As per Indian law, any person above the age of 60 years is classified as a Senior Citizen. As senior citizens, you become eligible for a host of waivers and benefits in services offered by the government and in financial institutions. Senior citizens currently make up about 10% of the overall population and this percentage is steadily growing due to a fall in the birth rates and increase in the average life spans.
Most governmental, non-governmental and private sector organizations mandate retirement at the age of 60. Albeit lately, a few government departments have extended this to 65, the vast majority still retire at 60. This majority finds it hard to secure any gainful employment because of the stigma, amongst employers, that older people might be medically unfit.
Post-retirement life can be a roller-coaster ride unless one plans finances early on in life. As per a report titled, The Future of Retirement, the Cost of Ageing, by HSBC, 56% of the working population lives paycheque to paycheque, putting themselves at grave risk for the future.
Saving schemes, by the Government of India, are offered to enhance savings and reduce the tax burden. Higher interest rates on bank deposits, tax-free withdrawals of money from pension schemes such as NPS, deductions from taxable income for investments and discounts on travel via road, rail or air are some of the key initiatives of the government. Affordable pension schemes such as the Atal Pension Yojana (APY) encourage small deposits to reap benefits post-retirement.
So, how does a senior citizen avail of these benefits?
What is a Senior Citizen Card?
A senior citizen card, issued by the Government of India, makes it convenient for citizens to enrol in social security schemes and avail benefits that are listed for them.
How to Get a Senior Citizen Card?
You may either apply online on the national government services portal or file an offline physical application. Guidelines to do either of them are listed below for your perusal:
Please visit the national government services portal or the government website of the state that you belong to. Keep the following documents handy before you log in and begin your application:
1. Proof of Identity: The following documents are acceptable:
- Voter ID card
- Aadhaar Card
- Driving License
- Arms License with Photo Graph
- Central Government Health Scheme Card or
- Ex-servicemen Contributory Health Scheme photo card
- Ration card with Photograph
- Photo identity card issued by the Central Government or a State Government or a Public Sector Undertaking
- Pensioner Card having a photograph of the applicants
- Certificate of identity in original signed by Member of Parliament or Member of Legislative Assembly or a Gazetted Officer containing a duly attested photograph
- Bank certificate from the branch
2. Proof of Residence: The following documents are listed as acceptable as proof of the place you reside in
- Telephone (BSNL landline or post-paid mobile bill) on the Name of Applicant
- Voter Photo ID card
- Ration card
- Aadhaar Card
- Registered Rental Agreement (for a period of more than one year)
- Photo Passbook of Bank Account (Scheduled Public Sector and Regional Rural Banks only)
- House Allotment Letter
- Revenue Record
- Registered Sale Deed
- Certified Voter List
3. Proof of Age: A document as evidence to support your claim to be a senior citizen is needed.
- Birth certificate
- School leaving certificate
- Pan Card
Why should you have a Senior Citizen Card?
You will earn money and save a lot more too. Higher interest rates, special savings options such as the Senior Citizens Savings Scheme and concessions when you travel will add up to your savings.
- Special savings schemes with higher interest rates are offered by Banks and Post Offices
- Additional 0.5% interest on regular bank deposits
- Higher exemption slab implying lower tax outgo
- Tax-free withdrawals from pension schemes
- 40%-50% concession on tickets to travel by Indian Railways
- Dedicated counters available at the railway station
- 50% discount on air travel offered by select airlines
- Free health facilities and consultation at government-owned healthcare centres
- Discounts offered in select private hospitals
How to Safeguard your Retirement?
You buy 2kgs of Food A for Rs. 400. In another 10 years, the same 2kgs of Food A may cost Rs. 700 at a 6% rate of inflation. If you put in Rs. 400 today in a savings account, the amount would grow to Rs. 540 in 10 years. This amount can fetch you only 1.5kgs of Food A then.
Both these examples underline the need to generate wealth rather than “invest” in low-interest yielding instruments. Here are a few investments you should consider adding to your retirement portfolio:
1. Guaranteed Income4Life Plan
Guaranteed Income4Life, from Canara HSBC Life Insurance, gives you income streams to match future expenses. You can “accumulate” by investing during the premium paying term and defer the pay-outs for up to 10 years.
The plan offers bonuses and safe growth for long-term investors. After the annuity begins your income is guaranteed for the selected term. You can choose an income term ranging between 10 years to a lifetime.
2. Pension4Life Plan
Another smart policy, from Canara HSBC Life Insurance, that pays a regular guaranteed income is the Pension4Life Plan, wherein you will be paid the pre-defined annuity each month post-retirement. This policy gives you a guaranteed lifetime income that is transferred directly to your bank account.
The joint annuity option lets you remain stress-free about your partner’s expenses in case of your demise. There is another silver lining that returns the entire corpus to the family in case of your demise.
3. Invest 4G
Invest 4G is a ULIP plan from Canara HSBC life insurance. Invest 4G allows you to invest aggressively using equity fund allocations. You can manage your investment risk with automated asset allocation strategies while investing in equity funds. The ULIP also adds bonus units for long-term investors. You can use the systematic withdrawal option to draw a pension out of this plan after retirement.
Investment into all of these plans qualifies for deduction under section 80C. The maturity values and income from these plans can be tax-exempt if you follow tax-free limits while investing.
Retirement can be fun if you start planning early and stick to your plan at all times. Investment discipline is essential so that your lifestyle continues as is even after retirement. Your money, saved throughout your career, then becomes a safety net that would give you a predictable stream of cash flows.Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.