With age comes knowledge and experience to make better decisions. However, your ability to earn would reduce, as you grow older. Hence, it is important to start saving for retirement at a young age. Saving and investing a good amount of money when you are young will give you immense benefits once you reach your retirement age.
When you plan to save for your retirement, it is not enough just to have an ordinary bank account. You need a good long-term savings plan specially curated for retirement. Banks provide senior citizen savings account with additional benefits and offers so that you can enjoy while you retire.
Currently, there are many savings and investment options through which you can save for your retirement.
Here is a list of a few below
EPF [Employee’s Provident Fund]
Start saving in EPF if you are a salaried person which will be beneficial in the long run. But you must not withdraw from EPF savings if you want to get long term benefits. If you take loans from EPF or close it down prematurely, then you might not be able to reap the benefits fully.
Senior citizen saving scheme
This Government-sponsored scheme is popular among senior citizens and is available only for senior citizens and those who plan to retire early. SCSS is a long term saving/ investment that acts as a steady flow of income for senior citizens. It can be availed from banks and post offices. The scheme has a tenure of 5 years but can be extended for 3 more years.
Post Office Monthly Income Scheme
It is a five-year investment scheme with a cap of Rs.9 lakh for joint ownership account, beneficial for senior citizen couples. The interest rate on the account, which is 7.7%* p.a is paid every month, and the interest amount is credited into the same bank account.
There is also the option to reinvest in the scheme post maturity for another 5 years to get double benefits:
Fixed deposits
Fixed deposits are another famous choice among senior citizens for saving money. It is easy to operate; it is safe and gives a fixed return without any risks. Fixed deposit is available for a maximum tenure of 10 years, thus enabling FD holders to start retirement planning in advance. In addition, senior citizens get extra 0.50% of interest on FDs that means more savings in the longer term.
Mutual funds
Early investment in mutual funds can give big benefits in the longer term due to higher profits. For that, you have to start investing in it before your retirement. Mutual funds are guided by market fluctuations and can are subjected to risks. But if properly planned, it will give you greater returns compared to other investment avenues like fixed deposits.
Tax-free bonds
Tax-free bonds are offered by government-backed institutions, which are extremely safe to invest for senior citizens and non-senior citizens with guaranteed returns. These tax-free bonds are available for 10, 15 or 20 years. Hence you must invest in tax-free bonds before retirement so that by the time you retire the bonds will also mature, and you will get the benefits.
Proper planning at young age can let you retire with a huge sum of money. Start planning today, one-step at a time.