCSS has a 7.4% interest rate. SCSS investments are tax deductible to Rs 1.5 lakh annually but their interest is taxable.

Take Away

Retirement investment may not necessarily come from the seven investments outlined above. Nothing can be labelled the best, a mixture of several can better serve the objective. None of them are equity focused, which is why it is best to allocate funds for retirement needs via 2-3 equity mutual funds. The objective is to construct a corpus big enough to assist you post your retirement. 

Also read 

Understand the Different Types of Retirement Plans

Why You Must Consider Inflation When Planning For Retirement?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.                            

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