The most significant outcome of retiring is not receiving monthly paycheque from your employer. You’ll be relying on your savings for all the expenses throughout your post-retirement life. The chances of outliving your savings are significantly high in such cases.
Wouldn’t it be great if you could continue earning a stable income even after retiring? Fortunately, there are now several different ways in which this can be done. Here is a brief overview of five popular options-
- Retirement Plan
A retirement or pension plan allows you to save and invest towards retirement throughout your working life. After retiring, the insurer will provide regular pensions for life that can function as a stable source of income. Policyholders are also offered the option to choose between monthly, quarterly, bi-yearly, and yearly payout options.
Some retirement plans also come with life cover and rider options such as permanent disability and accidental death.
- Bank FDs
Fixed Deposits or FDs are one of the most popular investment options in India. Retirees can consider investing a lump sum amount in a bank FD to generate regular income. You have complete flexibility to choose the investment tenure and interest payout frequency.
Unlike other investment options such as equity, returns from bank FD is guaranteed and risk-free, making it a smart choice for post-retirement income.
- SWP in Debt Mutual Funds
While most people know about SIP (Systematic Investment Plan) in mutual funds, the SWP (Systematic Withdrawal Plan) is not as popular. SWP allows you to redeem a pre-fixed number of mutual fund units at specified intervals.
Retirees can invest a lump sum amount in a debt mutual fund scheme of their choice and opt for SWP to redeem fund units at regular intervals and generate steady income.
- Senior Citizen Saving Scheme (SCSS)
The government backed SCSS is also an excellent choice to earn regular income after retirement. It requires you to invest a lump sum amount for a fixed duration and earn interest on a quarterly basis. The government decides the interest rate on SCSS every year.
The maximum investment amount is Rs. 15 lakhs, and the minimum maturity is 5 years, which can be extended up to 3 more years.
- Post Office Monthly Income Scheme (POMIS)
If you are searching for a safe and risk-free way to earn regular income after retirement, POMIS can also be a worthy addition to any retirement plan. It is an interest-bearing scheme where you invest a fixed amount every month throughout the working life and receive monthly income after retiring.
The government decides the POMIS interest rate every quarter based on the bond yields of the same tenure.
Generating Regular Income After Retirement
While there are options such as equity investments where you can earn higher returns, stability, and risk-free returns are aspects that one should focus upon after retiring. With no monthly paycheque, you need a stable and regular income to manage your expenses.
Try to know more about these investment options as they can help you generate regular income even after retiring.