Inflation will continue to be about for years, even although we maintain progressing as a nation. Hence, investors in particular senior citizens will have to maintain inflation in thoughts anytime they invest in any avenue. There is no doubt that the danger-taking potential of senior citizens will stay low, but they can’t rely entirely upon low-danger investment alternatives like fixed deposits and quick-term debt funds to take care of their wants all through the post-retirement stage.
Harshad Chetanwala, Co-Founder, MyWealthGrowth.com, says, “An individual can follow the bucketing strategy where he/she can invest in different avenues by creating buckets based on their needs and withdrawals. The investment for short term requirements can be in liquid funds & banks, for the medium-term it can be in debt funds and small savings schemes, whereas for long-term withdrawals one can consider equity diversified mutual funds. One can split one’s investment into the above given three buckets and withdraw every month from the assigned bucket for a defined period.”
He additional adds, one way could be to invest in liquid and bank accounts for the close to term or quick month-to-month withdrawals for a couple of years. At the very same time, one could invest in debt and tiny saving schemes along with equity funds for withdrawal in future.” Following this technique will assist the investment in debt and equity to develop though the investor withdraws from quick-term instruments.
Here is how one can invest in 3 buckets that can assist them take care of post-retirement costs across years:
Investment | Monthly withdrawal |
Low Duration Funds, Bank Account & Fixed Deposits | First 36 months (First 3 Years) |
Debt Funds & Senior Citizen Saving Scheme | Next 108 months (4th year to 12th year) |
Equity Funds (Index Funds and Large & Mid Cap Funds) | Next 156 months (13th year to 25th year) |
Experts say, such a technique can work effectively and prevent outliving the savings post-retirement. Chetanwala says, “When the investment is done across different asset classes and instruments the overall return can beat inflation.” Havings stated so, it is constantly advised to maintain aside some contingency funds in the bank account all the time even with the above-recommended buckets to take care of any emergency.
What are some of the inflation-beating investments alternatives for senior citizens?
There are a variety of investments alternatives for senior citizens to invest in, with desirable interest prices and returns. Some of the well-liked investment alternatives that senior citizens can look incorporates Senior Citizen Savings Scheme, Pradhan Mantri Vaya Vandana Yojna, Tax-Free Bonds, Corporate Fixed Deposits of very good organizations, quick and medium duration debt mutual funds, Banking and PSU Debt Funds, Corporate Bonds Fund and Equity Diversified Mutual Funds (Index and Large Cap). These are some of the investment alternatives that can assist one beat inflation in the longer term.