Skip to main content

Some investment tips for the 80 plus investor


   In the last few years, India's growth story has centered around the youth which has been on a spending spree. Hence, most of the economic activity has focused on wooing this segment. This is reflected in the number of malls that are coming up or the scorching pace at which mobile phones are hitting the market. Amid this environment, it was a pleasant surprise when the Finance Minister came up with tax sops for those aged above 80. He even referred to them as super senior citizens.

   With life expectancy improving, many families have at least one individual who has celebrated his 80th birthday. With many of them having a good lifestyle and ability to manage their life independently, wealth management is also a necessity. The Finance Minister seems to have recognised this.


   Investors in this category can manage money slightly differently. One is to manage their funds themselves and the other is to lend their name to their family members. With the income tax limit being raised to Rs 5 lakhs for these investors, you are bound to see a number of joint investors in the coming days. For instance, a family member can have a fixed deposit along with a super senior and enjoy a higher tax-free income.
   

Here are some tips for these investors:

Be wary of wrong advice   
Many senior citizens are easy targets as they are not aware of many cotemporary investment options. It is important for an investor to feel comfortable with a product rather than invest in it just for the sake of keeping pace with the times. Hence, stick to products that are easy to understand and do not require constant monitoring.

Maintain liquidity   
Retired investor do not have the luxury of investing in long-term and illiquid investment products and in the case of super senior citizens, the word lock-in should not be part of the investment planning. Avoid products that don't allow access.

   After factoring in these crucial factors, invest in products which generate cash flows and don't pose any threat to the capital. Only after taking into account the liquidity needs, mildly riskier options like monthly income plans can be considered. As pointed out earlier, stick to vanilla options like fixed deposits, debentures or company deposits with good credit rating. Avoid loans even if a banker is willing to give you one based on your pension income.

   Those who have the luxury of surplus income can consider setting aside money in balanced funds of mutual funds. Thanks to wage revisions, a number of senior citizens have the luxury of earning a pension income of Rs 4-5 lakhs and may be left with a small surplus.

If healthcare costs are taken care of, such individuals can look at monthly income plans of mutual funds with the dividend option or even balanced funds.

Popular posts from this blog

Birla SunLife Manufacturing Equity Fund

The Make in India program was launched by Prime Minister Naredra Modi in September 2014 as part of a wider set of nation-building initiatives. It was devised to transform India into a global design and manufacturing hub. The primary motive of the campaign is to encourage multinational as well domestic companies to manufacture their products in India. This would create more job opportunities, bring high-quality standards and attract capital along with technological investment to bring more foreign direct investment (FDI) in the country.   Why India as the next manufacturing destination?   The rising demand in India along with the multinational's desire to diversify their production to include low-cost plants in countries other than China, can help India's manufacturing sector to grow and create millions of jobs. In the words of our Honourable Prime Minister- Mr. Narendra Modi, India offers the 3 'Ds' for business to thrive— democracy,...

Kisan Vikas Patra - KVP

  Kisan Vikas Patra (KVP) First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014. The salient features of KVP are as follows- The grand USP- Money invested by the applicant doubles in 100 months (8 years, 4 months). KVPs are available in the following denominations- Rs.1000, Rs.5000, Rs.10,000 and Rs.50,000. The minimum purchase value for the KVP is Rs.1000. There is no maximum limit. KVPs are available at all departmental post offices across India. These certificates can be prematurely encashed after 2 ½ years from the point of issue. KVPs can be transferred from one individual to another and from one post office to another. ----------------------------------------------------- Inve...

Mutual Fund Review: Reliance Regular Savings Equity

    Despite high churn, Reliance Regular Savings Equity has managed to fetch good returns   In its short history, this one has made its mark. Though its annual and trailing returns are amazing, the fund started off on a lousy note (last two quarters of 2005). It managed to impress in 2006 and was turning out to be pretty average in 2007, till Omprakash Kuckian took over in November 2007 and wasted no time in changing the complexion of the portfolio. Exposure to Construction shot up to 28 per cent with almost 21 per cent cornered by Pratibha Industries and Madhucon Projects . Exposure to Engineering was yanked up (18.50%) while Financial Services lost its prime slot (dropped to 6.69%) and Auto was dumped. That quarter (December 2007), he delivered 54.66 per cent (category average: 25.70%).   When the market collapsed in 2008, thankfully the fund did not plummet abysmally. But even its high cash allocations could not cushion the fall which hovered around the category average. ...

Total Returns Index brings out real Equity Funds Performers

From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index. What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents. Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark. Shrinking outperformance With a stiffer benchmark, it is obvious that the margin by which an equity fund outperforms the benchmark would shrink. Rolling one-year returns from 2013 onwards, the average margin by which largecap funds out...

Health for Wealth - How to buy Health Insurance ?

Tax Saving Mutual Funds Online Current open Infra Bond Application form   HEALTH insurance is a relatively new phenomenon in India. Hence, it is not on the top of the mind for most people to make a conscious commitment towards health insurance. However, it is imperative for each one of us to plan for better health for our families and ourselves. There's no better way than to start with making health your top priority this year. So, your health insurance resolution charter would look something like: ■ Invest in health for wealth: Timely investment in health insurance can help build a security net and hedge sudden dilution of another financial asset class in the event of a health emergency, making it imperative to opt for a comprehensive health insurance plan. ■ Buy a comprehensive health cover that fu lfills your health needs for life: Buy a personal health insurance cover even if you have an employee cover because 'employer provided' health insuranc...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now