How to park Rs 60 lakh for safe Rs 10-20k monthly income post-retirement
Planning retirement income wisely is crucial for financial security. With a ₹60 lakh corpus, retirees can safely aim for a monthly income of Rs 10,000–20,000 by exploring options such as the Senior Citizen Savings Scheme, FDs, and debt funds, rather than high-cost ULIPs. Choosing the right mix ensures steady returns, liquidity for goals like weddings, and peace of mind in retirement.
- Jul 9, 2025,
- Updated Jul 9, 2025 2:29 PM IST
My dad just retired with a Rs 60 lakh corpus and needs Rs 10-20,000 monthly income with minimal risk, plus some funds left for my wedding in a year. SBI pitched him a ULIP, but I’m wary of locking money for 5 years. I’m considering SCSS, bonds, a small SIP in Nifty funds, and FDs—does this plan make sense, or is there a better way to balance safety and returns?
Advice by Rajani Tandale, Senior Vice President, Mutual Fund at 1 Finance
Generally, ULIPs are pushed by banks because they earn high commissions from insurance companies. However, ULIPs have significantly higher expense ratios compared to mutual funds or other market-linked investment options. The first rule of smart financial planning is to keep insurance and investments separate - never mix the two.
ULIPs typically come with a 5-year lock-in, high initial charges, and market-linked returns, making them unsuitable for someone seeking predictable income and liquidity, especially in the short term. They also blur the line between insurance and investment, often compromising the effectiveness of both.
Since your father has just entered retirement, the focus should be on capital preservation and steady returns, not on aggressive or long-locked growth products like ULIPs.
A More Suitable Approach
Let’s break down a more effective strategy using safer, more liquid and tax-aware options:
1. Senior Citizen Savings Scheme (SCSS)
This is a government-backed scheme specifically designed for retirees. It offers a fixed return (currently around 8.2% per annum) and quarterly payouts - ideal for generating stable income. Your father can invest up to ₹30 lakhs and expect a quarterly income of around rs.61,500, translating to a monthly average of Rs. 20,500, which perfectly meets the income requirement.
SCSS has a 5-year lock-in, but premature withdrawals after 1 year are allowed with minimal penalty - offering a reasonable balance between return and liquidity.
2. Fixed Deposits (FDs)
Senior Citizen FDs in banks like SBI, HDFC, and ICICI offer ~7.5–8% interest. A portion of the corpus (say ₹10–12 lakhs) can be kept in short-term FDs (1-year tenure) to fund your wedding or emergency needs. You may also consider FD laddering (e.g., 1-year, 2-year, 3-year tranches) to improve liquidity without sacrificing returns.
3. Debt Mutual Funds
These funds invest in government and corporate bonds, offering moderate but relatively stable returns. While they do carry some market risk - such as interest rate risk or credit risk - high-quality debt funds (like short-duration funds or target maturity funds) can yield around 7%–8% annually in favorable conditions.
Unlike SCSS, debt mutual funds do not have a lock-in period, offering better liquidity and flexibility. However, taxation is similar to SCSS, as capital gains on debt mutual funds are now taxed as per your income tax slab, regardless of holding period (post-April 1, 2023 changes).
If you're looking for moderate returns without locking in your money, and are comfortable with slightly higher risk compared to fixed-income instruments, debt mutual funds can be a suitable part of your portfolio.
4. Equity SIP in Nifty 50 Fund
Since your father has low risk appetite, limit equity exposure to 5–10% of the corpus. A small SIP in a Nifty 50 index fund can help beat inflation over the long term, but it’s not intended for immediate income needs.
> Common Mistakes to Avoid
- Chasing high returns through ULIPs or PMS (unsuitable for low-risk investors)
- Choosing endowment or money back policies generally mis-sold by banks.
