How can senior citizens make the most out of the portfolio of SCSS and PMVVY schemes?

On the other hand, the PMVVY scheme will offer a guaranteed pension of 7.40% payable monthly for the financial year 2022-23. This assured rate of pension will be payable for the complete policy term of 10 years for all policies purchased up to March 31, 2023. This program is set to end on March 31, 2023, and will not be available starting April 1 or FY24. Unless the government announces an extension. Come learn from experts how senior citizens above 60 years of age looking for government backed regular income with inflation-beating and risk-free returns like PMVVY and SCSS can make the most out of these two schemes invested through a single portfolio Can be

Harsh Gahlaut, CEO of Finage

In the recent Union Budget, we saw that the SCSS limit has been doubled from 15 lakhs to 30 lakhs. However, senior citizens should not rush into government-backed schemes with their post-retirement savings as they represent a sub-optimal solution. Firstly, though both PMVVY and SCSS now offer FD-plus returns of 8%, the returns are fully taxable on the margin. Second, there is a hard lock-in of 5 years (10 years for PMVVY) on the amount invested. As a senior citizen, three things matter – access to capital during events like medical emergencies, tax efficient income, and inflation that beats capital growth. Unfortunately, government schemes like SCSS and PMVVY do not check any of the three boxes.

We believe that a well designed portfolio consisting of debt and equity mutual funds along with a smart SWP (Systematic Withdrawal Plan) strategy represents a better solution to all the three problems mentioned above. With lifespan increasing and the risk of one’s capital becoming real, senior citizens can no longer take a completely risk-averse approach and ignore the wealth creation potential of equities. Depending on their unique situation, we now truly recommend retirees to invest 15% to 40% of their retirement funds in equities, while the rest in TMFs, liquid funds, medium term debt funds and even Deploy that through a judicious mix of long term debt. Funds with SWP strategy built to give them a “monthly salary”.

Abhinav Angirish – Founder, Investonline.in

There is good news for the elderly in the budget. Nirmala Sitharaman has increased the investment limit for Senior Citizen Savings Scheme (SCSS) to 30 lakh 15 lakh and investment limit for Post Office Monthly Income Scheme (POMIS) 9 lakhs. For people above 60 years of age looking for government-backed regular income with almost risk-free returns, two schemes- SCSS and PMVVY- are quite good options. But the PMVVY scheme is going to expire in March 2023 as the government has decided to discontinue it. The good news is that the government has increased the limit of Senior Citizen Savings Scheme (SCSS).

Yet, the truth is that debt-only strategies cannot beat inflation over the long term. Because of this, it is recommended to allocate some of one’s retirement savings to equity investments. It shouldn’t be a major part of your portfolio; Equity exposure of 25% to 40% may be considered depending upon the size of the corpus, risk tolerance and income needs.

This will ensure that at least some part of the corpus grows at a rate that is faster than the rate of inflation. Retirees are advised to invest in equity related products including Large-Cap Index Funds, Flexi-Cap Funds and Aggressive Hybrid Funds.

Yash Joshi, Co-Founder and Director Uppercrest Wealth Pvt. Limited

Senior citizens can make the most of the Senior Citizen Savings Scheme (SCSS) and Pradhan Mantri Vaya Vandana Yojana (PMVVY) by considering the following points:

Invest in SCSS and PMVVY: Senior citizens who are looking for a secure and guaranteed source of income should consider investing in SCSS and PMVVY. Both these schemes are specially designed for senior citizens and offer higher rate of interest as compared to other fixed income investment options.

Know Eligibility Criteria: An individual must be 60 years or more to invest in SCSS. In case of PMVVY, the minimum age is 60 years, and there is no upper age limit. Both the schemes are available for Indian citizens and NRIs.

Know the investment limits: The maximum investment limit in SCSS is Rs. 15 lakhs, while in PMVVY it is Rs. 1.5 million. Senior citizens should consider investing in both these schemes to maximize their returns.

Consider tenure: SCSS has a tenure of 5 years, which can be extended for another 3 years. The tenure of PMVVY is 10 years. Senior citizens should consider the tenure of both these schemes while investing.

Know the interest rates: The interest rates for SCSS and PMVVY are fixed and revised on a quarterly basis. Currently, the interest rate for SCSS is 7.4%, while for PMVVY it is 7.4% per annum.

tax benefits: Investment made in SCSS is eligible for tax deduction under section 80C of the Income Tax Act. The interest earned on SCSS is taxable. In case of PMVVY, the interest earned is taxable.

Reinvest the Returns: Senior citizens can reinvest the returns earned from SCSS and PMVVY to maximize their returns. Reinvestment option is available in SCSS, and senior citizens can invest the maturity amount in PMVVY to earn higher returns.

