If you are like most investors, investing for your retirement may not be on your to-do list. However, the retirement life comprises various expenses to tend to but no monthly paycheques. That’s why the sooner you start your financial planning, the quicker your retirement kitty grows.

So, to guarantee regular income in your post-retirement life, read on. Here are some rewarding investment avenues for you to park your hard-earned money.

National Pension Scheme (NPS)

National Pension System is an investment cum pension scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

Here, 50% to 75% of your NPS is invested in equity securities. Since the money you invest in NPS is your retirement corpus, the scheme comes with an in-built risk reduction strategy. Through this, your investment is shielded from market risks as you get older, closer to your retirement.

To put it in perspective, you determine your equity-debt mix initially based on your risk appetite. When you cross the age of 35, your invested funds are periodically transferred from equities to safer instruments like fixed deposits every year.

As your NPS matures, you get the option to make a lump sum withdrawal of up to 60% of the amount, which would be tax free. Or, you could start an annuity on an amount higher than 40% of the corpus. The choice is yours to make as an informed investor.

Additional Read: Common Mistakes to Avoid While Planning Your Retirement

Money market funds

Money market funds are short-term debt mutual funds. These funds invest in low-risk, liquid instruments like commercial papers, short-term bonds, certificates of deposits (CDs), Treasury bills (T-bills), etc., to protect your money’s value by diversifying risk.

Money market funds aim for decent but immediate returns while maintaining liquidity. You can make a lump-sum payment or invest with a Systematic Investment Plan (SIP).

During your retirement, easily use the idle cash lying in your bank account to collect superior returns. If you have a low-risk appetite, this is the scheme for you since it allows you to park your short-term cash surplus for small investment horizons of up to one year.

Balanced advantage funds

Another investment vehicle well suited for retirement planning is balanced advantage funds. These funds stick to the tried-and-tested investment mantra of buying low and selling high. Here, your funds move to debt securities when markets rise. And when stocks decline, debt instruments ensure you a steady income.

Since these funds change their equity-debt allocation as per the market valuations, you don’t experience high volatility. As a risk-averse investor, you can easily invest in debt securities to diversify and earn good returns with a 30% to 80% equity exposure.

Additional Read: 5 Golden Rules of Mutual Fund Investing for First-Timers

Fixed deposits

Fixed deposits are popular investment avenues for retirees as they collect decent, consistent returns. When you invest in FDs, you set aside a specified amount for a fixed time frame. The sum you invest earns interest, and then the interest income and the principal are reinvested for superior returns.

With safety from market risks, periodic interest payouts, and flexible tenures, investing in an FD account can ensure guaranteed returns during retirement.

Over to you

Looking to create a financial cushion for your post-retirement life? Download Tata Capital’s Moneyfy app. Indulge in goal-based investing and plan for your retirement with this easy-to-use, intuitive platform.

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