How senior citizens can invest to beat inflation

– Investment ₹15 lakh in SBI Balanced Fund

– ₹mod. 10 lakh in

– ₹1 lakh in corporate bonds

– ₹1.5 lakh per annum in SBIL Pension Bonds.

– ₹10 lakh in FD plan

– Senior Citizen Savings Deposit ₹15 lakh

How do I invest the balance for growth to beat inflation?

I am drawing net pension of ₹1 lakh, and covered by CGHS for 10 years.

– Name withheld

Your plan to build a solid portfolio that can beat inflation throughout the year is crucial during the post-retirement phase. your pension ₹1 lakh certainly gives you a cushion at present, but its purchasing power will decrease due to inflation during this period. Taking into account the 6% inflation, 1 lakh for today would be equal to ₹75,000 more after 5 years ₹55000 after 10 years. Also, the post-retirement phase is usually for 20 – 25 years, so your overall portfolio should generate higher returns than inflation. Based on the information shared in your query most of your investments are in debt instruments and at present the only equity allocation you have is through SBI Balanced Funds which has around 70% in equities. Effectively at present, your investment is around 10-11% in equities and the rest in debt.

Generally even in the post-retirement stage, you should have proper equity allocation as this is the only asset class which has the ability to consistently beat inflation in the long run. For your investments, you can consider a mix of Debt, Conservative Balanced and Equity, where the equity allocation can be in the range of 25-30% depending on your needs. If you are planning to use a portion of your accumulated corpus for your monthly needs along with your pension in future, which may be a possibility considering inflation, you should invest in equities from the existing corpus. ₹1 crore.

For debt investment, you have already invested in Senior Citizen Savings Scheme and you can consider investing in Corporate Bond Funds and Banking and PSU Debt Funds. In Hybrid or Balanced Funds, you can invest in Balanced Advantage or Dynamic Asset Allocation Funds instead of Equity Oriented Hybrid Funds as these are less risky. For equity allocation, you can invest in index funds, large cap and flexi cap funds.

– Reply to Harshad Chetanwala, founder of MyWealthGrowth.com

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