How should senior citizens plan their investments to beat inflation?

Here is how one can invest in three buckets that can help them take care of post-retirement expenses across years:

Inflation will continue to be around for years, even though we keep progressing as a country. Hence, investors especially senior citizens must keep inflation in mind whenever they invest in any avenue. There is no doubt that the risk-taking ability of senior citizens will remain low, but they cannot rely completely upon low-risk investment options like fixed deposits and short-term debt funds to take care of their needs throughout the post-retirement stage.

Harshad Chetanwala, Co-Founder, MyWealthGrowth.com, says, “An individual can follow the bucketing strategy where he/she can invest in different avenues by creating buckets based on their needs and withdrawals. The investment for short term requirements can be in liquid funds & banks, for the medium-term it can be in debt funds and small savings schemes, whereas for long-term withdrawals one can consider equity diversified mutual funds. One can split one’s investment into the above given three buckets and withdraw every month from the assigned bucket for a defined period.”

He further adds, one way could be to invest in liquid and bank accounts for the near term or immediate monthly withdrawals for a couple of years. At the same time, one could invest in debt and small saving schemes along with equity funds for withdrawal in future.” Following this strategy will help the investment in debt and equity to grow while the investor withdraws from short-term instruments.

Here is how one can invest in three buckets that can help them take care of post-retirement expenses across years:

Investment	Monthly withdrawal
Low Duration Funds, Bank Account & Fixed Deposits	First 36 months (First 3 Years)
Debt Funds & Senior Citizen Saving Scheme	Next 108 months (4th year to 12th year)
Equity Funds (Index Funds and Large & Mid Cap Funds)	Next 156 months (13th year to 25th year)

Experts say, such a strategy can work well and avoid outliving the savings post-retirement. Chetanwala says, “When the investment is done across different asset classes and instruments the overall return can beat inflation.” Havings said so, it is always advised to keep aside some contingency funds in the bank account all the time even with the above-suggested buckets to take care of any emergency.

What are some of the inflation-beating investments options for senior citizens?

There are various investments options for senior citizens to invest in, with attractive interest rates and returns. Some of the popular investment options that senior citizens can look includes Senior Citizen Savings Scheme, Pradhan Mantri Vaya Vandana Yojna, Tax-Free Bonds, Corporate Fixed Deposits of good companies, short and medium duration debt mutual funds, Banking and PSU Debt Funds, Corporate Bonds Fund and Equity Diversified Mutual Funds (Index and Large Cap). These are some of the investment options that can help one beat inflation in the longer term.