Retiring without a pension isn’t unusual in India today. With more private-sector jobs, gig work and self-employment in the mix, many people end up without a fixed monthly pension when they stop working. The challenge then becomes clear: how do you make your savings last while also ensuring regular income for day-to-day expenses?
The good news is that you can still create a dependable stream of income using the right mix of strategies. It starts with being realistic about future expenses and making smart use of the tools available to you.
Start With a Clear Estimate of What You’ll Need
The first step is to map out your post-retirement expenses. Factor in household bills, medical costs, travel, food and gifts or occasional luxuries. This gives you a ballpark figure of how much income you’ll need each month. Don’t forget to include inflation. Even if your costs feel low today, they are likely to grow over the years. Once you have this number, it becomes easier to explore income-generating options that fit your lifestyle and savings.
Create a Monthly Paycheck Using Multiple Sources
- Set Up a Monthly Income Plan
A monthly income plan is a simple product that gives you regular payouts while preserving your capital. These are typically mutual fund-based options where a portion of the fund generates income and the rest aims for modest growth. While returns are not guaranteed, these plans are designed to provide a steady flow of money. They work best for those who are moderately risk-tolerant and want predictable income without locking away their entire savings.
- Invest in Annuity Plans
An annuity is a contract between you and an insurance company. You invest a lump sum and in return, the insurer promises to pay you a fixed amount monthly, quarterly or annually. You can start receiving payments immediately or defer them to a later date. These plans are especially helpful for retirees who prefer stability over high returns. Just be sure to understand the terms, especially whether the annuity ends with your lifetime or continues for a spouse.
- Use a Systematic Withdrawal Plan (SWP)
If you’ve invested in mutual funds, you can set up a Systematic Withdrawal Plan. This lets you withdraw a fixed amount every month, offering flexibility and control over your money. Unlike annuities, your capital remains accessible. But since mutual fund values can fluctuate, it’s ideal to consult a financial advisor and choose funds with a balanced risk profile.
- Consider a Savings Plan With Regular Payouts
If you’re still in your working years, one way to prepare is by choosing a savings plan that includes guaranteed returns or periodic payouts. These are often insurance-linked plans that build a corpus over time while also offering steady income later. Many of them offer added tax benefits under Section 80C, which can help while you’re still earning.
- Explore Rental Income
If you own a property, renting it out can generate a reliable stream of income. It may take effort to maintain tenants or work with a property manager, but it gives you cash flow and potential appreciation in the long run. Be realistic about vacancy periods and upkeep costs while planning this as an income source.
- Open a Post Office Monthly Income Scheme (POMIS)
For low-risk investors, POMIS is a helpful option. It’s a government-backed scheme that provides a monthly income on deposits for a five-year term. The interest rates are fixed and revised quarterly. Though taxable, POMIS is ideal for those who want safety and predictability with no market exposure.
- Use Bank FDs With Laddering
Rather than locking all your money in one fixed deposit, divide it into smaller FDs with different maturity dates. This way, you get periodic returns while avoiding interest rate traps. Some banks also offer monthly or quarterly interest payout options. This is a useful strategy if you prefer liquidity with minimal risk.
- Diversify and Rebalance Regularly
Once your income sources are in place, revisit your strategy every year. Costs may increase, interest rates may change or new opportunities may arise. By adjusting your investments, you ensure your plan stays aligned with your needs. Diversification also helps reduce the impact of any single source underperforming.
In Summary
You don’t need a traditional pension to enjoy a comfortable retirement. With proper planning and the right mix of products, you can build an income that is steady, flexible and suited to your goals. The aim is to ensure your lifestyle remains unaffected.
Start early if possible. But even if you’re close to retirement or already there, it’s never too late to rethink how your money works for you. A reliable income stream is about combining preparation with informed choices. The rest is just consistency.
