Financial planning: 5 best retirement plans to gift your dad this Father’s Day

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Updated: June 19, 2016 9:00:40 AM

Fathers are special and this Father’s Day while you are doing your best to make it memorable for him, how about doing something which reflects your love and concern.

dad-reu-LEvery father earns, saves, and invests for the education, wedding, and other needs of children. If you are keen to ensure his post-retirement years are hassle free, then these five options could be of help to your father. (Reuters)

Fathers are special and this Father’s Day while you are doing your best to make it memorable for him, how about doing something which reflects your love and concern. Every father earns, saves, and invests for the education, wedding, and other needs of children. If you are keen to ensure his post-retirement years are hassle free, then these five options could be of help to your father.

1. Pension Plans (Insurance): Pension plans offered by insurance companies are one of the best retirement options. Immaterial of the years left for your father’s retirement, a pension plan can be bought. In fact even if your father has just retired, some plans allow entry till the age of 65. Once the policy period is over, a monthly income is provided. Additionally, the policy holder can choose to withdraw one third of the lump sum and invest it elsewhere. Pension plans are available as both traditional pension plans and ULIPs. Most pension plans provide tax benefits as well.

2. Senior Citizen Savings Scheme (SCSS) by the Indian Post Office: The SCSS provided by the Indian Post Office is one of the best available investment options for senior citizens. Any amount ranging from a minimum of Rs 1000 to a maximum of Rs 15 lakhs can be invested under this scheme. Quarterly interest is provided and it has the facility of holding a joint account (could be you or your mum). The age of entry is fixed at 60 years or in case of super annuation, entry is allowed by the age of 55. This scheme provides the dual benefit of being designed exclusively for senior citizens and also provides tax benefits.

3. Monthly Income Scheme (MIS) by the Indian Post Office: Getting a minimum fixed monthly income is the main aim of retirement planning. The MIS scheme of the Indian Post Office is designed to do that. Joint accounts up to a limit of 9 lakhs can be opened and a monthly interest will be credited into the account. It can be easily transferred to any post office in India. A definite win-win because post offices are located almost everywhere in the country and a lot of senior citizens make use of this scheme to have a monthly income.

4. Monthly Income Plans (MIPs) of Mutual Funds: MIPs of mutual funds are designed to provide a monthly income, though it is not guaranteed. They invest in debt instruments predominantly, while a very small portion is invested in equity as well. MIPs are good to have as one of the retirement investment instruments as they can fetch higher rate of interests than bank deposits.

5. Systematic Investment Plans (SIPs) in equity oriented mutual funds: Now SIPs can be done over a period of a few years, till the age of retirement. They give decent returns and also protect the investor from any loss occurring due to the flux in the markets. Depending on when your father is retiring, you can invest in a few good equity plans with a solid track record. Around the time of retirement, pull out the corpus and convert it into an FD. A win- win!

The options listed are not the only options available, but they are surely amongst the best and safest to invest in. Financial planning and retirement planning are extremely important in life, and such an investment is definitely one of the best gifts that you can give your father on Father’s Day!

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The author is CEO & Founder, Right Horizons

 

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