How to Maximize Monthly Income After Retirement with Provident Fund & Gratuity Money?

POSTED BY Rahul ON June 18, 2013 12:10 am COMMENTS (8)

My Father is a retired Govt. Employee and expecting to get Rs. 12-15 Lacs as Provident Fund & Gratuity.

He is entitled for Rs. 18500/- per month pension.

He has no liabilities, no loans. He is also covered under pensioners’ medical benefits provided by BSNL. He has planned to invest in following instruments to generate additional income per month.

 

  1. Post Office Monthly Income Scheme – Rs. 450000/- as interest is tax exempted.
  2. Post Office-Senior Citizen Savings Scheme – Rs. 500000/- As Interest is higher.
  3. Bank FDs – With monthly interest payout option.
My queries are:
  1. Are there any other better investment options than above schemes to maximize monthly income without high risks?
  2. What shall be the tenures of above instruments?
I will be grateful if someone could guide me..

 

8 replies on this article “How to Maximize Monthly Income After Retirement with Provident Fund & Gratuity Money?”

  1. Dear Rahul, if your father can manage with 5K Rs. mly, it means his yly need ‘ll be around 60K Rs. only. this translates into an investment of around 7L Rs. in bank FDs 2 Sr Citizen reates. Remaining amount should be invested in Eq. Mfs to get the kick in return & to combat inflation over the long period of time.

    Thanks

    Ashal

    1. Rahul says:

      Thank you Ashal..

  2. Rahul says:

    Dear Ashal,

    Thanks for the guidance.
    If my father manages to generate Rs. 5000/- per month and is still left with some part of the corpus, should he invest it in FDs/SCSS too? Are there any other options?

    Rahul

  3. Dear Rahul, 7K mly surplus requirement, translates into an yly requirement of 84K Rs. or at best 1L Rs. to get such amount from a corpus of 15L Rs. is not that much tough. Please ask your father to use Sr. Citizen FDs of banks for maximum benefit in terms of interest income on mly basis.

    Thanks

    Ashal

  4. Dear Rahul, next question from me, does your father really need mly income from the available corpus?

    Thanks

    Ashal

    1. Rahul says:

      Dear Ashal

      Yes. My father’s monthly expenses are in between Rs. 20000 to 25000 at most which include medicines, daily needs, pertrol expenses, bills etc.

      Rahul..

  5. Dear Rahul, before commenting any thing on the investment part, who tell you that PO MIS interest is tax free?

    I want to know.

    thanks

    Ashal

    1. Rahul says:

      Dear Ashal,

      I searched & found out that its just wrong interpretation by my dad. Actually, there is no TDS in POMIS. Interest is fully taxable. Thank you for clearing the doubt.

      Rahul

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