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How to Invest your Money Post Retirement?
Post-retirement, a steady flow of income is highly desirable. The money received upon retirement needs to be handled well.
In this short thread, I’ll try and answer some of such investment avenues for senior citizens.
Post-retirement, a steady flow of income is highly desirable. The money received upon retirement needs to be handled well.
In this short thread, I’ll try and answer some of such investment avenues for senior citizens.
1. To manage taxes well, you should diversify the savings in short and long term plans. As a senior citizen, you get an exemption from taxes above ₹3 lakh income.
Your objective is to give better return than bank rates & get a steady flow of income.
Your objective is to give better return than bank rates & get a steady flow of income.
2. Investing in equity is risky but beats inflation and as a senior citizen, you’d like to maintain your lifestyle.
So you can invest in stocks and equity mutual funds for the long term.
Plus, they attract only a 10% tax (LTCG) on income above ₹1 lakh.
So you can invest in stocks and equity mutual funds for the long term.
Plus, they attract only a 10% tax (LTCG) on income above ₹1 lakh.
3. It is advisable that you invest in stocks keeping a long term horizon in mind because the capital gains and dividends attract a higher tax in the short term.
Also allocate 10 to 20% of your total capital. That also if that is something you can live without.
Also allocate 10 to 20% of your total capital. That also if that is something you can live without.
4. For safer long term investment options, Balanced funds or equity-oriented hybrid funds may be the right choice for you.
You can read more & evaluate hybrid funds here - https://web.stockedge.com/mutual-fund-classes?assetType=Hybrid
You can read more & evaluate hybrid funds here - https://web.stockedge.com/mutual-fund-classes?assetType=Hybrid
5. To get tax exemption in your retirement fund, Public Provident Fund (PPF) comes to your rescue.
It is exempted from taxes under section 80C and 10 (10D) of the ITA.
You may extend the existing account and lock in your corpus for 15 years.
It is exempted from taxes under section 80C and 10 (10D) of the ITA.
You may extend the existing account and lock in your corpus for 15 years.
6. If you fall in higher tax brackets, you can go for high-rated tax-free bonds for long term fixed income.
The interest is non-taxable but capital gains are taxed if sold. You can buy them through your broking account.
Check the list here - https://www.nseindia.com/market-data/bonds-traded-in-capital-market
The interest is non-taxable but capital gains are taxed if sold. You can buy them through your broking account.
Check the list here - https://www.nseindia.com/market-data/bonds-traded-in-capital-market
7. You can opt-in for National Pension Scheme (NPS) up to the age of 65.
NPS gives annuities after retirement. Only after 3 years you can withdraw upto 60% of cumulative amount & 20% before 3 years.
To know about taxation & other aspects of NPS, check - https://www.elearnmarkets.com/blog/national-pension-scheme/
NPS gives annuities after retirement. Only after 3 years you can withdraw upto 60% of cumulative amount & 20% before 3 years.
To know about taxation & other aspects of NPS, check - https://www.elearnmarkets.com/blog/national-pension-scheme/
8. Even before you reach the age of 60, are around 55-60 years, you can save your money in the Senior Citizen Savings Scheme (SCSS) for a period of 5(+3) years.
At the same time, you may open multiple SCSS accounts but cumulative investment shouldn’t exceed ₹15 lakhs.
At the same time, you may open multiple SCSS accounts but cumulative investment shouldn’t exceed ₹15 lakhs.
9. Various insurance products give an annuity after paying a lump-sum as per age and market rates
Be alert & claim deductions under section 80CCC but payouts may be taxed if it exceeds the exemption limit.
A good option if income & interest received falls in the 10% tax bracket
Be alert & claim deductions under section 80CCC but payouts may be taxed if it exceeds the exemption limit.
A good option if income & interest received falls in the 10% tax bracket
10. You can read my full article on @OutlookMoney at https://www.outlookindia.com/outlookmoney/magazine/story/retire-and-earn-more-630
