From dividend paying stocks to FDs: Best fixed income investments for senior citizens

To achieve your retirement goals, you must have the necessary funds, so seniors are advised by financial professionals to start investing as early as possible during their working years. Seniors can choose from a variety of investment alternatives, but they are less aware of which ones would allow them to have a steady income throughout their golden years. According to an interview with CA Manish P Hingar, Founder of Fintoo “Start investing as early as possible. As investing early in life allows you to get extra profits and returns, this is a piece of advice that almost all financial experts will give you. Life is also as an investment avenue, in which you have already invested hard work, dedication, dreams and most importantly, your time.Now that you have successfully invested everything you could to give you and your family a stable, secure and stress-free, it’s time to reap the benefits and live your retired life the way you want and on your terms.Although retirement may seem like a boring phase of life, the fact is that retirement gives you all the time to do things and pursue your dreams that you couldn’t do because of your work and other responsibilities.”

Manish P Hingar said, “While retirement gives you the time you need, having the necessary savings is essential to pursue your retirement dreams. So, here are some of the most reliable investment options for senior citizens in India that will help you convert your retired life into the life of your dreams.”

Fixed Income Investments for Senior Citizens According to CA Manish P Hingar

A) Shares that pay dividends: Some stocks pay dividends on a regular basis, and these dividends can provide a steady stream of income. Dividend-paying stocks can be a good choice for those looking for regular income, but it’s important to carefully research companies and consider the potential risks of investing in the stock market.

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B) Obligations: Bonds are debt securities that are issued by companies, municipalities and other organizations. When you buy a bond, you lend money to the issuer in exchange for interest payments and the return of principal at the end of the bond’s term. Bonds are generally considered less risky than stocks and can be a good choice for those looking for a more stable source of income.

C) Annuities: Annuities are insurance products that provide a guaranteed income stream for a specified period of time. There are several different types of annuities, and they can be an attractive option for those looking for a guaranteed source of income in retirement. However, it is important to carefully understand the terms and conditions of an annuity before purchasing it.

D) Bank fixed deposits (FD): FDs are a popular option for senior citizens as they offer a fixed rate of interest and provide a regular stream of income through periodic interest payments. FDs are available for different tenures and the interest rate offered may vary depending on the bank and the duration of the deposit.

E) Housing rental: If you own a rental property, you can generate a regular stream of income by renting it out. This can be a good option for those who have a property that is not being used and want to generate some additional income. However, it is important to carefully consider the potential risks and responsibilities of owning a home before taking this step.

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F) Old age savings scheme (SCSS): This is a government-backed savings scheme designed specifically for senior citizens. It offers a fixed interest rate, which is currently 7.4% per annum and has a maximum investment limit of 15 thousand The investment can be made in one name or jointly with a spouse.

G) Correos monthly income scheme (POMIS): This is a savings scheme offered by the Indian postal department that offers a fixed rate of interest, currently at 6.6% per annum, and pays a regular income to the investor through monthly installments. The maximum investment limit for a single person is 4.5 lakh, while the maximum limit for a joint account is 9 thousand

H) PMVVY (Pradhan Mantri Vaya Vandana Yojana): It is a pension scheme launched by the Government of India in 2017. It is designed to provide financial security to senior citizens by offering a guaranteed monthly pension. The scheme is open to people aged 60 and over, and the pension is paid monthly over a period of 10 years. To participate in the scheme, individuals must make a one-time investment in the form of a purchase price, which is paid at the time of registration. The pension amount is based on the purchase price and is paid to the individual monthly for the duration of the policy. The scheme is administered by the Life Insurance Corporation of India (LIC).

It is important to carefully evaluate the suitability of each option based on your financial goals and risk tolerance before making a decision. It’s also a good idea to seek professional financial advice to make sure you’re making the most appropriate investment choices for your specific needs.

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Fixed Income Investments for Seniors According to Vivek Banka, GoalTeller Founding Team

People over 60 and people over 60 should be careful when planning their investments. We have heard many nightmare stories from this section of people falling prey to mis-sold insurance policies where money gets locked up and individuals suffer a huge liquidity crunch.

Some basic investment options/strategies that are simple for these individuals (assuming here that a large portion of these people will fall in low tax brackets due to low income sources)

Fixed deposits – A very simple but effective way to invest safely. Investors here need to create multiple deposits to be able to withdraw some if needed. One can also opt for interest payment option for regular liquidity.

High Quality Corporate Bonds – High-quality corporate bonds that pay regular interest are a good bet where liquidity and safety can be achieved. However, you have to be very picky when deciding which company you are buying the bond from and not just rely on ratings.

Variable income + Fixed deposits + Liquid funds – In this strategy, one can see the deployment of some amount in shares, some in fixed deposits and some in liquid funds which take care of your liquidity requirements. This strategy can generate higher returns than others, but it is more volatile than others.

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. We advise investors to consult with certified experts before making any investment decisions.

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