Best Monthly Income Scheme for You

best monthly income scheme

Large number of retired officers keep asking us about avenues for getting tax-efficient monthly income. Having considered almost all available avenues like real-estate (residential or commercial) rent, POMIS (Post Office  Monthly Income Scheme), SCSS (Senior Citizens Savings Scheme), monthly interest from bank FDs etc, we find that the Systematic Withdrawal Plans (SWP) of Debt Mutual Funds are the best in terms of tax-efficiency, flexibility of withdrawal, flexibility of investment, and better returns on investment.

If carefully planned, one could pay as low a tax as 4-5% on the monthly income received even if you are in 30% tax bracket! And this ‘additional pension’ amount can be set-up as per your need at a frequency as desired. Further, this amount can be increased, decreased, stopped, or restarted any time one wants. Returns from Debt MFs are likely to be higher than any of the other avenues while being invested as safely as bank FDs and Govt Bonds.