Ways to make safe investments in your retired life
Posted on: 21/Jan/2016 6:40:21 PM - No. of views : (1778)
Those who retire are likely to receive retirement money in lump sum amount. Such people need to be conscious of making the right choice of investment so that they can avoid paying large amount towards tax. They in fact need to be so tactful in handling this. Here is a quick rundown on the tax-free investment plans for those who retire
Tax-free bonds - similar to schemes for senior citizens, most tax-free bonds also do not benefit you with large amounts towards interest. However, this can be enjoyed as a tax-free mode of income. Income obtained through this will not be taxable. Here, annual interest is paid just like corporate deposits rather than receiving interest amounts at regular time intervals. This is seen as a drawback of the system. Such tax-free bonds will receive 7.5 percent interest which doesn`t provide significant profit to you. This can be chosen as your investment mode if you prefer to cut down on your tax. If you do not fall under taxable category, you may skip this scheme. There are other senior citizens schemes that can pay you with 9.3 percent interest
NMDC shares - it is also a smart way to choose NMDC shares the reason being the Rs 8 dividend for each and every share. This is more or less equal to 10 percent interest rate. One can receive the dividend twice a year which is non-taxable. The only drawback here is the risk involved in buying the share. However, NMDC is a well-doing company with fewer competitors in its sector
Dividend from mutual fund investments - dividend from mutual fund investments is non-taxable. You are free to choose shares or bonds. However, it is also important for the retired individuals to be conscious and aware the reason being the high level of risk involved in equity and mutual funds. Moreover, this is not an ideal choice for retired persons
One needs to analyze all aspects of income tax. If you fall under the taxable income category, you may choose to buy bonds, whereas if your income is non-taxable, you may opt for senior citizen or corporate deposit schemes. You may also choose monthly income scheme with the post office. If you are ready to risk, you may prefer equity or mutual funds. However, you need to be picky in choosing the company, and go for companies that provide prompt dividends.
