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Should senior citizens venture into equity markets to take charge of their finances?

In the old age, it’s advisable to keep equity exposure low to preserve the capital from taking a dip due to the vagaries of the stock market.

August 29, 2020 / 05:32 PM IST

While the emergence of India as one the youngest nations in the world is well-known, a UN report pointing towards an increase in the share of older persons aged above 60 in the country’s population to nearly 20 percent in 2,050 deserves a special mention as well.

This is because when it comes to providing social security for the elderly, the measures are found to be wanting. A study revealed every second elderly person in India is concerned about his/her social and financial security, with more than one-fourth of respondents depending on children or close relatives for their financial needs.

Given the state of affairs, it becomes imperative for the elderly to be in charge of their finances so that they can spend the golden years of their life stress-free. So, how can they do so? Let’s find out.

Focus Should Be On Your Money

With a full stop on active income, it’s imperative for you, as a senior citizen, to focus on your money and prioritise your needs. In our society, it’s not uncommon to find the elderly funding needs of their children, such as marriage, buying a house, etc., from their retirement corpus.

This jeopardises their needs and makes them vulnerable to various contingencies coming their way in the old age. A prudent way to go about it is to bear a part of such expenses.

This not only shields them from the specter of old-age poverty but also alleviates any guilty feeling arising from not being a helping hand.

Invest in Fixed-Return Instruments

In the old age, it’s advisable to keep equity exposure low to preserve the capital from taking a dip due to the vagaries of the stock market. It makes sense to spread the retirement corpus across fixed-income instruments to ensure steady cash flow.

Thankfully, many such avenues can help you build a channel of income to take care of post-retirement needs. For example, the Senior Citizens’ Savings Scheme is a government-sponsored scheme that provides quarterly pay-out. Investment in it also qualifies for tax exemption under section 80C of the Income Tax Act, 1961.

The rate of interest, reset every quarter, remains fixed for the entire tenure of the scheme. Post Office Monthly Income Scheme is another small savings scheme that senior citizens can bank on.

With a monthly pay-out, the scheme also allows premature withdrawal in case required subject to a nominal penalty.

Keeping volatility at bay, these schemes preserve the principal amount, are easy to understand, offer assured returns, and, most importantly, are highly liquid.

Ensure All Nomination Details are Updated

A big part of financial freedom and stability in the old age hinges on this critical but often overlooked aspect. Updated nominee details ensure your spouse is not left in a lurch in your absence. Stress levels can zoom if nomination details aren’t updated, resulting in legal nitty-gritty.

Equally important is to keep all documents pertaining to investment and insurance in one place, and keep acquaintances in the loop. This comes handy in the event of a crisis.

In Conclusion

Diligence, coupled with an active interest in money matters, can help the elderly be in command with their finances in the old age. Keeping away from uncharted waters goes along in securing the dusk of life.

(Rahul Jain is Head Edelweiss Wealth Management)

Disclaimer: The views and investment tips expressed by experts on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.

Rahul Jain
Rahul Jain is the EVP at Edelweiss Wealth Management.
first published: Aug 29, 2020 08:57 am