HOW SHOULD SENIOR CITIZENS INVEST FOR REGULAR INCOME AFTER THEIR RETIREMENT?
Investment is very important concept of every one’s life. Whatever age group you belong to, you should always invest your idle money in various type of securities as per your risk appetite rather keeping that
unutilized. Particularly, we have come with various investment plan or opportunity for senior citizens specifically.
We will discuss how should senior citizens invest/allocate their lumpsum money which they get after retirement in form of provident fund, gratuity, leave encashment and other amount, to generate better return for their remaining life after their retirement.
- Senior citizens should focus on 3 criteria(S-L-R) before investing in any securities which are as follow:
S stands for SAFETY
L stands for LIQUIDITY
R stands for RETURN
Before investing in any option, safety is most important criteria for senior citizens money specially.
If safety is not certain in any investment option, senior citizens should not dare to think even about that investment option. Therefore, safety is the first criteria.
Liquidity is the second criteria to invest because senior citizens often need money for different purpose such as medical, health, food, travelling etc. If liquidity is not there, then senior citizens should avoid
investing in such option.
Last criteria are return. If above 2 criteria are fulfill then only senior citizens can think about the return which securities can yield on your amount of investment.
Altogether, if all the conditions are fulfilled only then senior citizens should proceed further to invest in securities. But, generally, in practical life we start with return that how much return can we generate.
That is incorrect way of stepping towards investment for senior citizens.
INVESTMENT OPTIONS FOR SENIOR CITIZENS
Senior citizens should invest in investment options mentioned below:
Types of Investment Rate of Return
Life Insurance
Senior citizens don’t need life insurance after their retirement. They don’t need to subscribe for life insurance. Also, premium Is very high for senior citizens for life insurance.
Rather, earning person must take term insurance of regular income scheme at the young age for the family, which will turn in helping hand in case any mis happening take place to her/him.
Health Insurance
Senior citizens must take health insurance because senior citizens generally face health related issue after 60 years. Health insurance has another benefit that It helps in tax savings also. Deduction of health premium paid are allowed from the taxable income of the assesse. Children can also take health insurance for their parents for tax benefits.
AGE LIMIT DEDUCTION
MUTUAL FUNDS FOR SENIOR CITIZENS?
When senior citizens cross 60 years of age, senior citizens look forward for next 15–20 years. Subject to safety as discussed very above, we can think of making equity corpus gradually by transferring income coming from DEBT instruments and not utilized to equity oriented mutual funds or equity share. (large cap with strong fundamentals) with help of financial planner.
SOVEREIGN GOLD BONDS
Don’t buy physical gold for their personal use as is difficult for senior citizens to take care of. But if want to invest in gold, they can go for GOLD BONDS (8years) through your Bank or Demat a/c.
•Gold bonds have few benefits. You will get Interest at the rate of 2.5% annually on investment in gold bonds. Also, capital gains on redemption of gold bonds at maturity is not taxable.
WHAT SENIOR CITIZENS SHOULD AVOID?
• Stay away from real estate investment.
• Don’t buy physical gold.
• Don’t invest in equity market directly, specially, in F&O.
Note:
Senior citizens those have big amount such as in crores, they don’t need to take lot of risk, don’t need to be so adventurous. They simply try to invest in Bank FD which is safe taking into consideration the tax
saving point.
Senior citizens should look for good tax and financial planner as they can guide you in the better way.
