Suppose you want to avoid taking the risk of market fluctuations. In that case, you can put your money in senior citizen fixed deposits, Post Office Monthly Income Scheme, Pradhan Mantri Vaya Vandana Yojana, and Senior Citizen Savings Scheme. All these will help you earn a low but steady interest on investment. On the flip side, if you are risk-tolerant, you can invest in mutual funds to generate a higher return.
What Should You Do With Retirement Money?
What Can You Do With Your Retirement Money?
1. Fulfil Your Bucket List of Wishes
During the long years of your professional career, you may have suppressed many of your wishes in the absence of long holidays that you would have required. You may have stopped yourself from participating in sports activities, expeditions, events etc.
Now after your superannuation, you have endless time. So one of the few things you should do with your retirement money is fulfilled your bucket list of wishes. By meeting your goals, you can restore your inner spark, enthusiasm and energy repressed due to official responsibilities and work pressure.
2. Invest a Portion of Your Retirement MoneyAnother essential thing you need to do with retirement money will be to build and grow funds for the future. You can start investing a certain percentage of your money in different schemes and funds to earn interest and grow your money. Further, this will let you ensure that you do not exhaust all your funds, thereby making it difficult to meet emergency financial situations.
3. Get Health Insurance Coverage
With increasing age, health issues may become recurrent due to physical inactivity, obesity, hypertension, etc. You may have to spend a hefty sum due to emergency hospitalisation.
So purchasing a senior citizen health insurance policy is also one of the essential things to do with retirement money. It will help you cover expenses incurred due to medical treatment up to the sum insured amount. Resultantly, you can avoid paying the steadily inflating cost of medical expenses and avoid depleting your lifetime savings.
4. Go on a Vacation
Now that you are retired, you do not need to take a week off after a long and tiring year to plan vacations. By leveraging retirement money, you can prepare for your exotic trip to your desired domestic or international destinations. This way, you can quench your wanderlust and fulfil your subdued dreams.
If you get your retirement money every month, you can use your savings on your staycation without much hesitation. This is because, since you will get a fixed amount every month, you will not have to bother much about your regular household and lifestyle expenses in the upcoming days.
5. Renovate House
House renovation is also one of the things you can do with your retirement money. You can consider it as a necessary expense if your house has lost its initial attractiveness. Using the money, you can mend the broken tiles of your house, repaint it, and augment it with new amenities.
You can use the lump sum corpus you have saved towards your retirement funds to raise the required money for the renovation project. For example, it can help you bear the burdens of designers, masons and labourers. You can also buy materials like tiles, colours, cement, etc. As a result, you will be able to restore the beauty of your house.
6. Pre-Close LoansIf you have an ongoing home loan, car loan, personal loan or other debt obligations, you can foreclose them using your retirement corpus. Not only will it reduce your worries, but you can also decrease your interest outgo to a large extent. This is because when you pay your outstanding loan balance before tenure, the interest rate stays operative up to that period. For example, if you pre-close your home loan four years before the tenure, you can save four years of interest on your outstanding principal amount.
7. Buy/Build House
Buying or constructing your residential property will also be an excellent idea if you have been staying at a rental property. You can reside on your own property for the rest of your life and eliminate the monthly rent obligations.
Now that you know what to do with retirement money, you can use your funds wisely. Nevertheless, although spending a part of your fund to fulfil your repressed wishes is necessary, you must recognise securing your future. This is why you should stay covered under a health insurance plan and keep your money in dedicated funds for an emergency.
FAQs About What to Do With Retirement Money
Senior Citizen Savings Scheme or SCSS is a savings instrument sponsored by the government for senior citizens. Individuals above the age of 60 can be beneficiaries of the scheme to secure a steady source of income after retirement. The minimum and maximum amounts you can keep in your fund are, respectively, ₹ 1,000 and ₹ 15 Lakhs. Furthermore, you need to stay invested for a lock-in period of up to 5 years.
It is a principle of using the investment amount after retirement. It states that you should limit your withdrawal from total investment by up to 4% in the first year of retirement. After this, you can change the withdrawal limit according to the economic inflation.
The essential expenses you will have to pay in a month after retirement include household expenditures (rent, maintenance, etc.), living expenses, transportation costs, medical/health, and family care. You need to make your monthly budget expenditure wisely.
Important Articles About Retirement Planning
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