Ways to generate regular income during retirement

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      Ways to generate regular income during retirement

      As we keep on moving towards the last legal age of Goethe tendency of thinking towards the options of the income increases. On one side of the coin, some get prepared from before some starts afterwards on retiring. The biggest question is what and how much is sufficient to do so that it does not get affected and have the same feeling and unchanged life like that of when we were working.

      Types of some waysincome

      • Fixed Deposit-Fixed deposit is an investment scheme that is a platform where one needs to put in a lump sum amount of money for a particular time period. It is mainly done during the earning ages. A person during the earning or salaried age earns and outs into a sum of amount into the deposit. It is more popular with the people of the ’80s and ’90s.
      • The main reason people invest in the fixed deposit is because of the assurance of rate of return. The rate of return does not get affected like that of other investment instruments. Different banks and different financial institutions have different rates. Secondly, the most important thing which is one of the advantages of having a fixed deposit is that it gives the flexibility of terms and tenure.  For the customer who needs a short term investment with a tenure of 3-5 years and on the other side of the coin if someone wants to invest for 8-10 years . It is easily available in the online mode on the website of the prescribed bank. The option to apply and invest online is always there or you can do the same by going physically by the online application.  The online liquidation van be done through online mode only. The first and foremost thing is that one can also take a loan to 95% of the FD amount.
      • If we  talk about the disadvantages of the FD then there are fewer chances of high return. The rates of fixed deposit are decreasing day by day. The tax benefits are less and if the interest income is coming under the tax bracket then will have to pay the interest. There is a lock-in period and will have no to keep even during emergencies. There will be some penalty if someone breaks the FD or redeems it.
      • Senior citizen savings scheme-It is a saving scheme that was introduced in the year 2004 and is governed by the government of India. It is allowed after the age of 60 years. One can open it with a spouse. It does not have any maximum age limit. It is done mainly due to the retirement benefits for the retired officials. The current rate of return is 7.40%. The maximum term is for 5 years and one can extend it for further 3 years by submitting a form. It is illiquid as one has to give a penalty if the amount is encouraged before the expiry of the term.
      • POMIS– A post office monthly income scheme is an investment by which one can earn monthly interest. It is done through the post office. The amount invested is not taxable but the interest earned if it comes in the taxi slab then is taxable. There are ups and downs in the monthly interest as it varies with the market fluctuation but if compared to the other schemes like that of FD, it gives a genuine return.
      • Tax free bonds-Tax free bonds are a better investment instrument, especially for senior citizens. These are issued by government enterprises and this shows a very good risk of free nature. It offers a good source of income for a long time and can be the extended tenure of 10 years.
      • Income from Rent – It will be a good opportunity to earn if the vacant properties or premises are giving rent for commercial or for residential purpose. The income will act as a hedge against the inflation.  The main advantage of the income from rent is that it gives a slight edge to invest the same and have to earn but on the other side of the coin the real estate or the property may not be sold quickly it is a fixed asset and illiquid.  
      • SWP-A systematic withdrawal plan is a scheme of mutual funds where a person is having a chance to get a regular earning without risking the capital. A certain amount is withdrawn which is yearly, semi-annually, monthly. One can go for the option of dividends, a few earning and investing in the mutual fund.
      • MIP– A monthly income plan is a type of mutual fund investment where the corpus is invested in the fields of debt and equity securities which gives a balance of return with safety and without risking the capital. 65% of the total is invested in fixed income instruments and the others in high but risky so that any negative return or risk gets neutralised. ICICI Prudential MIP is an example of that.  
      • Annuity plan for insurance companies– It is an investment scheme where a lump sum investment is done and after that, a regular earning is generated from the same. The insurance company invests in the guaranteed  return instruments and keeps the earnings running for the investors. Blueprint Income, Age up, and AIG direct are some companies that offer the scheme.
      • Other Income– There are other sources of income like lump sum sip, monthly sip, national pension scheme, public provident fund, are some of another source of income which can be invested into. There are many opportunities also like setting up a small scale business, food court, noodle making small scale factories where the investment is not much but earning is good.

      Conclusion

      The best and better option to do something for retirement is to start from a very young age only the more the earnings the more will be the investment the more will be the earning safer retirement the more will be the stability. The younger the investment will start, the larger the corpus will be created.

       

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