5 Best Investment Options For Retirement

Adhil Shetty

One wants to be tension free after retirement and so financial constraints should not come in the way. Few investment options for a hassle-free retired life.

Retirement can be a scary experience if you have not planned it well during your heydays. At the age of retirement, your ability to earn money will greatly reduce as you will be out of the workforce. So, unless you have made prudent and wise choices in your earning days, you will struggle to make ends meet. Hence, it is important to plan for your retirement early in your life. Here a few best investment options to breeze through the rainy days of your life.

Annuity Schemes

There are various pension schemes available in the market to provide you with monthly income once you choose to retire. Choosing the right annuity plan is important to fulfil your needs.

Annuity schemes are available depending on the type of amount you wish to receive and when and how you want to receive the pension. There is life annuity plan that gives guaranteed pension till the death of the person or life annuity with return of corpus where apart from regular monthly pension, the corpus is returned back to the nominee on the death of the person. Besides, few pension schemes are targeted at the weaker sections of the society. Atal Pension Yojna has a monthly contribution as less as Rs 42 per month for a monthly pension of Rs 1000 per month. The contribution increases depending on the nature of pension plan chosen.

PPF and NPS

These are among the best investment options for retirement. You can invest as less as Rs 500 per month up to a maximum of Rs 1.5 lakh per year. Interest rates keep fluctuating depending on the average bond yield in the previous year. But what’s great about these investments also get tax benefit under Section 80 C for the contribution made to this fund. In fact, for National Pension Scheme (NPS) you get an additional tax benefit of Rs 50,000 other than the Section 80 limit of Rs 1,50,000.

Salaried professionals get PF deduction every month as part of salary break-up. But in addition to that, you can opt for a new PPF, which you can easily open at your nearest post office or even leading banks.

Mutual Funds

Savings for retirement can be hassle-free and more fruitful if you can create wealth in the process. In such situations, Mutual Fund comes to your rescue as it can provide greater returns than other traditional forms of investment tools such as fixed or recurring deposits. You can invest in liquid, debt or equity funds depending on your risk-taking ability.

For those who do not have sound knowledge of the financial markets, they can go for Systematic Investment Plan (SIP) and let it do the job for you. SIP will invest in more units when the price is low and fewer units when the price is high. You can invest as low as Rs 500 per month. This is a great way to create wealth and set a retirement fund for a peaceful and secured life post 60.

Exchange Traded Funds

There are two ways to invest in Exchange Traded Funds or ETFs. You can either invest in Index or gold. Gold ETFs saves you from the difficult job of hoarding gold for retirement. ETFs invest in gold on behalf of you. ETFs can be traded similarly like shares on the stock exchange.

Tax-free Bonds

The market has seen a rise in investment in this tool significantly in the last few years. Basically, bonds are a type of loan that a company or even the government takes from you and promise you tax-exempted interest on it. Generally, this investment option is made for the duration of 10 to 15 years and offers interest rates in the range of 10-12 percent. However, it is best to check the interest rates before buying them.

Hence, it is important to make a wise and prudent choice of investment tools during your earning days to secure your retirement life.

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