I am retiring now, where should I invest 1 Crore and what investment options available for Sr Citizens

Introduction to Various Investment Options for Senior Citizens
Senior citizens have several investment options. However, the key is to select the schemes that offer minimal risk while promising higher returns. Protecting the retirement corpus against the inflation remains a top priority for senior citizens. However, are there any truly risk-free investment options available for them? Which options minimize risk while maximizing returns? Are there any attractive investment options for senior citizens willing to take moderate risks? In this article we would talk about 5 Investment Options for Senior Citizens which are risk free to moderate risk.

What is the question from our reader?
One of the reader Mr. Ashish Kumar Baneerjee writes on one of the article:

Sir I would retire from service on 30/06/2024.and approx 1 cr I receive after retirement.can you suggest me where I can invest my hard earned money for peaceful living of rest in my life.i have no liability,and also I have own house and 800000 mediclaim.

How to Select the Right Investment Option for Senior Citizens?
Here are several ways for senior citizens to select the best investment plan based on their needs:

Opt for investment options with minimal or zero risk.
Go for investment options that offer regular income streams.
Look for investment plans that beat inflation.
Consider investment options that provide both regular income and potential principal growth, if feasible. Instead of relying on a single investment avenue, senior citizens can diversify their portfolio across multiple options to average out returns and effectively manage inflation (typically estimated between 5.5% to 6%).

5 Investment Opportunities for Senior Citizens – Features and Benefits
Let’s categorize these options into different buckets which can help Senior Citizens to opt based on the requirement.
A) Risk-Free Investment Plans for Senior Citizens
This category includes the Senior Citizen Savings Scheme (SCSS) and Annuity Pension Schemes.
B) Low-Risk Investment Options for Senior Citizens
This comes with a list of investment options that come with minimal risk, though not entirely risk-free, such as Bank Fixed Deposits and Ultra Short Term Debt Mutual Funds.
C) Moderate Risk Investment Options for Senior Citizens
This category provides a list of plans with moderate risk, like the Two Bucket Strategy for regular income and Floating Rate Savings Bonds.
5 Investment Options for Senior Citizens (Risk-Free to Moderate Risk)
Let’s get into the features, benefits, interest rates, returns, and taxation of these schemes.
A) Risk-Free Investment Plans for Senior Citizens
1) Senior Citizen Savings Scheme (SCSS)
Key Features:

Eligibility: Individuals aged 60 and above (55-60 years for VRS or Superannuation, 50 years for retired defense personnel) are eligible to consider this scheme
This is a government scheme with sovereign guarantee which is 100% risk-free.
Tenure: 5 years, extendable to 3 years within 1 year post-maturity.
Current Interest Rate: 8.2%, subject to quarterly review.
Quarterly interest payouts.
NRIs are not eligible.
Minimum Investment: Rs 1,000; Maximum Investment: Rs 30 Lakhs.
Tax Benefits under Section 80C.
Premature withdrawal possible with penalties.
Taxable interest income, with TDS beyond Rs 50,000 annually.
Best choice for risk-free investment option for senior citizens.

Approximate Returns Ashish Banerjee can expect: Quarterly interest payouts can provide an estimated yearly income of around 2.46 lakhs on Rs 30 lakhs investment.
2) Annuity Pension Plans
Key Features:

Offered by LIC and other private insurance companies.
Returns typically range from 5% to 6%, guaranteed until tenure completion.
Taxable pension income.

Approximate Returns Ashish Banerjee can expect: With Rs 1 Crore investment, the reader can expect Rs 6.5 to 8 lakhs per annum depending on the annuity option chosen the investor.
 B) Low-Risk Investment Options for Senior Citizens
3) Bank Fixed Deposits
Key Features:

Simple to open and close.
Interest rates range from 7% to 8.25% of senior citizens.
Various payout frequencies available.
Tenure ranges from 7 days to 10 years.
NRE account accessibility for NRIs.
Tax benefits under Section 80C for 5+ year deposits.
Risk managed by diversification across banks. FD’s upto Rs 5 Lakhs in a bank have deposit insurance. One can diversify and invest across various banks.
This is one of the best preferred low-risk option for regular income for Senior Citizens.

Approximate Returns Ashish Banerjee can expect: With Rs 1 Crore investment, the reader can expect Rs 7 lakhs to Rs 8.25 lakhs per annum depending on the bank and tenure.
4) Ultra Short Term Debt Mutual Funds
Key Features:

Alternative to bank FDs.
Offers 6% to 8% annualized returns, though not guaranteed.
Need to pay STCG/LTCG on capital gains.
Minimal risk of capital loss.
Ideal for emergency funds or short-term investments.

Approximate Returns Ashish Banerjee can expect: With Rs 1 Crore investment, the reader can expect Rs 6 lakhs to Rs 8 lakhs per annum depending on the scheme and tenure.
C) Moderate Risk Investment Options for Senior Citizens
5) Mutual Funds – Two Bucket Strategy
Key Features:

Two bucket strategy helps to reduce the risk
Allocate 1/3rd to short-medium term options and 2/3rd to a mix of debt and equity.
Invest 1/3rd of corpus in short term options like short term debt mutual funds or bank FDs.
Under medium to long term options, for 2/3rd of corpus, one can consider in debt funds or equity funds that would double the money in 6-7 years.
Regular income through interest or Systematic Withdrawal Plan (SWP).
Potential for corpus growth.
Tax implications based on capital gains.
One can review our earlier  article How Two Bucket Strategy of Investment can help to get regular fixed income?

 Approximate Returns Ashish Banerjee can expect: With Rs 33 Lakh (1/3 of 1 Crore) investment in FD / short term funds, he can withdraw Rs 66,000 per month for 6  years and residual value would be almost zero. Balance of Rs 67 Lakhs investment in debt / equity would double the money in 6-7 years. After 6 years, the above step can be repeated.
Selecting the Best Investment Option for Senior Citizens
There’s no one-size-fits-all solution. Senior citizens should assess features and benefits to select the most suitable investment options. Starting with risk-free option and gradually transitioning to low-risk and moderate-risk options ensures a balanced investment strategy.

Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified – Investment Adviser and NISM Certified – Research Analyst. He has been analyzing financial markets in the last 20 years.He can be reached at suresh@myinvestmentideas.com Latest posts by Suresh KP (see all)