I have about Rs 75 lakh in the bank and I will be retiring in October this year. I want to create an income stream for myself post retirement and want Rs 25,000 per month for my expenses. Where can I put this money?
Radhakrishnan Nair, Trivandrum
You come across as someone who has never invested so far in life. As soon as you turn 60, when you will retire, you should opt for Pradhan Mantri Vaya Vandana Yojana which is for citizens who are 60 years and older. The Pradhan Mantri Vaya Vandana Yojana was launched on May 4, 2017 and the scheme will be available for one year from date of launch. But this policy comes with a maximum Rs 5,000 monthly pension, for which you will need to invest Rs about Rs 7.5 lakh for the next ten years. You could then explore other financial instruments to create an income stream in your retirement.
Now is the time to factor inflation into your retirement, which means you cannot depend on a fixed return instrument, as most of these are reducing their guaranteed payouts. Even bank savings account interest is falling these days. You should consider investing up to 60 per cent of your savings into balanced mutual funds, which do not guarantee returns, but are less volatile when it comes to enabling growth of your investments. Opt for a growth plan and based on your monthly requirement, use the sum to be transferred to your bank account to manage your required monthly needs. The balance sum could be parked in debt funds and even bank FDs, because you may not wish to completely take chances with your retirement money in equities.