In short, senior citizens can make the most of SCSS and PMVVY by considering the eligibility criteria, investment limit, tenure, interest rates, tax benefits and reinvestment options. Senior citizens should consult a financial advisor before investing in any scheme to determine the best investment option for their specific situation.

Sagar Lele, Wealthbasket curator and founder of Roopeeting

Both SCSS and PMVVY are highly attractive schemes given their high returns, guaranteed regular income and sovereign backing – perfect for those looking to generate steady returns over their retirement.

The rate of 8% on SCSS and 7.4% on PMVVY can be locked in for the next 5 and 10 years respectively if an individual invests before March 31, 2023. From April 1, 2023, while the opportunity on SCSS doubles with this upper limit running from Rs. 15 lakh to Rs. 30 lakh, that the PMVVY would cease to exist unless the government takes the scheme forward.

Most of these plans can be made by investing Rs. 15 lakh each now in SCSS and PMVVY, and making an additional investment of Rs. 15 lakh in SCSS after April 1, 2023. Together, at current rates, these would amount to Rs. 3.5 lakhs annually, as well as returning the amount invested at maturity.

Additionally, a couple can open individual accounts and double their investment instead of opening a single account, giving them the ability to invest a larger amount.

Prashant Gupta, Founder and CEO, Caerus3 advisory and think-tank

Investment limit in Senior Citizen Savings Scheme has been increased from 15 lakhs 30 lakh in this year’s budget, which was a boon for senior citizens. Senior citizens can also invest 15 lakh in the Pradhan Mantri Vaya Vandana Yojana (PMVVY), but only till March 31, 2023, after which it will be phased out. By investing the maximum amount allowed, senior citizens can benefit the most from these programs.

With the current SCSS interest rate of 8% per annum, they can invest Rs. 15 lakh and get an annual interest income of Rs. 1.2 lakh for a period of five years. Similarly, the current PMVVY pension rate is 7.4% per annum, which is Rs. 1.11 lakh in income. Since the tenure of PMVVY is 10 years, the investor is guaranteed to get Rs. 1.11 lakh annually for 10 years. Under these programs, senior citizens will be able to earn a total income of Rs. 2.31 lakh every year.

Nirav Karkera, Head of Research, Fisdom

Both SCSS and PMVVY are excellent investment opportunities supported by the government. While both offer tax benefits, if one has to prefer low lock-in and high returns, then SCSS should clearly be preferred. However, at this time, senior citizens can also consider direct bank fixed deposits which are currently offering attractive returns, while many banks offer additional interest to senior citizens.

Ashwini Kapila, Managing Director, GetSetup India

As soon as one retires, one’s steady monthly salary stops. Therefore, the sources of income are limited to returns from investments made throughout the working life and returns from superannuation funds. This corpus becomes the prime investment for the stream of income that a retired person would like to receive.

These plans have strong features, which make them attractive for older adults looking to accumulate their retirement funds. Government-backed schemes are safe; Provide a reasonable return and most importantly for a retired person, provide the option of regular cash flow from time to time. My own father, a retired defense personnel is regularly using the benefits of these schemes for his corpus.

Vishal Vij, Founder and Managing Partner, Nesteg

Both the options are for senior citizens aged 60 years and above to generate risk free income. SCSS is a risk-free Fixed Deposit (for 5 years, extendable for 3 years) while PMVVY is a pension scheme offered by LIC for a period of 10 years. Currently, the budget has raised the maximum investment limit for SCSS to Rs 30 lakh from the existing Rs 15 lakh (starting from 1 April 2023), while PMVVY is likely to expire on March 31, 2023 (unless extended by the government). is done). Senior citizens who want risk free, predictable and government backed regular income on their retirement corpus can choose these instruments. PMVVY can only be purchased through LIC till 31st March 2023.”

Both these options are intended for senior citizens who are 60 years of age or above and want to generate a secure and predictable source of income. Senior Citizen Savings Scheme (SCSS) is a Fixed Deposit which is risk free for a period of 5 years, with the option of extension for an additional 3 years. In contrast, Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme offered by LIC which runs for 10 years.

In the recent budget, the maximum investment limit for SCSS has been raised from the existing Rs 15 lakh to Rs 30 lakh, with effect from April 1, 2023. However, PMVVY is set to expire on March 31, 2023, unless extended by the government. These instruments are suitable for senior citizens who wish to secure a regular, government-backed income to fund their retirement. It is important to note that PMVVY can be purchased through LIC only till March 31, 2023.

Ashok Chhajer as CMD of Arihant Superstructures Limited

I suggest that senior citizens should utilize the full limit of SCSS to get 8% interest, although banks may offer better rates in the next few months but it may be for a shorter period. The rates of PMVVY scheme are low, so this can be avoided.