A Retiree's Guide to Regular Income

Congratulations, you've reached retirement! After years of hard work and disciplined saving, the main financial goal shifts from accumulation to distribution. The key question now becomes: how do you convert your retirement corpus into a steady monthly income that lasts a lifetime? This is a cornerstone of retirement planning in India.

Systematic Withdrawal Plan (SWP)

A Systematic Withdrawal Plan (SWP) is one of the most efficient ways to generate regular income from your mutual fund investments. Instead of keeping your corpus in a low-yield savings account, you can leave it in a relatively conservative fund (like a hybrid or debt fund) and withdraw a fixed amount every month. This allows the remaining capital to continue growing, potentially offsetting the effects of inflation.

Government-Backed Income Schemes

For those seeking maximum safety, government schemes are an excellent choice:

• Post Office Monthly Income Scheme (POMIS): A 5-year scheme that provides a guaranteed monthly interest payout. It's a reliable source of fixed income.
• Senior Citizen Savings Scheme (SCSS): Offers one of the highest interest rates among all small savings schemes, with quarterly payouts. It is specifically designed for retirees over 60.

Don't Forget About Inflation

An income of ₹50,000 per month may seem sufficient today, but its purchasing power will erode over time due to inflation. Your income strategy must include a growth component. A small allocation to equity or hybrid funds can provide the capital appreciation needed to increase your withdrawal amount periodically, ensuring your lifestyle remains protected.

Creating a sustainable income stream is a complex task that requires careful planning. As a leading retirement advisor in Nagpur, I specialize in creating personalized income strategies for retirees.