How to choose the best retirement investment for your portfolio?

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Retirement may be freedom from your regular office jobs, but it becomes worrisome when you do not get a regular salary which isn’t the case when you are salaried.

After retirement, there needs to be a regular source of income which is possible only when you invest in the right plans. Investing in the right plans help you get a regular income and also help you deal with the rising inflation.

Many senior citizens who had properly planned their retirement portfolio is living the same life that they used to live during their regular income days. Still, few have to compromise their standard of living due to poor planning. So, to live the same standard as your salaried days, it is paramount to have a proper retirement planning.

There are a lot of investment plans available, but proper planning means investing in plans that would give high returns as well as long term stability.

Below are a few investment plans that would help you make an informed choice for retirement.

National pension scheme (NPS)– This government-sponsored scheme was exclusively launched for the government employees but later was opened to all professionals. NPS is an extremely low-cost pension scheme that helps in tax deduction to a maximum of 1.5 lakh.

On retirement, one can withdraw a part of the maturity amount and allow the other part to generate regular income by purchasing annuities.

Atal Pension Yojana – This scheme was launched under the social security system and can be acquired by citizens of age group 18 to 40 years. With a reasonable contribution, one can get a guaranteed income of Rs. 1000 – Rs. 5000 after the age of 60.

This scheme has an additional tax benefit and also comes with triple pension benefit. After the subscriber, the spouse gets the pension while after the subscriber and the spouse, the nominee gets the corpus.

Public Provident Fund– This is a government-sponsored scheme with a lock-in period of 15 years. The returns on PPF are fixed, and the government reviews the interest rates every quarter. PPF can be extended after completion of 15 years for 5 years. One can start a PPF account with a minimum of 500 rupees and a maximum of 1,50,000 rupees.

Pradhan Mantri Vaya Vandana Yojana. This scheme is meant to safeguard the senior citizens from the falling interest rates of fixed deposit by fixing the interest rate at 8% for 10 years. The maximum limit for investing under this scheme is Rs. 7.5 lakhs.

Investing in Mutual Funds – Investing in mutual funds has an added advantage as it is more flexible than any pension funds. One can withdraw any amount at any point of time and is also more tax-efficient than any pension plan. In case of ELSS funds, the long term equity funds are tax-free up to 1 Lakh. In the case of debt funds, the taxes are levied after indexation, which mostly reduces to Nil.

To experience the same standard of living as in salaried days, it is crucial to plan for retirement a few years ahead.