Selecting the best investment plan for retirement

Selecting the best investment plan for retirement

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27 September 2022

Every individual would want to know about the best investment plan for retirement. During the early years, you may have a good job, and you can plan savings for your retirement. But in recent years, the economy has not been that good and getting a good job after graduation isn’t easy. If you are in college now and are looking forward to your future investment plans, here is what you can do to have the best investment plan for retirement.

If you want to look for the best retirement investment plan, there are several options to follow. They are as follows:

Bank-based FD

It is a long-term investment plan which allows you to invest in a fixed amount for a long period. You can benefit from higher returns and the security of your investment. It has been proved to be one of the most reliable ways to make money. It also offers tax benefits and helps in saving tax as well.

What is FD?

FD stands for Fixed Deposit. Whenever you have an investment plan that gets supported by the bank, it will always be a trustworthy plan for investment. It is the oldest form of investment plan that is present in India. The plan offers an investor to invest a good amount of money for a fixed time for higher returns. It is also, to date, the best investment plan for retirement.

The FD interest rate varies from bank to bank, but it is always higher than any other form of investment like mutual funds, stocks or bonds, etc. You can invest between Rs 1 lakh and Rs 1 crore in this account type at any given time by opening multiple FD accounts depending on how much money you want to invest in one go!

Post office scheme

The post office scheme is a long-term investment plan the government of India offers. It is a very much recognized product under the belt of the finance ministry. The best part is that the plan is at low risk and confirms a good source of income. The period for the plan is around 5 years, and you have the option to invest with a small investment of 1500 rupees.

The post office scheme is a great way to earn money as it offers assured returns on your investment every year. You can get interest on your investment on the maturity date and before the maturity date in case of premature closure of this scheme. Most investors prefer this scheme because it has no exit load or penalty charges for redemption before maturity.

Another great thing about post office schemes is that they are tax-free until maturity, which means you don’t have to pay any taxes on your interest earnings until the maturity period expires.

Post office schemes are available in both savings and fixed deposits (FD) sections of post offices across India.

Tax-free bonds

Tax-free bonds are the most popular and preferred investment plans for retirement. Tax-free bonds have long tenure, and the maturity period will range from 10 to 20 years. It is the preferred and the best investment plan for retirement to support anyone wanting a regular source of income.

Governments and agencies issue tax-free bonds but are not subject to income tax on the interest earned. However, you must know that income tax may be charged on capital gains when you redeem your bond before maturity. The interest on these bonds is exempt from income tax while they remain in your possession. When you redeem these bonds before maturity, it becomes taxable per that country’s prevailing laws.

 

These bonds offer a haven for investors seeking regular income with low risk and no volatility over time. Investors can find several tax-free bond products online, which provide them options based on their requirements, such as duration and yield rate of interest payments, etc.

Invest in SIP

As the name suggests, SIP is one of the preferred modes to invest in mutual funds for anyone looking to plan for retirement. It is seen that employees from private companies are looking to invest with the help of a SIP as it helps them increase their wealth with the help of compounding.

SIP is to invest in mutual funds, and there is no particular requirement for investing in a SIP. However, one should ideally keep their investment period between three and five years. That will help your money grow substantially over time. You can also opt for investing a small sum every month or week, so you do not have to worry about losing out on returns due to volatility in stocks or indices.

Investing regularly is the key to achieving success, and this can get done by investing through SIPs. There are no restrictions on SIPs; anyone can invest in them irrespective of age and income level.

If you want to save taxes while investing your money, consider investing through SIPs as they come under section 80C deductions, meaning there will be no tax liability on investments made through SIPs.

Saving scheme for seniors

 

The senior citizen saving scheme is a type of scheme that is available only for senior citizens and to any employee retiring early. All the deposit schemes have a tenure of 5 years and can get extended for another 3 years. The returns offered in this scheme are the highest compared to other schemes. It can also get termed as the best investment plan for retirement.

 

As the name suggests, it is a type of scheme that is available only for senior citizens and to any employee retiring early. All the deposit schemes have a tenure of 5 years and can get extended for another 3 years. The returns offered in this scheme are the highest compared to other schemes. It can also get termed as the best investment plan for retirement.

The interest rate on these schemes is usually higher than other savings schemes because they are risk-free and meant only for people above 60 years old or who will retire early from their current employment due to medical conditions, personal reasons, etc.

Conclusion

The best investment plan for retirement is one that diversifies the risks and gambles associated with investing. You must invest in some good stocks and bonds, mutual funds, and other financial products. If you do that, you’ll be able to reap better benefits from the profits Read more 

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