As you approach retirement age, you are bound to feel anxious about whether you have enough financial reserves to live comfortably after you have quit working officially. It may so happen that you have not accumulated enough or that you started accumulating it a tad late.
So, there’s a lot of catching up to do to build that retirement corpus. Fear not; it is never too late to begin shoring up your post-work capital. Here’s a workable recipe for you to invest smartly after retirement.
- Calculate Much will you Require to Live out your Retired Life
Once you realise that you can save and invest even when you are retired, the next step is to do some
self-evaluation. There are several questions which you will have to find the answers to. Considering the lifestyle, you are currently comfortable with, you will have some idea of how much you require to live out your retired life now and say five or 10 years from now.
For example, if you require Rs. 30,000 to meet your daily expenses today, the same amount will not suffice five years hence. Inflation over time will erode the purchasing power of your money. So, it’s better to think ahead and shortlist safe investment options for senior citizens.
One of the best options is investing in fixed deposits as they offer guaranteed returns unlinked to the markets. Additionally, you can sign up for Senior Citizen FDs as they offer higher payouts with a higher FD
interest rates. For example, the Bajaj Finance FD for Senior Citizens offers cumulative and non-cumulative FDs at a higher rate of up to 8.75%.
- Start Building your Retirement Corpus
Once you have a fair idea of the quantum of funds you will require to live out your retirement phase, the next step is to start collecting money for it. Every rupee you gather adds to your financial weight. The financially heavier your retirement corpus becomes, the more resilient it becomes to any upsets or shocks. Therefore, you should not hesitate to get back any money that you have lent to your dependants
and add this to your income. Yes, after retirement you will have more income from passive sources, but ensure you keep track of them all. Whether it is fixed deposits, equities, mutual funds, property investments or more, every source of
income is valuable in its own way. Once you have your income in your hands, you can use investment forecasts via FD calculators, for example, to see how you will earn. Compute the right FD interest rates
and also check if you get higher earnings on your FD renewal. This way, you can start investing your money in the right channels.
- Fulfil Debt Obligations
If inflation is an impediment to happiness, debt is not far behind. You do not have to be retired to realize that the worst let down to enjoying your large cash corpus is having to pay a large chunk of it as debt. If you are paying any loan EMIs, do your best to clear them off as soon as possible. It is better to live
comfortably and debt-free than to let liabilities continue to be a thorn in your side. This way you will enjoy more mental peace and plan your retirement expenses better.
- Avoid Taking Additional Risks
The well-trodden path is the one to take when you are retired. Taking chances on something you are unsure about is not something many senior citizens are keen on doing, and with good reason. So, be cautious about your hard earned money, and if you cannot eliminate risk, keep it to the minimum. Rely on Senior Citizen FDs, PPF earnings, Senior Citizen Savings Schemes and other investment options that give you assured earnings.
- Make Insurance a Mandatory Part of your Portfolio
Unforeseen circumstances like medical emergencies and calamities can subtract a large portion of your retirement capital. The purpose of having an insurance policy is so you can have a readily accessible source of money when something unexpected strikes. An insurance policy becomes even more essential if you consider that you no longer have your salary to depend on. So, ensure you and your spouse sign up for one.
- Don’t Exclude Tax Payments
Retirement is not the end of your tax woes, although being a senior citizen does give you some special privileges as far as payment of taxes is concerned. But, if you have not invested in the right schemes, you may simply be wasting earnings on taxes.
You may not have income from your salary but you have income from other avenues such your property, FD interest, shares, debentures and more, all of which are taxable. Pension is also taxed depending on your income tax slab rate and also whether you have received it as a lump sum or in instalments. So, learn about the benefits of Form 15G/15H and do your tax planning carefully.
Using these 6 tips, you can invest your money smartly even after retirement and enjoy a fulfilling life.