World Senior Citizen Day 2021 : Have a solid financial plan for your twilight years!

(Image: Reuters/File image)

Silver hair breezing past wrinkled smiles while doling out a lifetime of wisdom and delectable food-its a vision we’ve grown up with, on those mandatory, Nani-house summer vacation trips or in our home, right? There’s really no one better confidante, support system, and adviser than our grandparents. And today, on the occasion of World Senior Citizen Day, we especially celebrate the brilliant lives of our elderly. 

The 2011 population census estimated around 103 million senior citizens in India, constituting almost 8.6 percent of the population. And if projections are to be believed, their populace is set to rise around 3 percent annually, touching almost 320 million in the next 30 years to come. 

And in such a case, with rising life expectancy rates and old-age no longer bound to any conventions, sound retirement planning, and a comfortable financial corpus to maintain the desired lifestyle in the sundowner years of life is perhaps the best gift to have! Planning well in advance is perhaps, the golden rule to building a perfect corpus for your retirement, but here are a few schemes and mutual funds you can consider, apart from the universal favorite FDs to ensure the absolute best for those carefree years to come, or enjoy:

Conservative, Debt-Focussed Mutual FundsGenerally, there is a reduced appetite for risk and wealth creation as retirement approaches, with capital preservation taking precedence. In such a case, a debt/fixed income mutual fund is a good option, since they invest in high-quality government bonds, corporate bonds, and money market instruments, which combine regular, albeit lower returns than equity along with the safety and stability of your investments. 

An added plus is that they are highly liquid, meaning you can easily withdraw money within a short time period. You can also opt for hybrid funds, which have a higher or a balanced concentration of debt funds to get exposure to high-return equity as well, along with a solid backing of debt funds.

Senior Citizen Saving Scheme (SCSS)This is one of the most popular financial schemes for the elderly since it promises a higher rate of returns (7.4 percent this quarter) and a steady income fountainhead as compared to traditional instruments like Bank FDs and regular savings accounts. With a duration of 5 years, an option of opening multiple accounts, and the maximum, or ceiling amount set at Rs 15 lakh, this income, received on a quarterly basis is fully taxable. 

Floating Rate Savings Bonds, 2020With a 7-year tenure and a varying interest rate regime that changes on a half-yearly basis and is currently set at 7.15 percent for the period between July-December’21, you can start off in these bonds with a minimum amount of Rs 1,000 and no maximum limit. The interest rate is pegged at 35 basis points above the prevailing NSC (National Savings Certificate), yet another savings scheme’s interest rates. 

Pradhan Mantri Vaya Vandana SchemeIf you’re off to a late start, the Pradhan Mantri Vaya Vandana Yojana (PMVVY) is perfect for you! As Viral Bhatt, Founder, MoneyMantra, a Mumbai-based personal finance advisory explains, “Since the scheme has been extended till March 2023, enrolments are possible, and beneficial as well, since the scheme assures a pension of 7.40 percent per annum payable monthly, and reset thereafter annually. The maximum amount of investment is capped at Rs 15 lakh”. At the end of the policy term 10 years hence, provided that the pensioner survives, the amount invested along with the final pension installment shall be paid back. 

Post Office Monthly Income Scheme (POMIS)This scheme has a tenure of 5 years and once invested, you can be assured of consistent interest rates applicable till maturity. For the quarter ending 30 September 2021, the interest rate has been set at 6.6% per annum, payable monthly. One can invest a maximum of Rs 4.5 lakh in a single name. Apart from guaranteeing a regular income and a minimum investment value of Rs 1,000, you also get to earn returns higher than conventional FDs. 

So, make the most of your twilight years, fulfill all your vacation and unfinished ambitions, without letting money become an obstruction! Start today!