Retirement Planning

Best Investment Plans for Senior Citizens in 2019

Senior citizens have unique investment requirements.

This is because of the unique life stage that is called retirement. You are free from work. You have worked hard for your family for decades and now it’s time you relax.

But before you do, there’s one final thing that you must take care of. Finances and investments.

You have to set up your finances and investments probably one last time.

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Here’s what you are supposed to do.

  1. Take stock of any large pending expense

Do you have a child who is going to pursue higher education but won’t be able to support himself financially and needs your helps?

Will you have to bear expenses of your child’s marriage?

Is there a major health issue which is going to have an expensive remedial?

Try to think of any large expense that is financially draining. If there is one, how well prepared are you to tackle it?

  1. Figure out a way to generate a constant monthly income

In the absence of a primary income, you must place highest focus on generating a monthly income. This should be sufficient to help you and your get through a month.

Now there are multiple ways to do this. You have a number of government schemes, dividends of stocks and mutual funds, rental income, Finpeg monthly income plan etc. that help generate a monthly income.

You can read about these options in more details in this blog

We are going to have a look at multiple investment options for senior citizens in this blog.

Let’s go!

7. Real Estate

investment plan senior citizens

Real estate has consistently been among the top 2-3 investment options of Indians.

There is a different pride associated with buying a house and even a second house. However, if you are looking to boost your portfolio returns and not thump your chest on the completion of a house purchase, then you should probably rethink investing in real estate.

According to National Housing Bank data, property prices in Mumbai and Bengaluru increased annually by just about 7.50% and 5.75% respectively between June 2013 and September 2017. In Delhi, prices actually fell by -0.70% annually during the same period. Beyond the data, we hear numerous stories of investors in distress with their money stuck in delayed projects.

Source: Livemint

Additionally, real estate may be purchased not only for appreciation but also to rent out.

It’s not a bad idea to rent out a real estate to enjoy a regular monthly cashflow. However, there are a few problems associated with this –

  1. The rent as a percentage of the real estate cost is meager. 4% tops. Meaning Rs. 1 crore house will not fetch you more than Rs. 4 lakhs in yearly rent. That translates to about Rs. 30,000 a month. And this will taxable.
  2. Landlord is not an easy job. You may very well end up renting your house to a rogue tenant. Not only will he default on the rent but also the general struggle you will have to undergo to make him pay on time is something no one will willingly sign up for.

Because of these likely issues, real estate ranks at number 7 in this list of best investment plans for senior citizens in 2019.

6. Gold

investment plan senior citizens

Do you know what was one of the best assets of 2018?


Shunned by investors for more than half a decade, gold made a comeback in 2018.

Gold’s price rose by about 7.7% over 2018.

Liquid funds return (represented by the CRISIL Liquid Index) clocked around 7.4% in 2018.

Equity market return (represented by NIFTY 50 Index) stood at around 3% in 2018.

However, there is a sound reasoning behind this.

Gold is valued over the world in dollars (USD). And anyone who keeps in touch with news knows that Rupee got hammered over 2018 against the Dollar which also led to rise in the price of fuel.

For this very reason, gold prices rallied.

Let’s have a look at this with an example.

For simplicity’s sake. Let’s say that 10 rupees (INR) = 1 dollar (USD)

Let’s say the price of 1 ounce gold is 100 dollars which translates to about 1000 rupees.

Next, let’s say the rupee has weakened against the dollar. This means that a rupee can now buy less dollars than it used to.

Now, 20 rupees = 1 dollar.

How will this affect the price of gold in India?

Assuming that an ounce of gold is still worth 100 dollars, it’s value in rupees has now become 2000 rupees.

Gold acts as a very good hedge against currency risk. If you believe that the rupee will slide against dollar even in 2019, gold should be at around the top of your investment options.

5. Stocks

investment plan senior citizens

Stocks, especially those of mid and small cap companies, witnessed a bloodbath in 2018. The large cap companies stood their ground, but that’s it. The return of the NIFTY 50 index as we saw was a mere 3% – less than the interest of your savings bank account.

But this doesn’t change a lot of things. Everyone who invests in equity via stocks or mutual funds knows about the volatility of equity.

We’ve had years as bad as 2018 – in some cases, worse – before as well. Think of 2000, 2008, the 2010-2012 period. But despite these bad times equity leaves every other asset far and behind in the long term.

But equity is one thing and investing in stocks is another. Setting foot in the stock market might not be the best idea for someone in his 60’s.

