Maximise Retirement Tax Savings: 5 Smart Strategies for Golden Years

Retirement may mean the end of your job, but it doesn’t mean the end of your tax responsibilities. From pension and FD interest to capital gains on investments, your income sources shift—but the taxman still keeps track.

Effective tax planning after retirement ensures your savings last longer, your returns stay healthy, and you don’t get caught off guard by surprise deductions.

Want high returns on your savings after retirement?
Invest in Bajaj Finance Fixed Deposits with tenures up to 60 months. Senior citizens enjoy interest rates up to 7.30% p.a. and higher exemption limits. Open FD. 

1. Know what’s taxable

Don’t assume everything post-retirement is tax-free. Here’s what typically gets taxed:

• Pension income (except commuted pension)
• Interest from FDs, savings accounts, and bonds
• Capital gains from mutual funds, stocks, and real estate

Get familiar with Sections 10(10A), 10(10D), and 80TTB to understand exemptions that apply to retirees.

Want regular payouts for day-to-day expenses?
Choose a non-cumulative FD from Bajaj Finance—get monthly, quarterly, or annual payouts while managing your tax brackets efficiently. Open an FD account with as low as Rs. 15,000.

2. Optimise your investment mix

Tax-saving doesn’t stop at 60. Diversify your portfolio with these instruments:

• PPF: Tax-free interest and maturity under Section 80C
• SCSS (Senior Citizen Saving Scheme): 5-year government-backed plan with quarterly payouts
• Tax-saving FDs: 5-year lock-in under Section 80C
• ELSS: Equity-linked savings schemes with Rs. 1.5 lakh deduction and growth potential

3. Leverage deferred annuities

A deferred annuity lets you build a retirement corpus now and start receiving income later—usually when you hit your 60s. Taxes are applied only once payouts begin, helping you stay within lower tax slabs.

Combine this with a smart FD ladder strategy to balance liquidity and tax exposure.

Planning liquidity across retirement stages?
Use an FD laddering strategy with Bajaj Finance—split your deposit across different tenures to access funds gradually and reduce tax impact. Check latest FD rates. 

4. Maximise senior citizen benefits

Once you turn 60, the government rewards you with higher tax exemptions:

• Basic exemption limit increases to Rs. 3 lakh
• Deduction up to Rs. 50,000 on FD/savings account interest under Section 80TTB
• Higher deduction limits for medical insurance under Section 80D

Use these smartly to reduce your taxable income each year.

Want fixed returns without market volatility?
Invest in Bajaj Finance FDs with flexible tenures ranging from 12 to 60 months. Avoid equity-linked risk and enjoy predictable returns of up to 7.30% p.a. Open FD. 

5. Plan your withdrawals wisely

Instead of cashing out large chunks, spread your withdrawals over financial years. This helps you:

• Stay in a lower tax bracket
• Reduce TDS deduction on interest or capital gains
• Avoid premature FD withdrawal penalties

Mix income from tax-free instruments (like PPF maturity) with taxable ones to create a balanced, tax-efficient cash flow.

In India, taxes on retirement income are calculated based on total taxable income—which includes pension, annuity payouts, capital gains, and interest. However, these smart exemptions can help:

• Section 10(10A): Commuted pension
• Section 10(10D): Life insurance payouts
• Section 80TTB: Rs. 50,000 interest deduction for senior citizens
• Section 80C: Up to Rs. 1.5 lakh for select investments like PPF, ELSS, FDs

The more you optimise your sources, the less tax you pay.

Also Read: Tips for Successful Retirement Investing

Smart tax planning is not just a pre-retirement activity—it’s a crucial part of your golden years. With the right mix of instruments, withdrawal strategies, and senior citizen benefits, you can protect your savings, beat inflation, and live comfortably without worrying about taxes.

And while you plan your peace of mind, let your money work harder for you. Explore Bajaj Finance Fixed Deposits—designed for guaranteed income, better returns, and easy liquidity during retirement. Book an FD and get up to 7.30% p.a. returns.

Calculate your expected investment returns with the help of our investment calculators