Taking the decision--Post Retirement Investment

As we approach 60 years we will all reach the inevitable “Retirement Age” in India. This does not mean that we cannot work any longer—lots of people do—but for the most part we will have retired from our regular daily routine of going to work.

As we hit this age we understand that we would no longer get our regular salaries and that we would now need to make good with our savings that we have done over the last 38 years of our working life… to some a very disturbing thought.

However if we had planned our savings properly, we would have had saved enough money to ensure that we would lead a good life post retirement. Just live off the interest of the money saved

Simple enough?

Actually No.

With all the lump sum money that we will receive from our PF and Gratuity it becomes even more to understand and be careful of where we invest our money.

There are so many options that one can invest in - Fixed deposits, SBI Senior citizen scheme, PPF, ELSS, Insurance (advisors still sell people insurance even after retirement!!), Short term Debt funds, Long term debt funds, Equity(?) —it becomes confusing.

Here are some basic rules for Investing post retirement.

1. Ensure you have enough cash in your Emergency fund

2. Evaluate what you need as your minimum monthly amount ( post tax) to lead a good retired life

3. Understand your risk Appetite – Key point to understand is that you should understand that you should not take risk that could potentially reduce your capital below what is required to get your monthly Income.

4. Evaluate potential Inflation to come to a calculation of what interest you require to get your monthly income

5. Get to know your potential Tax liability

6. Read a little-- understand each of the potential investment opportunities-- go to sites like moneycontrol.com, Outlook money, moneytoday.in , etc
7. Get comfortable with your financial advisor and your financial strategy

8. Follow the strategy—but ensure you remain flexible to the changing environment


Use a laddering strategy to ensure you have the right investment plan.

1. Keep money in low risk highest possible yield investments—Max those investments. A Good example is the Sr Citizen SBI FD which gives a 9% investment return upto a maximum of 15L. This will give quarterly income to you.

2. Evaluate some good Company Deposits for a 2-3 yr period—some good example is PNB housing finance, Tata Motors are some good low risk deposits available as of now ( Ensure lower Risk and A+ ratings on the CD’s)

3. Divide between Monthly Income plans and Fixed Deposits—Understand the differences between them. MIPs have lower Tax Rates ( indexation or 10% at any income slab). There are multiple options in MIP—from 25% equity to 5% Equity.

4. Evaluate Equity on balance savings if any—Ensure you are taking into consideration the Rules of Risk

5. Stack your returns to optimize your tax strategy—layer out your earnings so that you get the maximum Tax benefits possible-- create a cash flow sheet where you can see how your earnings will pan out.

The most important thing is to understand two things.

1. Its your money—NO ONE cares about it more than you do.

2. Its YOUR FINANCIAL plan—Get involved—ask the right questions—Take help from the right people.


I hope this helps people get started on the path to a happy retired life.

Happy investing.