There’s no one to stop you but you need to understand the risks. Or take very less exposure to the stock markets if you are going to be taking buy and sell calls yourself.

What would be highly recommended is participating in the equity market via equity mutual funds. These are managed by professionals with incredible amounts of experience and resources. Their calls are less likely to lose you money.

We discuss a few mutual fund investment products in a while.

4. Fixed Deposits

The good old fixed deposits. Most senior citizens of today have had their cash all stashed in fixed deposits.

Many graduated to real estate. And a few graduated to equity – stocks or mutual funds. The ones who graduated, however, didn’t desert fixed deposits. A portion of their fortune continued to be parked in fixed deposits.

There is a great comfort of investing in fixed deposits. But, to a great extent, that comfort is unfounded.

Did you know that your money in fixed deposits is not 100% safe?

If the bank closes down, you are insured by the government only up to Rs. 1 Lakh. And this includes the principal and interest of savings bank account, RD’s and FD’s cumulatively.

And if you are senior citizen you know how many banks have failed in the last few decades.

The point is not to scare you by any means. Just to make you cognizant of the risks of FD’ing your money with a non-standard bank. These could be co-operative banks, small finance banks etc that are not widely known.

These banks have the highest chance of failing because of various issues. And because there is risk in investing in fixed deposits of these banks, they tend to offer higher interest rates than the standard banks like SBI, HDFC, ICICI and the likes.

Do not fall prey to the slightly higher interest rates of unknown banks. Your money is the least safe in these banks.

Moreover, you can completely give up fixed deposits in the favour of liquid mutual funds or FMP’s – fixed maturity plans.

Liquid funds and fixed maturity plans offer great taxation benefits if held for more than 3 years. You earn a very similar return on these instruments and the taxation is only a fraction. Add to that the safety of these instruments and the opportunity to withdraw without implications – for liquid funds.

3. Finpeg Alpha SIP

investment plan senior citizens

Alpha SIP is an improved version of SIP – systematic investment plan.

SIP assumes that equity mutual funds can be invested in all times. Some times the prices might be slightly high, some times slightly low. But if you average your prices in the long term, you should be earning an inflation beating return always.

But our simulations of 5-year SIP’s on top rated mutual funds and indices like NIFTY 50 have told us this is not always the case.

Not only are you not assured of inflation beating return, but also there exists a small chance that you will actually clock sub-FD or sub-savings bank interest rate returns.

We have a different take. We believe that equity mutual funds are not going to earn you equity level returns always. And 2018 is a glaring example of this.

So, what do you do? Well, you continue investing but in debt instruments. Debt mutual funds are way safer than equity mutual funds and can shield you from losses which typically take place at higher market valuations.

Next, you wait out the cheerful market phase and start shifting from debt mutual funds to equity mutual funds as market valuations start falling. It has been seen that equity markets rally after they reach low market valuations.

You do this continuously – move to equity mutual funds when the time is right and shield behind debt mutual funds when you sense fall in the equity markets. This is known as tactical asset allocation.

Tactical asset allocation is a highlight of all the mutual fund offerings at Finpeg.

2. Finpeg Lumpsum Strategy

Finpeg Lumpsum Strategy is very similar to Alpha SIP.

It helps you tactically asset allocate between debt and equity.

While Alpha SIP requires you to invest every month, Finpeg Lumpsum Strategy requires you invest an amount at one go. Given how most senior citizens don’t have a source of primary income, the lumpsum strategy would work out better and more convenient.

This is because you retire with many of your investments maturing. These need to be invested for to generate a constant monthly cashflow and the other needs to appreciate at least at the inflation rate.

1. Finpeg Monthly Income Plan

monthly income plans for senior citizenThe perfect monthly income solution for retirees and senior citizens.

Monthly Income Plan is based on tactical asset allocation algorithm developed at Finpeg. Further, by opting for the monthly income plan…

  1. You receive a regular monthly income or cashflow of up to 1% of the invested amount (Rs. 10,000 per month if Rs. 10 Lakhs is invested)
  2. If you let the algorithms execute for the recommended investment tenure, you stand a great chance of capital protection (initially invested – Rs. 10 Lakhs, you walk away with Rs. 10 Lakhs – this is excluding the monthly incomes)

Well, we don’t call it as the ‘perfect monthly income solution’ for nothing.

To know more about the Finpeg Monthly Income Plan, give us a shout here

Also published on Medium.

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Anurag Bhalerao

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