6 Smart Options for Investment Planning Post-Retirement

Most of your essential day-to-day expenses like food, rent and clothes still require cash in hand, alongside your other investments. You will also need some cash handy for holidays and other activities to enjoy your retirement. However, it is important to make sure that this money is working for you, rather than simply sitting in a bank account earning little interest. You may want to consider putting your money in a savings account with a good rate of interest, or in a money market mutual fund. These options will enable you to have ready cash in hand while also ensuring your money is put to work in generating  more money.

This is another way to grow your money in a slow but steady manner. Bonds can help you fight inflation without taking significant risks. Tax-free bonds issued by government institutions like Power Finance Corporation Ltd (PFC) and Indian Railway Finance Corporation Ltd (IRFC) enjoy high safety ratings. Because these are listed securities, you can also trade them on stock exchanges. But remember that these are long-term investments that usually mature after 10+ years, so they are a good option as long as you will not need the funds during that period. They offer low liquidity and pay-outs are received annually rather than monthly.

While investing in stocks can be risky, they can still be a part of your portfolio, albeit with a more conservative approach after retirement. Choosing the right kind of stocks is extremely important – try to look for stocks with a slow and steady growth trend that can offer dividends to give you a consistent return. 

This remains an attractive investment option even after retirement. Effective asset allocation is the key here. You could opt for mutual funds focused on bonds, as they let you invest in a variety of bonds, often with staggered maturity dates. You can then get consistent income and have your bond investments managed by experienced professionals. You may also want to consider mutual funds focused on dividend stocks, managed by professionals. Debt mutual funds too, can make for a suitable investment since they are liquid.

If you own property, you can rent it out to earn a substantial income. If you do not, you could consider purchasing property for this purpose, provided you have the means. Opt for an area with high current demand to garner a healthy rent. You will, of course, have to put in some time and effort as a landlord, or pay to hire someone to perform these duties.

The government offers a saving scheme to senior citizens and early retirees. Known as  the Senior Citizens’ Saving Scheme (SCSS), anyone over 60 years can avail of this through a bank or post office. SCSS has a 5-year tenure, which can be further extended by three years after maturity. This scheme allows premature withdrawals and is also eligible for tax benefits under Section 80C.