The best thing you can do to make your life post-retirement stress-free is to save enough money so that you feel secure financially. However, that requires a lot of effort as you will come across many unexpected expenses and tricky situations in life that may force you to think twice about your financial plans.
Here are a few things that can be used as an investment guide to collect a huge corpus till retirement:
If you start investing in the early days of your career, you will naturally be able to save more. You don’t need to worry if you don’t have a huge corpus as many financial instruments allow you to earn well with a small investment as well.
For example, you can invest in an SDP (Systematic Deposit Plan) from Bajaj Finance by just depositing a small sum of Rs. 5000 each month. The number of deposits can vary from 6 to 48 as per your financial needs and obligations. Moreover, you can lock-in each deposit for a tenor of up to 60 months, or a single maturity date can be selected for all your deposits.
Each deposit is considered to be a separate FD and it will earn at an interest rate that is applicable on the date of deposit.
Diversify your investment portfolio
Investing in multiple instruments will enable you to maintain a steady flow of returns while ensuring the stability of your invested capital. For that, you will have to invest a part of your income in instruments that offer high returns like mutual funds, stocks, etc. and the remaining part should be invested in risk-free instruments like FDs.
This will balance the risk-return ratio and you will able to align your future investments based on your experience.
Don’t take too many risks
Though you would want to earn substantial returns by investing in market-linked instruments in your 30’s and 40’s, you must avoid investing in them as you reach closer towards retirement. This is because at this point in life you need to secure your invested capital to safeguard your future.
Fixed income instruments are not only safe but they also provide good returns. One such example is Bajaj Finance FD that not only offers a higher interest rate but is also rated highly for securing the investment of depositors.
Invest in a contingency fund
As you start investing in your life after retirement, you must see to it that you are prepared for a sudden requirement of funds and other emergencies. For that, you must invest in an instrument that can also be used as a contingency fund upon requirement.
Bajaj Finance offers collateral-free loans on its FD plans. It means that if you have invested in its FD plan then you can get up to 75% of the FD value as a loan without submitting any other collateral. The loan amount can be used for covering your unexpected expenses or fund requirement for marriage, education of the child, foreign trip, etc.
Repay your loans before retiring
Though not ideal for your future savings, loans are an integral part of everyone’s lives. However, you can chalk-out smart investment strategies to take care of the loans you have taken.
It is better to repay all your loans before retirement as you would not want to bear the burden of EMIs after that. Investing a bulk amount in cumulative FDs might help you to repay your loans quickly even before the completion of the loan tenor.
This is because the cumulative FDs do not pay interest at regular intervals and therefore, the interest that is calculated in one cycle gets added to the principal during the next and this creates a compounding effect on your returns.
Bajaj Finance offers an FD interest rate of up to 6.85% that is one of the highest fixed deposit rates in India. A 0.25% additional FD rate is offered to senior citizens and non-seniors can benefit from the extra 0.10% FD rate by using the online FD form for investing. This means that you can earn substantial returns by investing in its cumulative FD plans.
FDs as a regular income source
Despite saving enough money till retirement, you will still need a regular income source that can take care of your utility bills, medical supplies, groceries, etc. The monthly interest payouts offered by non-cumulative FDs will help you to mitigate these expenses with ease.
To enjoy stress-free life after retirement, you must invest smartly. A good option would be to start investing at an early stage of life and invest in multiple instruments to maintain a diverse portfolio. On top of that, investing in a high paying cumulative fixed deposit like Bajaj Finance will help you to compound your returns. The accumulated returns can be used to repay loans quickly.
A part of your savings can be invested in non-cumulative FD to fulfill regular fund requirements after retirement. Also, it is better to invest in safe instruments as you close towards retirement to secure your investments. Bajaj Finance FD not only ensures better returns but is also safe as ICRA and CRISIL have rated it highly for being stable and safe.