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How to get regular income post retirement?


How to get regular income post retirement?

If you are thinking of earning regular income post retirement, there are several options worth considering in this regard. Planning for retirement essentially means ensuring a regular monthly income that will help you maintain your lifestyle and take care of necessary expenses. A pension portfolio can be customized and created as per your requirements. These may serve your needs better than regular pension plans from insurance companies. You can invest in mutual funds by choosing SWPs (Systematic Withdrawal Plans). These enable the withdrawal of a fixed amount from investments at periodic intervals. They also help investors spread out their wealth over a certain period of time.

This will help retirees get a monthly income that covers various expenses after retirement. The corpus accumulated upon retirement can be shifted to safer avenues such as debt mutual funds later on. SWPs are also better from a taxation perspective as compared to FDs according to several experts. PPF is another option. Investments in PPF are exempted from taxes and interest rates are also on the higher side. There is a lock-in period of 15 years and the power of compounding will help create serious wealth for investors. PPF can be swapped with products like National Saving Certificates (NSC) or Kisan Vikas Patra post retirement. PPF also comes with partial withdrawals and loan facilities for liquidity.

NPS or the New Pension System offers added tax benefits of Rs. 50, 000 under Section 80CCD of the IT Act which enables investors to get benefits going up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. Upon retirement, 60% of the money can be withdrawn by investors which will be taxed in that year itself and the 40% that remains should be bought for ensuring an annuity which is taxed on a yearly basis as per the income tax slab of the individual in question. NPS is a scheme linked to the market and the returns are based on the performance of the funds chosen by the investor. There are roughly 8 pension fund managers that one can choose from and investments can be made in corporate debt fund, equity or government bond funds.

Another option is to go for insurance and pension income plans. There are retirement plans which come with dual benefits of insurance and investment alike. These are called annuity plans which come with income post retirement. You can either pay a lump sum amount and get pension for a lifetime or pay on a monthly/quarterly or semi-annual basis. In case of death, there is a benefit paid out via the return of the purchase price and a guaranteed surrender benefit that is equal to 10% of the purchase price with the exclusion of taxes. The paid value is based on the current market conditions. FDs will give you assured income after retirement provided you have a sizable corpus to invest.

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