Securing Retirement: Best Regular Income Strategies Post Retirement

There are a lot of financial challenges at the retirement stage, although it is often seen as a golden period of life. In 2025, due to better healthcare and lifestyle changes, the current average life expectancy of an Indian Citizen is 72.48 and is increasing every year. Generally, retirement age is assumed as 60 years; this leaves at least 12-14 years to plan for. For maintaining the good standard of living and peace of mind, one needs to plan early to get regular post-retirement income. 

For many years, retirees in India relied heavily on bank fixed deposits (FDs). They were considered safe, simple, and easy to manage. However, the interest rates on FDs have been dropping steadily. What used to feel like a secure income option now often falls short of covering rising expenses. This has pushed retirees to look at other ways of ensuring a steady income. The key lesson here is that depending on just one option is risky. Diversification, or spreading money across different schemes, is the best approach.

One of the common tools for retirement income is the annuity policy. An annuity guarantees regular payouts, either immediately or after a few years, depending on the type chosen. With an immediate annuity, the pension starts right after you pay a lump sum. With a deferred annuity, you invest now but start receiving money only after a set period.

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The good thing about annuity plans is that they provide guaranteed income for life, which brings a sense of stability. However, the returns are not very attractive. At present, most annuity plans give about 5–7% per year, and the entire payout is taxable. Also, the rates are not very transparent, which can be frustrating for investors.

It’s not advisable to put all your money in annuities. We need to see other regular income options also, which are safer and give good returns too.

Senior Citizen Savings Scheme (SCSS): This is a government-backed popular scheme for 60 years and above which is offered by banks & post offices. The Indian citizen can open an SCSS account individually or jointly. The current interest rate for this scheme is 8.20% per annum for the first quarter of the financial year 2025. Once invested, the rate becomes constant for the entire tenure which is five years. If required, this tenure can be extended for a further 3 years.

The maximum limit which you can invest is Rs 30 lakh. The interest is paid quarterly which helps the senior citizen in managing their expenses. The interest paid is fully taxable but the deductions under section 80C of the Income Tax Act is allowed for this scheme. From the point of view of safety and regular returns, this scheme is one of the best options for senior citizens.

Pradhan Mantri Vaya Vandana Yojana (PMVVY): This scheme is offered by LIC. The current interest rate is 7.4% per year and individuals aged 60 and above can invest in this plan. The senior citizen can receive a pension monthly, quarterly, half-yearly or annually. The upper investment limit is Rs 15 lakhs for individuals and this scheme provides a guaranteed pension for 10 10-year tenure. Upon the death of the individual, the full purchase price is returned to the registered nominee. The individual can also avail the loan on this scheme up to 75% of the purchase price after the policy is active for three years.

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Post Office Monthly Income Scheme (POMIS): This scheme is for five years and currently offers 6.6% per annum, which is paid monthly. The maximum investment is ₹4.5 lakh for a single account and ₹9 lakh for a joint account. Though the returns are not as high as SCSS, the monthly payout helps cover regular expenses. This is another safer option for senior citizens.

Finally, bank fixed deposits for senior citizens are still a favourite for many. The main reason is stability and familiarity. Most banks offer slightly higher interest—about 0.5% extra—for senior citizens. Depending on the bank and tenure, rates currently range between 7% and 8.8%. While taxable, FDs remain attractive for those who prefer simplicity and flexibility in tenure.

To sum up, the goal during retirement is not just to earn high returns but to ensure a steady and safe income. A smart approach is to spread investments across annuities, SCSS, PMVVY, POMIS, and bank FDs. This mix balances safety with returns and provides cash flow at different intervals—monthly, quarterly, or yearly. With careful planning and diversification, retirees can enjoy their golden years with financial peace of mind.

Professor Pratik Priyadarshi and Dr Sunil Kadyan are Associate Professors at Birla Institute of Management Technology (BIMTECH), Greater Noida.