World Senior Citizens' Day 2025: Savings plan for your parents with regular monthly income
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Representative image Photograph: (ANI)
Post-retirement plans for senior citizens must provide a fixed income without jeopardising the safety of their investments. On World Senior Citizens' Day, here's a list of some financial instruments to achieve that financial goals.
Post-retirement days can be one of the best times in life, as senior citizens are often free from many responsibilities. Additionally, senior citizens have the time to pursue what they have always wanted to do, but couldn't due to their responsibilities towards their children, family, and work. However, they must be financially free to achieve their post-retirement life goals. Their retirement corpus should provide them with a safety net, fulfil their monetary need, and achieve growth so that they have enough money all their lives. Here are some savings instruments for senior citizens.
Senior Citizens Savings Scheme (SCSS)
This scheme provides good interest rates for individuals over the age of 60. It pays quarterly interest and has a 5-year lock-in period. It carries an income tax benefit. The upper limit of the deposit is Rs 30 lakh. The lower limit is Rs 1000. Spouses can also open a combined account. The annual return is an impressive 8.2 per cent. The tenure of the scheme can be extended to three years.
Post Office Monthly Income Scheme (POMIS)
The second most important scheme is the Post Office Monthly Income Scheme. It provides an income at an annual rate of 7.4 per cent and is exempt from TDS. An individual can invest as much as Rs 9 lakh. In a joint account, one can invest Rs 15 lakh. An investment of Rs 15 lakh can give a person Rs 9250 every month. If you are an individual account holder, you can get up to Rs 5500. The tenure of this scheme is five years.
Senior Citizens Bank Fixed Deposits (FDs)
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Bank FDs are a safe savings option for most, but they are infamous for giving comparatively lower returns. However, senior citizens can get around .25 per cent to 0.75 per centhigher returns than others. The payout can be accepted monthly, quarterly, or yearly, or at maturity.
Systematic Withdrawal Plan From Mutual Funds
Senior citizens can also withdraw a fixed amount from their mutual fund investments. It is a flexible way to generate retirement income. It is ideal for those who have a lump-sum savings and can tolerate some level of market risk. Lower risk funds can provide returns between 6-10 per cent.
Senior Citizen Annuity Plans
Senior citizens can also invest their savings into a regular income scheme, also known as annuity plans. The interest rates generally are 6-7 per cent. They provide a steady fixed pension for life.