When it comes to retirement planning, many people prefer to start early. This approach allows them to enjoy their future without any financial worries. A recent survey showed that close to 62% of people earning between INR 50,000 through 75,000 have a retirement plan.
So, how will a fixed deposit play a vital role in your retirement planning?
This article will talk about retirement planning and how effectively you can use this financial instrument to grow your wealth and prepare for your future.
When it comes to retirement, we talk about financial stability and the medium to have a certain standard of living and livelihood. With fixed deposit interest rates being higher for Non-Banking Financial Companies (NBFC), you tend to grow your wealth faster.
The need for investments for retirement
Investments always come in handy, no matter the time. That is why most individuals focus on dividing their income between savings, investments, and expenses. However, there are other reasons why one should look for making investments:
1. You can plan your investments and save taxes:
It is always about planning when it comes to long-term investments like fixed deposits, mutual funds, SIP, etc. This aspect means that you can save your taxes every year if you plan all these deposits correctly. Thus, it secures your future, and you need not worry about retirement.
2. Certain fixed deposits yield higher interest rates:
When you invest, you need to view all the possible options. Shriram Finance Fixed Deposit scheme for Senior Citizens is one of the most lucrative schemes, which help in setting up the right corpus for your future endeavors. This scheme tends to yield higher interest rates, and you can easily get various types of options for your fixed deposit
3. You can divide your investments under various fixed deposits:
When using a fixed deposit calculator, you need to remember that it is always unwise to tie all your funds up in a single investment. Therefore, when you invest your money, you need to have different deposits, which mature at different periods. If you withdraw from an investment before maturity, you will lose out on money. Hence, laddering and stacking your assets is the first thing on your agenda.
4. Your kids are not your retirement plan:
Many people believe that their kids are their "retirement plan". Thus, they do not meet their retirement requirements. However, the popularity and use of fixed deposit schemes for senior citizens have proven otherwise. It is always nice to have multiple options open so that you do not make any mistakes. Hence, people have now started to take things seriously regarding retirement planning.
What is the sufficient amount of money for your retirement planning?
Considering the entirety of inflation and rising prices of various necessities, determining the right amount of money to retire is not an exact science. That is the primary reason why people invest in senior citizen fixed deposit schemes.
However, the usual approach considers that you want to lead a healthy lifestyle devoid of all kinds of dependencies. Therefore, you should ideally keep aside up to 80% of your annual pre-retirement salary for a base for expenditures and expenses post-retirement.
However, you can choose to keep a similar amount aside in terms of real estate investments, gold and jewelry, SIPs and Mutual Funds, etc.
Why should you invest in Fixed Deposits?
When planning your retirement, it is always wise to choose a fixed deposit over all kinds of investments. The following reasons make it a better decision:
1. They are secure and guarantee returns:
When it comes to any kind of deposit, they have no link with the money markets. Thus, the lender will deliver the promisedfixed deposit yield interest rate, which they showed to you. Hence, it is a highly secure instrument to grow your wealth.
2. You can apply for loans against your deposit:
If you are in an emergency and need a quick influx of money, you can always take a loan against yourfixed deposit as collateral. This strategy helps you be financially dependent and cover your expenses and emergencies without any worries.
3. They can cover your daily and long-term expenses:
With the right term deposit, you can easily plan your daily expenses and long-term goals with the right kind of investment. When it comes to the Shriram Finance Fixed Deposit scheme for Senior Citizens, you have both of these options, and you can always keep your goals in mind.
Based on the kind of plans you choose, you can cover all your objectives — whether it is buying yourself a brand new car or investing in a lavish marriage for your kids.
4. You can easily monitor your deposits:
Unlike other complicated investments like SIPs, stock, shares, mutual funds, etc., you can easily monitorfixed deposit schemes for senior citizens. You will have access to a dashboard where you can keep track of the maturity dates, and sometimes, you can also set it up for auto-renew.
The types of fixed deposits
There are two kinds of fixed deposit schemes: cumulative and non-cumulative.
In the cumulative scheme, the interest gets compounded along with the principal amount. When it comes to the non-cumulative plan, you receive a monthly, quarterly, or annual interest payout.
The latter is suitable for those people who want a steady flow of money post-retirement and want to use that for daily expenditures. However, the former is beneficial for those who have other mediums of income.
The bottom line
With newfound knowledge about senior citizen fixed deposit schemes, it has become imperative that you start planning your retirement. And, who knows, maybe this was the push you were waiting for to make your money and wealth worthy for your retirement.