Plan Your Finance Before Your Retirement

The word “Retirement” sounds very peaceful, you might think that retirement means to relax, seven-day weekends, unlimited vacation, sleeping till late afternoon and the list goes on, but if your finances are not well planned then your retirement might get a little chaotic. We have a few golden ways to make your golden years beautiful.

Senior Citizens’ Saving Scheme(SCSS)

There is a Scheme called Senior Citizens’ Saving Scheme(SCSS) which is a must for senior citizens to have in their investment portfolios.  This scheme is only available for senior citizens or early retirees. This scheme can be availed from a post office or a bank by anyone who is above 60. Any early retirees can invest in this scheme but they have to do it before three months of receiving their retirement funds. It has a five-year tenure which can also be extended by three years once the scheme matures.


Post Office Monthly Income Scheme(POMIS)

This scheme is a five-year investment. The investment in this scheme doesn’t qualify for any tax benefit and the interest is completely taxable. The interest can be directly credited to the saving account instead of going to the post office each month.


Bank Fixed Deposits (FDs)

FDs are the popular choice that the retirees choose. The safety and fixed returns go well with the retirees. However, the interest rate has been falling over the years. For people who are looking to save their tax then FD can be a better option. The investment made in this account qualifies for Section 80C tax benefit. Even though the interest income is taxable, there is an amount of tax which are saved at least in the year of investment. There are many banks that offer a rate that is slightly lower than the non-tax saver deposit rates. 


Mutual Funds (MFs)

When a person retires and there are times when the non-earning period extends for another two decades or more, investing a portion of the retirement funds is important. Retirement income through interest, dividends, etc. can cause inflation in retired days. Retirees are always advised to stay away from sectoral funds, mid and small caps. It’s a basic idea to generate stable returns. 


One must plan well about their finances before retirement to have a happy life. Retirement is the time of life when the retiree feels like enjoying their days and spending them lavishly. If one has planned it well with all the schemes and advantages then the retirement life will be fun and carefree.

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