Best pre-retirement and post-retirement investment options
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Best pre-retirement and post-retirement investment options

  • Highlights

  • Greater financial comfort with right investment schemes

  • 2% penalty for premature withdrawal in Post Office Monthly Scheme

  • Safety-oriented investments for post-retirement




When planning your finances for retirement, you need to consider factors such as monthly expenses and inflation. To plan for a well-funded retirement, start investing early. There are some good investment options, which you can invest in even post retirement to bear fruit. To help, we’ve divided your investment options into pre-retirement and post-retirement. Take a look. .

Pre-retirement investment options


1. National Pension Scheme (NPS):

Considered as great retirement product, the NPS is open for all and helps you grow periodic investments during your working life, into large payment at the time of your retirement. Considering the long term view of investment. The exposure to equity and related instruments is a plus. The NPS has been providing good returns over the last couple of years; but, it comes with some risks.

2.Fixed Deposit (FD):

Fixed deposits are considered a secure investment, and offers a higher rate of return compared to a savings account. With the option of a flexible investment term and easy liquidity even during the investment, an FD is easily the most flexible and reliable investment.
You can also use a FD calculator to determine the exact amount you will receive on maturity before you invest. Check out the FD attractive interest rate carefully before investing, and choose a stable company FD for higher returns.

Additional Read: Is an FD the Best Investment Option in India?

3. Mutual Funds:

This is an investment option where funds are pooled in from various investors, and invested into securities, money markets, etc., based on pre-determined risk factors and industry specifications. Mutual funds provide great returns; but, they can be risky as returns are based on the market.

Make sure your pre-retirement investment portfolio is more aggressive since this is the time you can take some calculated risks for good returns. However, include safe options like fixed deposits while you also choose mutual funds and other tax-savings options.

Bajaj Finance Fixed Deposit Features & Benefits

Post-retirement investment options

1. Senior Citizens Savings Scheme (SCSS): The SCSS is a great investment option for senior citizens as it offers a high rate of interest and is very reliable. Apply through your nearest post office or nationalised bank. The scheme comes with a five-year maturity, however, it bears certain restrictions as only senior citizens can apply.

2. Pension plans: These are provided by insurance companies as well as by mutual fund managers. They basically ask for a large sum of money upfront and offer monthly payments at a higher rate of return. Pension funds come with some risk as the returns are market based so plan accordingly.

Additional Read: What Schemes Should You Invest In To Plan Your Post-Retirement Life?

3. Post Office Monthly Income Scheme: Offered at designated post offices, this six-year investment scheme is very safe and assures the investor of a fixed monthly return at a high rate. After a one-year lock in, there is a 2% penalty for premature withdrawal and a 1% penalty for withdrawal from the third year onwards. The scheme offers an added bonus at the end of the six-year term, and you can keep the investment in the Post Office account for another two years on completion of the term and earn interest similar to a savings account. However, there is a cap of Rs.4,50,000 per account. You cannot invest more than that for an individual account and Rs.9,00,000 for a joint account.

Make sure your post-retirement portfolio is more safety-oriented, since your income generation is low and you need to keep the risk to the minimum. Government-led options are sure to get you good yield, and based on your experience, you can invest in other things like real estate and pension plans.

When investing, you must exercise caution and avoid certain investment habits. It is best to stay away from some of the following investment habits that could cost you money.

While there are many investment options that can help you prepare for retirement, most of these come with conditions except for fixed deposit investments. An FD provides flexibility in terms of interest pay-out, tenor and premature withdrawal to suit your needs. An FD also gives you access to money easily and quickly.

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