- Personal Finance»
Investments That Make You Ready for Old Age
Senior Citizens Saving Scheme (SCSS)
An initiative by the Government of India to secure the financial future of senior citizens in the country is the Senior Citizens Saving Scheme (SCSS). The SCSS is specifically designed for retired people and the minimum age to be eligible for this plan is 60 years, according to the guidelines issued by the Reserve Bank of India (RBI). However, retired people who have served in the Defense Services (excluding Civil Defense employees), are eligible to invest in this scheme, irrespective of their age.
The features of the scheme include:
- The minimum amount of investment is Rs. 1,000.
- The maximum investment allowed for an individual is Rs. 15 lakhs.
- The lock-in-period is 5 years but can be extended to three more years.
- The investment is eligible for tax deduction under Section 80C of the Indian Income Tax Act.
Post Office Monthly Income Scheme (POMIS)
This is a monthly scheme by the Post Office of India, under which an account can be opened through either cash or cheque. If you enroll in the Post Office Monthly Income Scheme through a cheque, the date of realization is considered as the date of opening the account. This type of account can be transferred from one bank to another, and in case it is a joint account, both individuals have equal share in it.
The features of the POMIS scheme include:
- The minimum investment under this scheme is Rs. 1,000.
- The maximum investment that can be made is Rs. 4.5 lakhs. In case of a joint account, the amount increases to Rs. 9 lakhs.
- The tenure of this investment is 5 years.
- The amount can be prematurely encashed after one year but before three years, at a discount of 2% of the deposit, and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.)
Public Provident Fund (PPF)
This plan suits people who don't want to take too many risks after hanging up their boots. Money earned through a provident fund can also be invested in other schemes like life insurance or any other type of investment. If you have invested in other sectors, like real estate or equity, you can balance out the risk factor by putting some money in a provident fund as well.
This fund can also be used for tax benefits. A maximum amount of Rs. 1.5 lakhs can be claimed under section 80C of the Income Tax Act. You can investment more than that but cannot claim any benefit for the extra amount.
The interest rate on a PPF is reset every year, since it is based on market risk. Investor can withdraw some of the investment after 6 years but the amount cannot exceed 50% of the balance at the end of fourth year or the immediately preceding year, whichever comes first.
While the other plans allow you to have a better life post retirement, life insurance plans are dedicated to a better future of your family. The money you invest through life insurance options like Birla Sun Life's Retirement Solution can be used by your family to meet their immediate demands, like marriage expenses, education, medical bills, etc., or they can use it to repay any remaining debts.
Family Facts termed spending time your family as “A Wise Investment” and rightly so. So, make sure to build a bond with your loved ones, since there is no better insurance than close relationships you can rely on.
Statistics show that in India, 14% of the people who desired to retire have many plans for life after work but are unable to quit their job because of financial reasons. Don't be one of them!