- Locking the entire corpus in long-term instruments without liquidity planning
Final takeaway
You’re thinking in the right direction. Avoid the ULIP trap and stick with a mix of government schemes (like SCSS), bank FDs, and debt mutual funds. This approach offers stable income, liquidity for the wedding, and reasonable long-term returns - all while keeping risk in check. Consulting a SEBI-registered fee-only financial advisor can help fine-tune this strategy for your father’s unique needs.
My dad just retired with a Rs 60 lakh corpus and needs Rs 10-20,000 monthly income with minimal risk, plus some funds left for my wedding in a year. SBI pitched him a ULIP, but I’m wary of locking money for 5 years. I’m considering SCSS, bonds, a small SIP in Nifty funds, and FDs—does this plan make sense, or is there a better way to balance safety and returns?
Advice by Rajani Tandale, Senior Vice President, Mutual Fund at 1 Finance
Generally, ULIPs are pushed by banks because they earn high commissions from insurance companies. However, ULIPs have significantly higher expense ratios compared to mutual funds or other market-linked investment options. The first rule of smart financial planning is to keep insurance and investments separate - never mix the two.
ULIPs typically come with a 5-year lock-in, high initial charges, and market-linked returns, making them unsuitable for someone seeking predictable income and liquidity, especially in the short term. They also blur the line between insurance and investment, often compromising the effectiveness of both.
Since your father has just entered retirement, the focus should be on capital preservation and steady returns, not on aggressive or long-locked growth products like ULIPs.
A More Suitable Approach
Let’s break down a more effective strategy using safer, more liquid and tax-aware options:
1. Senior Citizen Savings Scheme (SCSS)
This is a government-backed scheme specifically designed for retirees. It offers a fixed return (currently around 8.2% per annum) and quarterly payouts - ideal for generating stable income. Your father can invest up to ₹30 lakhs and expect a quarterly income of around rs.61,500, translating to a monthly average of Rs. 20,500, which perfectly meets the income requirement.
SCSS has a 5-year lock-in, but premature withdrawals after 1 year are allowed with minimal penalty - offering a reasonable balance between return and liquidity.
2. Fixed Deposits (FDs)
Senior Citizen FDs in banks like SBI, HDFC, and ICICI offer ~7.5–8% interest. A portion of the corpus (say ₹10–12 lakhs) can be kept in short-term FDs (1-year tenure) to fund your wedding or emergency needs. You may also consider FD laddering (e.g., 1-year, 2-year, 3-year tranches) to improve liquidity without sacrificing returns.
3. Debt Mutual Funds
These funds invest in government and corporate bonds, offering moderate but relatively stable returns. While they do carry some market risk - such as interest rate risk or credit risk - high-quality debt funds (like short-duration funds or target maturity funds) can yield around 7%–8% annually in favorable conditions.
Unlike SCSS, debt mutual funds do not have a lock-in period, offering better liquidity and flexibility. However, taxation is similar to SCSS, as capital gains on debt mutual funds are now taxed as per your income tax slab, regardless of holding period (post-April 1, 2023 changes).
If you're looking for moderate returns without locking in your money, and are comfortable with slightly higher risk compared to fixed-income instruments, debt mutual funds can be a suitable part of your portfolio.
4. Equity SIP in Nifty 50 Fund
Since your father has low risk appetite, limit equity exposure to 5–10% of the corpus. A small SIP in a Nifty 50 index fund can help beat inflation over the long term, but it’s not intended for immediate income needs.
> Common Mistakes to Avoid
- Chasing high returns through ULIPs or PMS (unsuitable for low-risk investors)
- Choosing endowment or money back policies generally mis-sold by banks.
- Locking the entire corpus in long-term instruments without liquidity planning
Final takeaway
You’re thinking in the right direction. Avoid the ULIP trap and stick with a mix of government schemes (like SCSS), bank FDs, and debt mutual funds. This approach offers stable income, liquidity for the wedding, and reasonable long-term returns - all while keeping risk in check. Consulting a SEBI-registered fee-only financial advisor can help fine-tune this strategy for your father’s unique needs.