Want to earn monthly income post retirement? Here's where you can invest
Investors have found ways to earn a regular monthly income even post retirement. Here's what you need to know.
Disclaimer: This story is for informational purposes only and should not be taken as investment advice.
A stable income is all anyone can ask for in this costly world. So why should this stop after you retire from your day job?
Ideally, a person starts working at the age of 21 and retires by 60. Investors have found ways to earn a regular monthly income even post retirement. With the right investment, stability during the ‘evening’ of one’s life can be achieved.
One such query was queued into ET’s Mutual Fund helpline that was asking about monthly income post retirement.
“I am a 66-year-old retired person. After the decline in FD interest rates, I started looking for other avenues to generate steady monthly income. I just started mutual fund investments with a lumpsum amount of Rs 25,000 in HDFC Balanced Fund. I want your advice for other mutual fund schemes for one time investment of up to Rs 10 lakh. I want this investment to give me monthly/quarterly income. Apart from this, I want my investments in HDFC Balanced Fund to increase substantially.”
In an earlier report by Zeebiz, we revealed how just by setting aside Rs 4,207 per month in Systematic Investment Plans (SIPs) via Mutual Funds can grow to be a handsome sum.
Total investment amount in 35 years will be Rs 17,66,940, assuming rate of return on investment is 12.5%.
The above specified query had a financial goal to attain with a one-time investment of Rs 10 lakh.
“If you have an expectation of steady dividends, balanced funds can be very volatile. The dividend payout is not certain to happen and the quantum of dividend income could vary a lot. Dividend payout options in MIPs would most suit your need. However, here again you could have instances of low, varying or no payouts. But the degree of uncertainty and range of payouts could be much lower than balanced funds. You could look at investing in ICICI Prudential Regular Income Fund, IDFC Asset Allocation Fund- Conservative Plan and SBI Monthly Income Plan in an equal proportion,” the report said.
Now for those who cannot set aside money for old age there are also a few options where a senior citizen can invest to enjoy a secured post-retirement life.
Senior Citizens' Saving Scheme (SCSS) which offers an interest rate of 8.3%.
National Pension Scheme where investors can earn anywhere between 12% - 14% interest.
Post Office Term Deposit (POTD) Scheme is another option. As of 1 April, 2016, the revised rate of interest applicable on the Post Office Monthly Income Scheme is 7.80% per year, and is payable monthly.
Systematic Withdrawal Plan and Mutual Funds which allows an investor to withdraw money from an existing mutual fund at predetermined intervals.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) which will provide an assured return of 8% per annum payable monthly (equivalent to 8.30% p.a. effective) for 10 years.
National Savings Certificate which is currently at the rate of 8.1% per annum.
And last but not the least, there is always the option to invest in fixed deposits.