Investing is an art that requires you to deploy different strategies depending on when you start investing. The investment done at a younger age is based on high risk, high return strategy. When one transits from a young age to retirement age, the approach moves towards a steady return strategy with lower risks.
Key Investment Criteria After Retirement
With smart planning, life can actually begin after retirement. When you plan for retirement, investment criteria should be the safety of your hard earned money, regular income for routine needs and some emergency fund. Reputed Non-Banking Finance Companies (NBFCs) like Bajaj Finance provides investment options for senior citizens to fulfill all the below criteria.
Safety of the Principal Amount
After retirement, you will not have regular income from salary; hence there will be little chance of new savings. Therefore, it is of utmost importance that you safeguard the principal amount. Senior Citizen Fixed Deposits from NBFCs like Bajaj Finance comes with AAA rating, which ensures the highest standards of safety.
In the absence of a steady salary, you may need regular income for daily needs. Bajaj Finance Fixed Deposits gives the option of interest payment periodically or at maturity. You can choose monthly, quarterly, half-yearly or yearly interest income as per your choice. The Online FD calculator available on the website can also help you decide the exact investment amount as per your monthly income need.
One should always be ready with funds during emergencies. Fixed Deposits from Bajaj Finance offer you the flexibility to withdraw money during times of need. You may get lower FD interest rate than the one you get when you avail the fixed deposits. The crucial point is, your emergencies can be dealt with at the cost of a little interest.
Things to Avoid in your Retirement Strategy
Retirement planning is one of the most strategic financial decisions that you will make in your lifetime. On one end, you will have a vast corpus which needs careful management. On the other hand, you will not earn income regularly in the form of salaries.
To smoothly navigate this journey, you must ensure that you avoid making the following mistakes:
Investing in Lower Grade Investment
The protection of your retirement fund is your topmost priority. Make sure you never put your capital at risk by investing it in Fixed Deposits with grade lower than AAA. Such instruments may offer little bit more interest, but your capital is exposed to more risk. You can instead opt for companies like Bajaj Finance that offer you higher interest rate than banks and provides AAA-rated security.
Investing in Single Deposit
You may never know when you will need some of your savings in case of an emergency. For example, if you have 10 lacs in your retirement fund, make sure you invest in two-three different Fixed Deposit schemes of 3-4 lacs each. This arrangement will give you the flexibility to break only one FD in case of emergency, and rest of the fund will continue to earn higher interest. You can explore investment options offered by Bajaj Finance Fixed Deposits for senior citizens to design your FD portfolio.
Investing Everything in Cumulative Deposit
Fixed deposit is your regular source of income. Make sure you invest in FD with correct tenure and interest income period which suits to your daily needs and lifetime. For example, it is better choice to invest with five years’ tenure and monthly interest income against the one-year cumulative option, if you primarily rely on interest income during your retirement.
At the same time, if you invest everything in monthly income schemes, you may lose the chance to reinvest a small portion of your interest income to grow your portfolio.