Once you achieve financial freedom, it is vital to invest in safe and secure financial assets. This gains even more significance at an old age when regular income stops coming and one has to survive with whatever corpus they have created.
Counterintuitively, one may decide against investing in any financial instrument at all. But that would mean losing out on your savings gradually to the menace of inflation.
Therefore, it is better to keep your corpus invested in a retirement fund, which is safe and secure. For senior citizens, it is recommended to invest in the right financial instruments that are not only safe and secure but also deliver healthy returns at the same time.
On this World Senior Citizens’ Day, we list out a few financial instruments in which senior citizens can earn decent returns without risking the safety of their capital. These are some of the few financial instruments that are safe for senior citizens.
Financial instruments: Where safety meets returns
Fixed deposits: Almost all banks offer an extra 50 basis points to senior citizens for locking fixed deposits (FDs). This is one of the most popular and safe investing options, particularly among the old people.
Health insurance: Earlier, there was a cap on the age limit of 65 for buying health insurance, but the insurance regulator (IRDAI) removed this cap in April 2024. So, with the age limit gone, senior citizens should invest some money in health insurance.
Debt mutual funds: Another set of financial instruments is debt mutual funds, which offer a slightly higher rate of interest to investors. These instruments include liquid funds, money market funds, and corporate debt funds.
Post office monthly income scheme: This can be opened in multiples of ₹1,000. The maximum investment limit is ₹9 lakh in a single account and ₹15 lakh in a joint account.
Senior citizens’ savings scheme: There will be only one deposit in the account in multiples of ₹1,000 and a maximum of ₹30 lakh.
The deposit made at the time of opening of the account will be paid on or after 5 years from the date of opening or after the expiry of each block period of three years, where the account was extended.
Financial freedom
Importantly, investors must start saving early and that too consistently to be able to achieve financial freedom at the right age, i.e., before retirement.
“For effective retirement planning in India, start early and invest consistently to benefit from compounding returns. Set a clear retirement goal, estimating your future expenses and accounting for inflation. Diversify your portfolio basis your risk appetite with a mix of equity – both domestic & global (for growth), fixed income (for stability), and commodities (for hedging) for long-term wealth creation,” says Siddharth Alok, AVP, Investments, EpsilonMoney.
Avoid deadly mistakes
While it is important to start early, it is equally important to avoid making deadly mistakes, which can lead tothe complete wipeout of your investment.
“Alongside starting early, avoiding big financial mistakes is equally crucial. For example, investing in risky stocks without a proper understanding or putting money in real estate projects that never materialise can erode wealth significantly. Therefore, good retirement planning is about striking the right balance starting on time, investing consistently, and avoiding pitfalls that can derail your long-term financial freedom,” says Sachin Jain, Managing Partner of Scripbox.
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