10 Retirement Income Strategies | ET Money

A higher life expectancy, inflation, rising medical costs and an un-pensioned society makes retirement planning an essential task for all Indians. We can divide the retirement journey in two parts: the accumulation stage and the income generation stage.The accumulation part consists of investing via products like the employee provident fund, PPF, fixed deposits, NPS, mutual funds, LIC policies etc. The second part i.e. the income generation.

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🎥 How to Plan your Retirement?
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📝 CHAPTERS

00:00 Introduction
01:15 Fixed Deposit
03:09 Senior Citizen Saving Scheme
05:23 Pradhan Mantri Vaya Vandana Yojna
06:52 Post Office Monthly Income Scheme
08:07 Rental Income
09:48 Reverse Mortgage
12:13 Annuities
13:57 Govt Securities
15:22 Earned Income
15:56 Systematic Withdrawals from Mutual Funds

📝 FIXED DEPOSIT
Interest received from fixed deposits is a popular income option amongst retirees and one can understand why. A bank fixed deposit is safe, it is easy to start, convenient to operate, offers fixed returns and has been the practice, senior citizens receive an extra interest of 0.25 to 0.5% on their deposited amount.

📝 SENIOR CITIZEN SAVING SCHEME
The Senior Citizen Saving Scheme is a government-backed retirement benefits program that is specifically designed for retirees. This scheme can be availed from a post office or a bank by anyone above the age of 60 and has a 5-year tenure which can be extended by a further 3 years.

📝 PRADHAN MANTRI VAYA VANDANA YOJANA
PMVVY is a voluntary pension scheme offered by the Life Insurance Corporation of India which provides a fixed pension for 10 years. Any person above the age of 60 can invest upto 15 lakh rupees in this scheme which presently promises a return of 7.4 percent.

📝 POST OFFICE MONTHLY INCOME SCHEME
The Post Office Monthly Income Scheme is a 5-year maturity scheme that is regulated by the Government of India’s Department of Posts.

📝 RENTAL INCOME
Real estate is a favorite asset class amongst retirees and I know of many who have accumulated two or more houses in their lifetime. Barring the one they stay in the rest of the houses can be and probably, does get rented out on which rental income is received on a monthly basis.

📝 REVERSE MORTGAGE
A reverse mortgage is a post retirement financial product that gives senior citizens a regular source of income. The process starts with the senior citizen pledging his or her house with a bank which then pays a regular amount to this individual over a period of time..

📝 ANNUITIES
An annuity is an insurance contract that’s designed to generate a steady retirement income for the annuity buyer. Annuities in India are offered by life insurance companies like LIC, HDFC Life, ICICI Prudential etc. wherein a policyholder pays a lump sum amount to the insurer .. against which a regular payout is made to this individual.

📝 GOVERNMENT SECURITIES
Many financial planners recommend government securities as an alternative to annuities for the reasons that government issued securities are super-secure with no credit risk, these are available for long tenures like 30 years, these bonds offer semi-annual interest payment, they can be sold in the secondary market and although there are up and down cycles in line with interest rates with a little awareness and active investing, one can secure returns in the range of 6 to 8%.

📝 EARNED INCOME
Retirement does not mean that one should stop working. In that context, an excellent strategy to ensure one doesn’t run out of money is to work full-time or part-time in your retirement years which can include remote assignments, taking classes at a nearby college, buying property and turning them in for a profit etc.

📝 SYSTEMATIC WITHDRAWALS FROM MUTUAL FUNDS
SWP is a redemption strategy by which investors can withdraw a fixed amount of money at regular intervals from their mutual fund investment corpus.

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