Financial Planning for Senior Citizens ..Parents..Relatives (Aged)

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Guys, I know lots of people who go through this blog are very young..or Young at heart, But today I’ll

brief you about how could you help your elders with the latest products availble in market so that they
can enjoy their financial life with :

– Maximum Inflow (liquidity)
– Better Health Coverage
– Minimum Tax Out Go
– Regular Income
For a retired person, there are below goals that need to be in focus:

Regular stream of income
Insurance against medical emergencies.
Life insurance is required only if there are dependents
Investments to last for a lifetime

Regular stream of income : To ensure Regular stream of income for your parents, Need to invest in
safest instrument available in market ,preferably Govt Backed.

Senior Citizen Savings Scheme (SCSS) is a post office savings scheme, which is a highly recommended
product by financial planners. It qualifies for a deduction under section 80C but the interest it earns
is taxable. SCSS now is market linked but since it calls for a one-time investment, you lock into the
rate for the entire tenor. Currently SCSS is giving a rate of 9.3% per annum. The interest income is
paid quarterly but is taxable.

But before you exhaust your investment in SCSS, do a quick comparison with tax-saving fixed deposit
(FD) rates of banks. Usually in a high interest rate regime, FDs are capable of offering better returns
and you can withdraw the interest for a regular income stream.

Insurance against medical emergencies:

Well this is must for our parents, If they are not covered by any medical insurance, Don’t wait today
is the day, Please buy a good health policy for your parents immediately.
The way Medical Expenses are increasing, they can eat everything and put your all plans at risks.

Life insurance is required only if there are dependent:

Well this is required only if there are dependent on regular income earned by your parents.
Go for Term Insurance only.

Let me explain here about the Annuty plans, this is very important aspects of our lives, Since lots of
people are retiring or will retire from Private Sector with no government Pension what should they do
with the money they have got as Lump-Sum amount to secure their retired life which is more than working life.

Here are few popular plans and tips.

Life Annuity:

In this type of plan you will receive regular money throughout your life time, Payment will be stopped
on unfortunate event of death.

Return of Purchase Price:

As name suggest, In this case you will continue to receive money till you are alive, after you demise
your nominee will receive lump-sum amount of your purchase price of your annuity amount.

Without Return of Purchase Price:

As name suggest, In this case you will continue to receive money till you are alive, after you demise
your nominee will not receive any amount.

Joint Life, Last Survivor:

This plan will cover spouse (Continue with regular payments) after the death of annuitant. One of  condition is that at the time of death she should be legal spouse.

Lets see indicative returns in various options:

Suppose you have taken annuity of 1 Cr, Below Table will show some regular returns against various plans.

With Return of purchase price Without Return of purchase price Joint Life Joint Life with return of purchase price
Monthly Pension 75288 58856 60448 58482

*Pension amount may vary as per current scenario.

Your comments are Welcome!!

 

Regards

Finance_Doc

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