I am a retired this year without pension provision. I can invest 5 to 10 lakhs for a period of three years.
Kindly suggest how to invest.
Ans: Your Situation
You've recently retired without a pension.
You have Rs. 5-10 lakhs to invest.
Your investment horizon is three years.
Investment Goals
As a retiree, your main goals are likely:
Regular income for daily expenses.
Capital protection to maintain your savings.
Some growth to beat inflation.
Low-Risk Options
For capital protection, consider these options:
Fixed Deposits in banks.
Post Office Time Deposits.
Government savings schemes like Senior Citizens Savings Scheme.
Debt Mutual Funds
These can give slightly better returns than FDs.
Consider short-term debt funds or banking & PSU funds.
They have low risk but aren't completely risk-free.
Balanced Mutual Funds
These invest in both stocks and bonds.
They can give better returns than pure debt options.
But they also carry more risk.
Liquid Funds
Good for parking some money for emergencies.
They give slightly better returns than savings accounts.
You can withdraw money quickly when needed.
Senior Citizens Savings Scheme
This government scheme offers good interest rates for seniors.
It provides regular income through quarterly interest payments.
The current interest rate is attractive for retirees.
Pradhan Mantri Vaya Vandana Yojana
Another government scheme for senior citizens.
It provides regular pension for 10 years.
Good option if you want assured regular income.
Tax Considerations
Consider tax-saving options if you still have tax liability.
Tax-saver FDs or ELSS mutual funds can help.
But remember, ELSS funds have a lock-in period.
Diversification
Don't put all your money in one place.
Spread it across 2-3 different investment options.
This helps manage risk better.
Regular Income Plan
If you need regular income, set up a monthly income plan.
You can use Systematic Withdrawal Plan (SWP) in mutual funds.
Or choose investments that pay regular interest.
Finally
Your focus should be on safety and regular income.
Don't take too much risk with your retirement savings.
Consider talking to a Certified Financial Planner for personalized advice.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
