My Life, My Decisions
                                                 (A Life Time Decision)

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The future depends on what we do in the present.                      ... Mahatma Gandhi

Retirement Planning:

Retirement Planning is probably as important as career planning, because this is the time when you start losing enthusiasm, energy, income etc. So, This is the time to plan for the rest of your life depending, of course on, how your life has been althrough.This time is inevitable, therefore , if you had planned your life properly, and your investment portfolio is good, you can comfortably relax and enjoy this period, but if not then you plan now atleast , so you have some comfortable and peaceful time.
So, here are some steps suggested to plan for this phase of the life.


Post-Retirement Investment

Savings are not only required during the working life, if possible , one must save even after post-retirement at least in the early period after retirement. There are various schemes/options available , and all these schemes are secured. Some of these are:

Monthly Income Schemes(MIS): After retirement time becomes important as at this time, your regular income either stops or reduces substantially. But you still need regular income for sustenance. MIS, is one scheme available from Post office or mutual fund schemes that comes very handy for the individuals who need regular income.The terms of MIS are:

You usually invest a lump sum and the corpus is invested in various instruments to provide you monthly income. Post office offers interest rate of 8.4% p.a and the maturity period would be 5 years.


Senior citizens saving scheme (SCSS) is just the kind of retirement product you would need post retirement. This is one of the safest investment option for senior citizens, as at this time one cannot take any type of risk. Interest of 9.2% p.a with a maturity period of 5 years is a good option. The account can be opened in post office or any nationalized banks.Salient features of the scheme are:


Reverse Mortgage: Reverse mortgage is a wonderful option given to senior citizens for a regular source of income, particularly for those who could not save much, but were able to create asset in the form property/house. One can pledge his house with a bank to receive income from the bank regularly for a fixed period of time. The amount received will depend on the valuation of the house and the term opted. A recent ruling on this scheme has made the income received from house property under this scheme totally tax free.


Annuity / Pension Plans: Pension plans are available from the insurance companies as well as mutual funds. They would invest a lump sum amount and provide you monthly income just as in the case of SCSS or MIS. Charges from insurance company provided pension or annuity plans are usually higher than mutual funds.The annuity value depends on annuity investment, age and rate of interest.


Fixed Maturity Plan (FMP) in Mutual Funds: FMP's are issued by mutual funds for short to mediuam term.


Liquid Funds and FD’s: Liquidity is very important at this stage of life.Options, mentioned above do not provide for liquidity , that probably one needs as such , you might need to put some amount aside for some emergency. But , one still wants to earn something extra or better returns. Banks, provide saving-cum-fixed deposit i.e. you earn better interest rate at the same time, you can maintan your liquidity. The bank dynamically maintains a balance between the amount kept in savings bank account and fixed deposit account.
Fixed Deposits are always possible and one can go for it at any time. Liquid funds are also tax efficient.


Conclusion :

Here you go!!, you just did your Retirement Planning :).

You can do your retirement planning yourself easily. A financial planner will look into more details and will do perfect planning for you which would be best but this is pretty much great way you can adopt your self. Involve yourself in this journey of Financial planning and you will be amazed to find how much Fun it is.

You may revisit the presentation (Future Value) given in the Saving page.



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