Times are changing, old school and orthodox thoughts are fast getting replaced by rational and free ones. The senior citizens of current age are smart enough to decide what they want to do after entering the retirement age. They certainly do not want to be at the expense of their children as the latter are being too busy to bother or care nowadays. The modern age senior citizens, are living up to the status awarded to them, by opting for Monthly Income Plan. MIPs because there is monthly inflow of assured returns in the form of dividends. The fact that some amount is invested in equity markets may raise concern for few. But in order to gain more one has to be open to risks. MIPs are what the senior citizens are considering to invest in without really worrying about the involved risks.
MIPs offer greater benefits when compared to other debt schemes such as Fds or Post office schemes. Liquidity is the liberty provided in MIPs. What is even more delightful is the tax free dividends obtained through this plan. Not to forget the higher assured returns received in MIPs. The senior investors can gain even more by choosing the growth MIP over dividend MIP. Money in the former one is not paid out monthly but it keeps growing inside the fund, the benefits of which can be obtained at the time of redeeming the funds. The compounding effect on your growth returns is cherry on the cake, makes the fund look very lucrative.
Senior citizens want to age gracefully in the sense that there is enough money to last them in their tough times such as medical emergencies. Income earned through MIP serves the stated purpose as there are high returns earned in dividend fund and good amount of money is accumulated due to compounding in growth fund. Investors may have different reasons for choosing either of the two funds but they are going to be self dependent and continue to live with dignity even after retirement.
There are certain factors that senior investors must take into consideration before buying MIPs. The NAV (Net Asset Value) of MIPs gets affected due to changes in the economic conditions such as interest rate changes. Any change in the latter will have an indirect effect on NAV. In the current economic situation, where the interest rates are high and NAV is low, it is plausible to think where the returns would come from. MIPs in such scenarios turn to equity portion of the portfolio to sustain returns. In a recession struck environment, the investor may not receive returns at all; this is the risk to be taken into account before buying MIPs.
There are so many other investment plans available in the market that are meant for senior citizens but the benefits of choosing MIPs over other plans like post office scheme and Fds are very many. The above discussed superior benefits are the only reason as to why senior citizens are biased towards MIPs. Risks are no longer barriers or deterrents for senior citizens as the little endurance for them can make their whole life easy and financially secure.
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