Ways to earn regular income post-retirement

The golden years, often known as retirement, are the second half of your life. Planning and investing are essential if you want to retire comfortably. And the sooner you start, the higher your chances of building a solid retirement fund.

You enter the asset distribution phase when you retire or become close to retiring. During this period, the money you've saved will be used to cover your retirement needs. As a result, you'll need to move your money from high-risk investments (such as equity-oriented mutual funds) to lower-risk investments that will provide you with a steady income once you retire (to take care of the regular expenses). This is required in order to protect the wealth that has been produced.

• SWP from Mutual Funds - If you've been investing in mutual funds, you've probably built up a sizable retirement fund. To build a cash inflow stream from this corpus after retirement, opting for the Systematic Withdrawal Plan (SWP) is an excellent choice. An SWP allows you to withdraw a certain amount of money from a mutual fund plan on a regular basis (monthly, quarterly, half-yearly, or annually) while still having the opportunity to earn profits on the remaining assets over time. It not only provides you with a steady stream of money, but it also teaches you how to spend it wisely.

• Bank Fixed Deposits (Interest Paid Monthly or Quarterly) – A bank fixed deposit has historically been the favoured option for risk-averse investors and older persons. However, if you want to make a consistent income, you'll need to choose the right strategy. You'll be able to meet your liquidity and cash flow retirements only then.

• Pradhan Mantri Vaya Vandana Yojana – This is a Government of India programme (in the form of a pension insurance) offered by the Life Insurance Corporation (LIC), with a minimum entrance age of 60 (and no maximum entry age). This programme allows you to invest up to Rs 15 lakh in a flat payment (called the purchase price) and earn a guaranteed annualised return in the form of a pension throughout the policy's 10-year duration (paid monthly, quarterly, half-yearly, or yearly). The government sets the interest rate, which is reset every year.

• Senior Citizen Savings Scheme (SCSS) — This is a government-run savings programme for senior citizens. This is another government-backed small-savings plan for retirees aged 60 and over, and deposits may be made in single or joint names with a spouse for a 5-year period. An SCSS account may be opened by anybody between the ages of 55 and 60 who has retired on superannuation or under the Voluntary Retirement Scheme (VRS).

Individually or jointly with a spouse, a SCSS account may be formed. The capability of nomination is provided both at the time of account opening and thereafter.

SCSS allows for a maximum lump sum deposit of Rs 15 lakh and a minimum deposit of Rs 1,000. Investments in SCSS are eligible for a deduction under Section 80C of the Income Tax Act, 1961 (up to Rs 1.50 lakh per year).

The interest generated is compounded yearly and credited quarterly to your savings bank account throughout the 5-year maturity term (payable on the first working day of April, July, October and January). If the interest amount is higher than Rs 50,000 per year, TDS will be deducted, and tax will be deducted according to your yearly gross total income.