How to make your old retired parents RICH ????

This blog is for all of our elderly respected and beloved parents…

Who sacrificed on daily basis their youth in order to take care of us nicely…

As per Lord Buddha "I tell you, monks, there are two people who are not easy to repay. Which two? Your mother & father.

So it is our moral responsibility to take care of them in their old ages…. Both emotionally and financially.

If your parents are retired and got their pension and gratuity, then you can help them in growing their retirement money in many folds….. How?????

In our young days we may be aggressive investor or trader,,, but in the retirement age people never want to risk their retirement fund either in stuck and MF….Eventually in India most of the old parents use Post office savings as investment weapon… Is not it!!!! At least I have seen this in my family and surroundings for decades…. As a guy from a small city I noticed people prohibit themselves from stock and mutual funds due to their lack of awareness ….During old days they save their money in nearest Post Office for easy accessibility and less paper work.

And guys this PO deposits also can make your parents rich…. How???

But you guys need to assist them in become one J No I am not saying you guys to add money to their retirement kitty… if you do that highly appreciated. You just need to the help them in doing paper work of bank and other offices…

Let us start our calculation as below:

You might have heard that there is scheme “Senior Citizen Savings Scheme (SCSS) Account”.

where it gives 9.2% for people above 60 years old and above 55 years (special case).

Suppose your parents retired with 50 lakh pension and gratuity..In above scheme they can make a deposit of maximum 15 lakh. So the quarterly interest of 15 lakh would be Rs 34, 500/-

If they deposit the same amount in a postal RD account then do you know what would be the interest they will accumulate in the Postal RD account???? J

No wonder it would be around 8.6 lakh (Rs 858,483.08 /-) without any risk any hard work, rather your money will make money for itself. Again the power of compounding comes into picture.

 

 

Post Office
SCSS	Quarterly Interest 9.2%	RD deposit 8.4%	Duration	Interest accumulated	Net Money After 5 years(In lakh)
1500000	34500	34500	5 years	858,483.08	2358483.08

 

 

Do you know what is the net return here, It is almost 57 % J !!!

Net Return is 23.6Lakh!!

Without any hassle and risk with 100% peace of mind J

 

If you guys make little effort and help your parents to put the same interest amount in some high interest earning senior citizen RD with some other bank or corporate RD then the interest would be definitely much more than this J as below :

 

Post Office		Other Bank RD/Corporate RD
SCSS	Quarterly Interest 9.2%	RD deposit 9.75%	Duration	Interest accumulated	Net Money After 5 years
1500000	34500	34500	5 years	885813.47	2385813.47

 It is almost 59% return!!!

 So the net return would be around 24 Lakh J

Suppose some bank is giving 11% interest on RD then the return would be as below:

Post Office		Other Bank RD/Corporate RD
SCSS	Quarterly Interest 9.2%	RD deposit 11%	Duration	Interest accumulated	Net Money After 5 years(In Lakh)
1500000	34500	34500	5 years	922,840.45	2,422,840.00

 Wow it is almost 62 % return

 So the net return would be around 24.5 Lakh J

 

Now you guys can put an argument, why saving and compounding at this old age …..

I would say with improved health care facility, the average Indian life span increased to 72 years old for women and 70 year for man.

[The average all-India life expectancy figure is currently 63.7 years for both males and females. By 2016, an average Indian male and female will live till 68.8 and 71.1 years, respectively. This will increase by one more year for an average male by 2021 (69.8 years) and by 1.2 years for an average female (72.1), according to Union health ministry's life expectation (LE)]

Also year on year inflation is getting increased. Ex: Please check Horlicks price every year you will get to know. You can compare other living cost like food, milk HRA etc...Hence the saving money which we have today in our account may not be sufficient tomorrow.We need to work in order to increase our saving so that tomorrow we will not fall in short of money.

More over you can go to your parents and speak; they will tell you better than me because they have seen more life and world than me J

Apart from for SCSS deposit, your parents can show in 80 C tax savings.

So why I wrote this, you guys must know:

If we keep this saving spirit for coming days then as a family we can be self dependent. And I do believe as a country we can become little rich too.

When you guys become parents you can teach your kids saving and investment in their early years.

In a recent study it has been found that –

“Parents failing to teach their children how to manage their money are responsible for their offspring facing financial difficulties when they become adults, according to new research.”

The study also reveals “parents are largely to blame for lack of finance skills.”

This is definitely a great threat to our society!!

Hence we need to educate ourselves on finance matters.

Do you guys agree to this ???

Note : Here i did not consider the taxation part.