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Saving your income in the bank is a good way to ensure future security, but investments can help you grow your savings. If you want your money to work for you, investing in the right place can do wonders. Investments can be made regardless of age, but seniors should exercise caution when making any investment decision.
Different people have different needs, one plan does not work for everyone. Additionally, proper research is required to determine which bond, security or plan best suits your needs. Mutual funds are one of the most popular investment schemes out there.
However, the misconceptions associated with mutual funds are dangerous for senior citizens. But that’s not exactly the case. There are some mutual funds designed for senior citizens that suit their needs and risk tolerance. Although traditional financial instruments like recurring deposits and fixed deposits are good options, they cannot beat the current inflation in India.
The purpose of mutual funds is to diversify investors’ money through bonds, stocks, and ETFs, among others. The profit-loss volatility of mutual funds is governed by market rates and managed by a professional fund manager.
A Strategic Investment Plan (SIP) can also be used for mutual funds. For senior citizens, mutual funds can be a good option to overcome the rising inflation in the country. Apart from mutual funds, post office savings, national pension scheme, and bank fixed deposits can also be good options.
But since mutual funds have no withdrawal limits, this allows senior citizens to plan their withdrawals. An applicant can prepare a diversified portfolio tailored to their needs and assets.
It is said that senior citizens should invest in debt mutual funds, equity mutual funds and large equity in the first five years. After retirement, an investor should consult his financial advisor regarding his risk appetite and other goals.
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