Best Investment Options For Senior Citizens

Updated On Dec 07, 2021

Types Of Investment Options
Endnotes

Regardless of one's age, an individual must always make money work for them. With ageing being a big stumbling block for senior citizens, it is important to find the most compatible investment option in India. Senior citizens can invest in a variety of ways. However, what works for one individual investor might not work for another individual.

Therefore, before selecting the ideal investment plan for senior citizens in India, it is important for individuals to understand the numerous investment possibilities available to them. There are a number of tactics that an individual may use to limit their retirement tax burden to a minimum while an individual begins to save for the future and to continue the process when the time comes to retire. To find more on investment options for senior citizens, read on.

Types Of Investment Options

Following are some of the investment options for senior citizens -

Senior Citizen Savings Scheme (SCSS)

In India, retirees are looking out for schemes that provide them with the maximum level of security and a steady income. Many individuals believe that the greatest senior citizen investment programmes are those that are considered secure because they are backed by a sovereign guarantee, meaning that they are supported by the Indian government. One such investment is the Senior Citizen Saving Scheme (SCSS), a scheme offered by the Government of India since August 2004.

SCSS is a government-sponsored savings scheme. It is a risk-free complete debt instrument. It is available to individuals over the age of 60 and provides the security of a guaranteed income for the duration of the investment.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Life Insurance Corporation's (LIC) Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a low-risk investing pension plan. It had a ten-year term and provided a 7.4% interest rate the prior year. Only senior citizens over the age of 60 can invest in the scheme as a lump-sum investment.

The monthly pension given under the scheme ranges from Rs 1,000 to Rs 10,000, based on the amount deposited by an individual. To avail of the scheme, an individual will have to make a minimum investment of Rs 1.56 lakh and not more than Rs 15 lakh on or before 31 March 2020. However, the scheme has been modified and extended up to 31 March 2023.

Keep in mind that any funds invested in this programme will not be eligible for Section 80C tax rebates. On the other hand, the PMVVY plan is free from the Goods and Services Tax (GST). It also has an interest rate that is equivalent to the senior citizen savings system (SCSS).

Recurring Deposits And Fixed Deposits

Fixed deposits (FDs) and recurring deposits (RDs) are two of the most popular investing options for retirees. Banks also provide senior citizens with a greater interest rate on FDs and RDs. Interest income up to Rs. 50,000 for older individuals throughout a financial year is totally tax-free under Section 80TTB of the IT Act.

An individual might also invest in the Post Office Monthly Income Scheme (POMIS), which provides a consistent monthly income. Though an individual can get tax rebates on investments up to Rs.1.5 lakh in tax-saver FDs with a five-year maturity period. But at the same time, the interest earned on those investments is taxable.

Endnotes

To sum up, research suggests that in a few generations, human life may extend much beyond 100 years. According to studies, Indians have a life expectancy of 70.8 years on average. As a result, an individual will need to prepare ahead of time, evaluate all of their respective life objectives, and budget for the costs that come with them. Years of hard effort must be followed by years of rest and renewal. With a cherry on top, retirement investments in the finest senior citizens plans guarantee exactly that. It guarantees that an individual will happily retire from work but not from living life to the fullest.