Investment Options For Senior Citizens
Updated On Mar 16, 2022
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Seniors have a variety of options for investing. What works for one investor might not work for the next. As a result, it is critical for consumers to understand the various investment options available to them before choosing the best investment plan for elderly citizens in India. When starting to save for the future and continuing the process once retired, there are various ways that an individual can use to keep their retirement tax burden low. Continue reading to learn more about senior citizen investment choices.
Types Of Investments Options
1. Senior Citizen Savings Scheme (SCSS)
Retirees in India are looking for programmes that will give them the greatest amount of security and a consistent income. Many people believe that the greatest senior citizen investment programmes are those that are considered safe because they are backed by a sovereign guarantee, which means that they are backed by the Indian government. One such investment is the Government of India's Senior Citizen Saving Scheme (SCSS), which has been available since August 2004. SCSS is a government-sponsored savings plan. It is a loan product that is fully risk-free. Individuals over 60 can invest in it and receive a guaranteed income for the duration of the investment.
2. Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The Life Insurance Corporation's (LIC) Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a low-risk investment pension system. The previous year, it had a ten-year term and an interest rate of 7.4 percent. A lump-sum investment in the scheme is only available to elderly adults over the age of 60. Depending on how much money an individual has deposited, the monthly pension ranges from Rs 1,000 to Rs 10,000. To participate in the scheme, an individual must invest a minimum of Rs 1.56 lakh and a maximum of Rs 15 lakh by March 31, 2020. However, the plan has been modified and extended through March 31, 2023.
Remember that any money you put into this programme will not be eligible for Section 80C tax breaks. The PMVVY plan, on the other hand, is not subject to the GST (GST). It also has a rate of interest that is comparable to that of a senior citizen savings account (SCSS).
3. Recurring Deposits and Fixed Deposits
Fixed deposits (FDs) and recurring deposits are two of the most popular investing options for retirees (RDs). Banks also offer senior persons higher interest rates on FDs and RDs. Interest income up to Rs. 50,000 is tax-free for older citizens during the financial year under Section 80TTB of the Income Tax Act.
Individuals can also invest in the Post Office Monthly Income Scheme (POMIS), which pays out a consistent monthly income. Individuals can earn tax rebates on investments in tax-saver FDs with a five-year maturity period up to Rs.1.5 lakh. The interest earned on those investments, on the other hand, is taxable.
4. Post Office Monthly Income Scheme
POMIS (Post Office Monthly Income Scheme) is another excellent government-sponsored savings plan that allows investors to set aside a certain amount each month. Following that, interest is calculated at the applicable rate and paid to the depositors on a monthly basis.
This plan is designed for investors who want a guaranteed monthly income but do not want to face any market risks. As a result, it is more beneficial to retirees or senior persons who have reached the end of their earning potential. Individuals can have an unlimited number of accounts, but there is a limit to the total amount that can be invested across all POMIS accounts.
To recapitulate, research predicts that in a few generations, human life could be extended much beyond 100 years. According to statistics, Indians live for an average of 70.8 years. As a result, an individual must plan ahead of time, assess all of their personal life goals, and budget for the costs associated with them. Years of dedication must be followed by years of relaxation and regeneration. As a cherry on top, retirement investments in the best senior citizens plans guarantee it. It ensures that a person would retire happily from work but not from life.
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.