Retirement generally means the end of the earning period, this is the time when people enjoy their lives by relaxing at home. Some even prefer to pursue their hobbies, but this isn’t enough, you need a regular cash flow or a decent amount saved in your bank account to live a relaxed life. And to achieve this Building a retirement portfolio is a must. But, in order to get better returns, it becomes important to start investing early, this will help you to enjoy your life after retirement as you will be getting a decent lump sum amount / or regular income after your retirement.
So, let’s start with some of the schemes which can provide you with a regular income after your retirement.
Senior Citizen Saving Scheme (SCSS)
This scheme is exclusively for senior citizens, the scheme helps them get a good amount of money after retirement.
The scheme generally offers an attractive interest rate ranging from 7 to 8% per annum. The amount invested in this scheme usually matures in 5 years and has a provision to be extended to 3 more years if the account holder is willing to do so. The maximum amount you can invest in this scheme is ₹15 lakh and can expect quarterly interest pay-outs for liquidity needs.
Another important thing with this scheme is, tax is deductible from the source investment.
Invest in Fixed Deposits: Investing in fixed deposits are the most popular investment tool in India for decades. FD does not only keep your money safe but also provides you interest on the amount invested. However, the interest offered by FD is not much and on average, it ranges from 7 to 8% per annum.
So, it is more profitable to start an FD when young, keep investing the returns over and again. Doing this will help you get a good amount at the time of retirement for sure.
National Pension Scheme (NPS)
Investing in an NPS account is a low-cost and tax-efficient instrument to build a retirement fund. You can decide the amount of investment monthly, quarterly or annually.
Your NPS account gives you access to a unique Permanent Retirement Account Number (PRAN), which can be used across India. When investing in this scheme you get a pension from your invested amount after your retirement. This is a completely transparent and flexible scheme and is best to have if you want regular income after your retirement.
Additionally, your contribution towards your NPS account gives you a tax benefit up to ₹ 1.5 lakh under section 80C of the Income Tax act.
Retirement Plans/Insurances
Having a life insurance policy is always beneficial, as it not only covers your life but also provides a decent amount at the time of maturity.
There are even life insurance companies that offer specially designed retirement plans that provide the benefit of life insurance and investment both.
For these policies, you need to pay periodic premiums. These premiums are completely tax exempted and you can deduct this amount from your income while calculating taxes. Taking these plans early can give you better returns than too on low premiums. Doing this will also help you to get regular pay-outs after your retirement.
There is also a provision, according to which you can withdraw 33% of the corpus in a lump sum and the balance amount is paid as a pension throughout your life.
Pension ULIPs
Pension ULIPs are somewhat different from traditional pension plans. This is because ULIPs invest in equity markets among other investments whereas traditional pension plans invest only in government bonds. The premiums paid towards the plans are eligible for tax exemption under Section 80C which is up to a maximum of ₹ 1, 50,000.
Other than this returns on pension plans are fixed and are much safer. A unit-linked pension scheme is ideal for investors who are ready to take the risk given the volatility of equities. However, when investing for the long term the investor stands a better chance of accumulating a larger corpus.
In terms of tax benefits, there is no difference between both investments.
To make your future secure and enjoy a financially secured retired life, have a diversified investment portfolio. And in order to gain maximum returns invest in multiple schemes.

