While you may have saved for your retirement, you may not know when it will last. It is not unusual that some seniors go bankrupt early on after their retirement. This is because they may have been not very mindful of their spending. It is a wrong notion that there is no other way but for seniors to spend their savings. You can still earn and the best way is to invest some of your savings in income-generating projects that will ensure the fast return of your investment.
Here are some of the best ways for seniors to save and invest:
If you are a pensioner with a regular source of income, investing in mutual funds can be a wise decision. Mutual funds earn much higher returns than when you invest in some traditional investment alternatives. One advantage of mutual funds is they are tax-efficient. This is an important aspect that every senior should consider when investing. For sure they do not want the daunting task of tax preparation.
Whether your profits are from short term or long term investments, they are taxed accordingly, so they won’t eat up your ROI. With mutual funds, you are not only assured of greater ROI, but it will also guarantee you that it will be higher than the prevailing rate of inflation
There are many benefits why you should invest in fixed deposits. Probably, the major reason is the assured rate of return. You can choose the bank with the highest rate of interest, so your money can earn more in a particular period of time.
And do you know that seniors are offered more interest on their FD than other investors? If you have less than $10,000 to invest as FD, you will also not be mandated to pay tax on your FD. On the other hand, an FD is easy to liquidate and take a loan when you need cash.
Do not worry about the term, ’fixed deposit’ as it is actually flexible. It is you who will choose the terms, whether your FD will be cumulative or non-cumulative. If you choose a cumulative FD, you can have monthly or quarterly payouts. You will get the compounded interest upon maturity if you choose a non-cumulative FD.
If you do not have an initial large amount of money to invest in a fixed deposit, you can opt for a recurring deposit. A recurring deposit is ideal for seniors who have a monthly income. They can make monthly deposits to add to their initial deposit. It earns interest like the fixed deposit.
The obvious advantage here is that you are actually saving money from your monthly income but the interest that is applied is that of a fixed deposit and not as a savings account, which is lower than that of FD.
Senior Citizen Savings Scheme
This form of investment has an interest rate higher than fixed deposits. It is a long-term investment scheme offered to seniors aging 60 years old and above. You can avail of this investment from recognized banks and postal offices. Indeed, SCSS is senior-friendly with easy application, enhanced security, and a lot of other benefits. With lower deposits, your investment can go tax-free.
The advantage of treasury security is that they mature in one year. If you are not so sure where to invest your money or you need it soon for other purposes, investing in treasury security is a good option. Although this type of investment does not command a high interest, a senior is assured of heightened security on his investment and a regular cash payout.
If you can find a large and profitable company which issues bond, you can grab the opportunity. If you look for companies with a history of an excellent return on investment, you have less risk of losing your investment. They can give you much more yield than other investment options when all is well in the market.
There are many more ways on how to save and invest your money. As a senior, choosing a straightforward investment scheme can be the best way. You don’t deserve all the paperwork and other requirements. Before investing, you should understand how the system goes. It may be best to work with a reputable financial coach or an investment advisor before investing.
With all the investment options out there, it can be confusing. With sound advice and thorough decision-making, you will surely be able to select the right investment scheme for you.