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Mar 2022
5 mins read
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4 Schemes to Earn Regular Income After Retirement

The post-retirement period is a special phase in most people’s lives. You’ve worked hard, accomplished your major goals, taken care of your responsibilities, and you’re now looking forward to a well-deserved period of relaxation and leisure.

You are also able to enjoy the fruits of your financial planning. The big difference is, you may not have a regular income now. You may dip into your retirement corpus, but inflation, market volatility and unexpected expenses may dent its value. At the same time, rising life expectancy might make that corpus seem a little smaller than you first thought. You might begin to worry about managing your monthly expenses. To stay on top of these expenses and achieve your ambitions in retirement, it would be useful to maintain a regular source of income.

A detailed personal finance plan can help you measure the income you need, and therefore the kind of income sources you should explore: To help you get started, here are four instruments you can rely on to generate a regular income and enjoy your life after retirement:

1

Senior Citizen Savings Scheme (SCSS)

If you are looking for the right investments for retirement planning, this scheme may help. Offered at banks and post offices, it gives you an interest rate of 7.4%1 per annum with quarterly payments. Notably, the interest you earn from SCSS is taxable, though you may claim deduction for invested capital up to Rs. 1.5 lakh (subject to TDS) under Section 80C.
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2

Mutual Funds

You can continue to invest in mutual funds after retirement, choosing funds based on your risk appetite. One option is Systematic Investment Plans (SIPs). These can help you ride stock market volatility and average out the purchase cost of your holding over the long term. You might also consider Systematic Withdrawal Plans (SWP). These allow you to withdraw fixed amounts at specific intervals, assuring you of a steady income every month. In retirement, short-term debt funds may make more sense than long-term funds. 
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3

Post Office Monthly Income Scheme

This small savings scheme is another way you can earn a fixed, monthly income. You can expect an interest rate of 6.64% per annum. The lock-in period is 5 years and there are monthly pay-outs. The interest is taxable, although TDS isn’t applicable here. You may invest up to Rs. 4.5 lakh per person, or Rs. 9 lakh in the case of joint accounts. 
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4

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

This government-supported scheme is offered by the Life Insurance Corporation of India (LIC). You can expect an interest rate of 7.4% annually, capped at 7.75%. You may choose a monthly, quarterly, half-yearly or yearly payment frequency. 
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Schemes like the above mentioned can give you a steady income, in order to meet your expenses and live the good life, even as you maintain a healthy retirement corpus. Do consult your financial advisor to start maximising your funds for a secure retirement.

Source: 1. https://www.centralbankofindia.co.in/en/Senior_Citizen_Deposit

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