Retired /Senior Citizens /Monthly Income / Retirement Funds

Reverend, senior citizens my this blog is dedicated to you only !

Forget Fixed deposits, Post office ‘s MIP etc. and switch to Mutual Funds through STP/SWP in some balanced funds.

Investment options for Retired people and Senior citizens

In last couple of years the change in world economy fairly affected us , hence some hard steps which were taken by the government for our economy were unavoidable. Because of this the most adversely affected class is retired community and senior citizens. Fixed deposit rates and other fixed income instruments had not been so interesting and viable for the last many years.

Because of these changes there is no charm of keeping funds in bank FDs , post office savings scheme or in private FDs. Instead I would suggest that invest in some balanced funds in parts or through STP mode . You may park your funds in some debt funds with annual interest of 4 % plus and switch to balanced funds(8-10 % ) through STP mode. (this is what I think is the better way)

For regular income out of your investments, best suitable option in my view is SWP

( Systematic Withdrawal Plan ) with monthly or quarterly options ,that may give 8-10 percent post taxation yield . The tenure of investment must be more than 3 years at least. The main advantage of this SWP system is that you may redeem some fixed number of units every quarter or month like MIP ( Monthly Income Plan in post office )

Tax benefits

Taxation is same as in equity products. Balanced funds are considered in equity category. So on monthly or quarterly withdrawal the short term capital gain tax to be levied and that too, only if the units redeemed were @ more than purchased price. Also, after some years on final redemption there would be long term capital gain to be levied above Rs 1 lac profit.

So ,I am quite convinced with some of the schemes of mutual funds ,that might perform better than what I mentioned and that too with your capital protection in longer term. * The contents shared above are my own views and that are for your information purpose.