Retirement Investment Options

Who doesn’t want to spend their golden years of life i.e. post retirement without any tension? After all the years of hard work, each one of us wants to live life happily with less dependence on others. In order to make this happen, you need to start preparing for the same early in your life. Selecting best products for investments is a key for your future. While planning for your retirement three important things should always be kept in mind:

1. Years left for retirement
2. Risk profile
3. Financial objective

So here the 6 best retirement investment options which can gives you decent money in your later life. You have to accumulate money in initial stage of your life and get good returns in the later part.

Public Provident Fund (PPF): PPF is considered to be the most effective option to save money for retirement. It requires an individual to deposit money and earn interest. Most important benefit is that the interest is totally tax free. You can open PPF account in post office and banks.

Employee Provident Fund (EPF): This is a retirement saving scheme in which 12% of salary goes into EPF and equal amount is contributed by the employer. Interest rate offered is 8.75% for the year 2013-2014. However EPF is only for salaried individuals and there is no lock-in period. Read more on benefits of EPF.

Bank FD: Fixed deposit is one of the safest investment for retirement. Although the returns cannot beat inflation but still it gives regular income.

New Pension Scheme (NPS): This is also considered one of the best retirement savings option. And any individual with age between 18-55 years can invest in this. Minimum yearly contribution is Rs. 6000 and there is no cap on maximum contribution. Tax benefit is 10%. Also see difference between NPS and EPF.

Mutual Fund: If you want to invest for long term perspective then investing in mutual fund through systematic investment plan. Investing in mutual funds is tax effective and have provides good returns when invested through top mutual fund companies. You need to invest money considering your risk profile and time horizon. While investing always look for diversifying your funds. Most importantly there is no compulsion on paying the premium regularly and withdrawing the money prematurely.

Equity: There is no minimum age limit to start investing in equities. Sooner the better. However investing in equities carries risks as it depends on various factors such as inflation, economy etc. So be careful while investing in equities. After retirement you can even spend your time in researching on company’s stocks and then invest. With careful planning, you can earn good money from equities. Investing in equities through systematic investment plans is highly recommended as volatility does not affect in long term.