At any given point in your life, you may depend on others and have others depending on you. While this is the circle of life, when it comes to your security today and tomorrow, there’s nothing as important as financial independence. So, this August 15, its time you thought long and hard about your post retirement years. Think about your lifestyle now and the lifestyle you aim to lead when you’re 60+. Start planning your finances for retirement now by looking for senior citizen investment options, calculating the funds you need, and taking smart steps to ensure you and your spouse will want for nothing when you reach your golden years.
Starting this Independence Day, take a look at how you can plan now to be financially independent after retirement.
Invest your surplus funds
Begin planning for your retirement early in your career by using funds from your bonus or matured savings. While saving is essential, investing part of your savings into high earnings schemes will help you create a corpus of funds for the future. When you are years away from your retirement, use a share of your savings to invest in high-risk high-return options such as stocks.
On the other hand, when you’re nearing retirement, redirect 70% of your savings in safer options that give you guaranteed returns on maturity. You can choose to invest in a Post Office Monthly Income Scheme or a company fixed deposit at this juncture.
Company FDs offer higher rates of interest than banks while giving you the same amount of security when you invest looking at the CRISIL ratings. You can choose Bajaj Finance Fixed Deposits in this regard and gain from FD interest rates of up to 8.40% on your investment alongside the security of the highest safety rating. You can also generate higher interest earnings by renewing your FD here.
Additionally, you can enjoy an array of benefits on these FDs such as online account management, minimum deposit requirements and doorstep document pickup for opening an FD account. After retirement you can park your funds with them by choosing a senior citizen FD and gain at least 0.35% higher rate of interest, going up to 8.75%. So, streamline your financial plans with an FD calculator and begin your investment this Independence Day!
Pay attention to wealth creation
Your income will not generate wealth unless you navigate the funds in the right direction. So, create a portfolio by including the right investment options such as stocks, mutual funds, real estate, and bonds and park in a steady amount in each to see them generate wealth over time.
Compare dividend gains, interest rates, and other terms for each option across companies and issuers to decide on lucrative assets. You can take help from an investment advisor or a fund manager to work out a steady plan, which will help grant you financial freedom in your post-retirement life.
Create a special plan for tax savings
When you are planning investments for retirement and after, do not forget to consider tax-saving options. Invest in assets or instruments that allow exemptions under several sections of the Income Tax Act to reduce your net taxable income and gain from the returns on your investment. You can achieve this by consulting a tax expert to see how much you can invest under various sections.
For example, you can invest in Provident Fund, POMIS, FDs, and bonds to avail an exemption of up to Rs.1.5 lakh under Section 80 C of the Income Tax Act. On the other hand, you can claim benefits of an education loan or home loan too for tax savings. So, streamline your expenditures and investment in such a way that you gain freedom from unnecessary taxation.
This Independence Day, take a step towards becoming financially independent in your post-retirement years. Following these three tips, you will live in comfort and be able to do what you love no matter what your age.