There are many channels for investment for senior citizens. You can invest in senior citizen fixed deposit, Public Provident Fund, Recurring Deposit, or even keep the money you have accumulated in a savings account. You have to keep changing your investment portfolio as you grow older with changing life goals. This is often the most challenging time to invest as your source of income is limited.
Investment goals of senior citizens
After 60 years of living, you are often retired or close to retirement at this age. In most cases, all your life goals with respect to your children, their education, their marriage and such are accomplished. Now the aim is to get the highest returns possible that can give a steady source of income and keep your capital safe. Most risky or longer tenure investments are not tenable at this age.
You need a regular amount of money to maintain your lifestyle and look after any medical needs that may arise at an older age. The trick is to keep a buffer for emergencies and unexpected expenses and still keep the same safe and in an instrument that can keep beating inflation and give steady returns.
Where should a senior citizen invest?
You have to be very risk-averse and conservative when it involves investment in the golden years of your life. It is a better idea to avoid high-risk investments in Real Estate and Equity in a new way. You can never be sure when you buy a property. Some big projects have not been able to provide possession on schedule. Always remember to live in the present. It is good that a legacy is continued. But the truth of the matter is that the financial institutions have a limited approach to senior citizen
You should consider investment instruments that match the life stages
Investment should be done keeping in mind the life stages of the investor. At this point, you should have a monthly or quarterly income, with capital safety and tax breaks. The money should not be locked away in case of an emergency, it should be accessible.
The Recurring deposit does not suit this phase, as there is no income flow to maintain the lifestyle and pumping money into a recurring deposit may prove difficult. The PPF is also not a very great idea as the lock-in is fifteen years. If you already have an investment it might be worthwhile to add another 1.5 lakhs every year till maturity of the PPF.
The senior citizen fixed deposit sounds like the best option as it is safe. The banks pay the highest fd rates and you can easily choose to receive the interest on your fd as a source of fixed income. You can choose the tenure from 7 days to 10 years. The Senior citizen can rest easy that their money is parked in a safe and return-oriented instrument. These qualities make the senior citizen feel safe and secure. They know that their money is in safe hands!