Your 30s are a time to explore the best elements of life and what it has to offer. However, to make the most of this time, it is best to plan ahead, so you can ensure a comfortable retirement too. When it is time to plan for retirement, knowing where to invest money is important.
Financial advisors suggest putting aside some part of your earnings every month into a savings account dedicated to retirement or investing your surplus income into high-interest options. Depending on your risk appetite and finances, you can choose from a wide range of investment options to help meet this need.
Remember that these investments secure your post-retirement years and it is in your best interest to opt for an option that can sufficiently provide for it. It helps to consider typical retirement expenses such as medical bills, medicines, monthly spends, and housing costs. This way, you can estimate how much you would actually need and which investment can provide for it.
To help narrow your search down, here are some long-term options that will help you prepare for your 60s with ease.
Public Provident Fund
A PPF investment is ideal for tax savings, as it enjoys an EEE status. It allows you to earn great returns due to its long tenor in combination with compounding interest. Typically, your PPF account matures via a tenor of 15 years earning a fixed interest. This rate at present stands at 8%, but it is reset every quarter.
Also, all interest gains are completely tax-free and you also claim an exemption of up to Rs.1.5 lakh on your PPF investment every financial year under Section 80C of the Income Tax Act.
You can also extend you investment indefinitely in blocks of 5 years after the initial 15-year tenor. This is especially effective at earning returns because it is unaffected by market volatility and is one of the safest investment options.
NBFC Fixed Deposit
An NBFC Fixed Deposit is arguably one of the most secure and steady ways of investing for your retirement. This is because of the fact that it offers a fixed interest rate that brings in returns regardless of market volatility. Additionally, you also benefit from a higher interest on renewals.
For example, when you invest in the Bajaj Finance Fixed Deposit(FD), you get an additional 0.10% on renewals and enjoy annual interest growths of up to 8.95% for senior citizens and 8.60% for regular investors at a tenor of 36 months or more with interest payable at maturity. Additionally, it is also incredibly affordable to invest in as the minimum investment amount is only Rs. 25,000.
This FD also has the highest CRISIL (FAAA) and ICRA (MAAA) rating, ensuring that your investment is never at risk. You can also ladder your FD investments to earn returns at different tenors.
Atal Pension Yojana Scheme
The Atal Pension Yojana scheme is a Government of India pension initiative that focuses its efforts on financially aiding working-class citizens. Here you remain are assured a monthly pension ranging between Rs.1,000 and Rs.5,000. In addition to your monthly contribution, the government contributes an amount toward your pension corpus. The contribution is a combined effort and the amount depends on the monthly pension payout option you choose and your age at the time of entry.
The Government of India will pay 50% of the contribution you pay or Rs.1000 annually. It is a relatively cheap pension scheme that you can opt for as the payments are nominal and mainly cater to the lower-income group. You can avail of this scheme at most banks and even opt for the auto-debit functions to help you stay consistent with payments.
Mutual funds are a cost-effective way of investing in the market for both the experienced and novice investors. This investment vehicle requires you to invest in a fund and the fund manager then takes over and invests your money for you based on your goals. Typically, you are asked to choose between two main types of funds, i.e. debt or equity funds.
Equity funds are the go-to option for retirement investments because they’re more suited for long-term holdings, over 5 years or more. This is because the chance of facing a loss drops drastically with time and since your goal is to invest for years on end, you could see incredible gains with the right fund manager.
When it comes to your retirement, it helps to be prepared as you no longer have a steady source of income. At such a stage in your life, financial security is just as important as your health and you must do all you can to secure your comfort.
Thankfully, through investment options such as these, you can easily cater to this need, provided you’re smart about it. For example, a fixed deposit is your best bet to invest a retirement corpus in simply because of the high-interest rates. This way, you have a way to generate ample funding and also have access to an asset should you need a loan.
Consider getting started on your retirement planning today and apply for an FD online with Bajaj Finance. Simply fill out the form and get in touch with a representative to help you enjoy a hassle-free experience.