Smart Investment Avenues for Senior Citizens in India: Safety, Income, and Peace of Mind

By Pennycounts

Financial freedom in retirement comes from structured planning, not risky returns. Plan smart, live well.

So far, I have mostly been talking to my young audience through this blog. But today, with this post, I want to speak to seniors — those who are either retired or close to retirement, planning their next chapter, and trying to figure out how to meet their expenses from their retirement corpus while also leaving behind a legacy.

Mr. Sharma retired at the age of 60 with a handsome corpus and looked forward to a peaceful life after decades of 10-to-6 grind. Thankfully, PennyCounts was already guiding him - not just to retirement but through it. He had clarity — both on how to build the corpus and how to navigate the risks as retirement came closer.

However, Penny Counts didn’t stop at helping him plan for retirement. It also guided him on how to manage post-retirement cash flows, reduce tax outgo, and deploy his corpus smartly — so he could not only meet his daily expenses but also leave behind a legacy.

During his retirement discussions, he realised something important: Having a retirement corpus is just one part of the story. How you deploy that corpus — to generate regular income without eroding capital — is just as critical. Otherwise, even a sizeable retirement fund can disappear over time, leaving nothing for future generations.

Health Insurance First, Not Optional

As Mr. Sharma is no longer working, and has no financial dependents except his wife — with all children well-settled and independently earning — he didn’t require any life insurance. However, life doesn’t end with retirement, and what remains very much active is the need for robust healthcare planning.

Mr. Sharma understood that post-retirement, the biggest financial uncertainty is not lifestyle expenses, but medical costs — doctor visits, OPD charges, diagnostics, or a major health event. Thankfully, he had taken adequate health insurance cover well before retirement, during his younger years, when getting approved for a comprehensive plan was easier.

That decision proved wise. Today, even though the health insurance landscape has evolved and offers many plans tailored to the needs of senior citizens, they often come with limitations:

• Co-payment clauses
• High premiums
• Restricted sum insured or sub-limits
• Waiting periods of 12 to 48 months
• In many cases, outright rejection of new applications due to existing medical conditions.

By the time most people retire, critical ailments may have already developed, which can disqualify them from getting covered. That’s why Mr. Sharma made an informed and early decision — to cover both himself and his wife under a strong policy before hitting retirement age. 

For those who haven’t done this yet, visit platforms like Turtlemint, Coverfox, Trucompare or Policy Bazaar — you can compare senior citizen health plans, check features, and even buy a plan directly. Also explore top-up covers to enhance your total insured sum without sharply increasing premiums.

This principle doesn’t apply only to seniors. In fact, everyone who hasn’t achieved financial freedom yet must have health insurance. Medical expenses are unpredictable, and insurance is a non-negotiable hedge against that risk.

Young individuals, too, must ensure they have personal health insurance, even if their employer offers coverage. Because once the job ends, so does that benefit. And healthcare needs don’t retire — they only grow. With healthcare inflation at 10–15% annually, the smartest way to protect your future finances is to get insured early and stay adequately covered.

The Retirement Phase: Not Strategy-Free

Let’s come back to our topic — retirement is not the end, but the start of a new chapter of financial planning. For senior citizens, the goal is no longer aggressive growth; instead, it's about preserving capital, generating steady income, and ensuring peace of mind.

With inflation quietly eroding savings and healthcare costs rising faster than expected, every rupee must work harder. The market is flooded with investment options, but what suits you depends on your own financial situation, not what’s being pushed by marketing agencies or bank RMs. That’s why making informed choices — ideally with professional help — is key. This is where PennyCounts can be your trusted partner.

Retirement should be stress-free, not strategy-free.

Mr. Sharma’s Case Study: ₹2 Crore Corpus at Age 60

Let’s break this down with a relatable example.

Mr. Sharma, aged 60, retires with a corpus of ₹2 crore and owns a self-occupied house worth ₹2 crore. His monthly expense is ₹1 lakh, which, for the sake of conservatism, we assume will stay constant even though it may reduce slightly over time.

We also assume he’ll need income support up to the age of 90 — a 30-year retirement horizon.

Here’s the quick math: With 7% annual inflation, today's ₹1 lakh monthly expense will balloon to over ₹7.5 lakh per month by the 30th year. In total, Mr. Sharma would need approximately ₹6 crore over 30 years to maintain his current lifestyle.

But his existing corpus of ₹2 crore falls short unless it grows at ~10% CAGR, to beat inflation and fund these future cash flows while leaving a legacy. That’s the silent erosion inflation brings.

Mr. Sharma’s Goals from His Retirement Portfolio

•  Capital Preservation
•  Stable Monthly Income
•  Inflation-Beating Growth
•  Emergency Liquidity
•  Tax Efficiency
•  Estate Planning

However, going all-in on risky assets at this stage can jeopardize the entire retirement plan. Instead, Mr. Sharma needs a balanced approach — one that blends moderate growth with capital safety. If the corpus seems inadequate, Mr. Sharma can also explore these additional strategies:

1. Downsizing Lifestyle – Simplifying post-retirement expenses can add several years to corpus longevity.
2. Shifting to a Tier-2 City – Cities like Chandigarh, Lucknow, Coimbatore, or Pune offer a lower cost of living with decent healthcare and amenities.
3. Tapping House Equity – If needed, Mr. Sharma can unlock the value of his home either by selling it, reverse mortgage (less popular), or renting it out. After all, real estate is a part of the portfolio and must be counted into the retirement plan.

Alternatively, if corpus is sufficient, the home can be retained and passed on as a legacy — but that decision should be made consciously, not emotionally and based on the numbers. Let’s see the longevity of Mr. Sharma’s corpus.

Corpus Longevity Comparison

Scenario	Initial Investable Corpus (₹)	Monthly Expenses (₹)	Corpus Longevity
Retains Home	2,00,00,000	1,00,000	~27 years
Sells Home, Adds ₹1 Cr to Corpus	3,00,00,000	1,00,000	>30 years
Retains Home (Reduced Expenses)	2,00,00,000	90,000	>30 years
Sells Home, Adds ₹1 Cr to Corpus (Reduced Expenses)	3,00,00,000	90,000	>30 years

It’s clear that if Mr. Sharma agrees to downsize in terms of owning a smaller house and reducing lifestyle expenses, he’ll have better cash flow and peace of mind. Whereas, if he doesn’t downsize, he risks outliving the accumulated money. Therefore, the initial corpus size is critical.

Now that we have assessed all the scenarios, and we understand that in all the scenarios at 8.5% return, Mr. Sharma runs a risk of strain — though it’s relatively comfortable in the last scenario. Therefore, the best way forward is to reduce the lifestyle expenses and relocate to a tier-2 city. Even a marginal reduction in expenses would go a long way in ensuring the longevity of the corpus.

The next step is how and where to deploy the corpus to ensure adequate return at a relatively low risk. At this age and stage, Mr. Sharma needs low risk, high stability, high liquidity, and steady income. Equity is a risky asset but also gives a high return. Considering the fact that return should be more than inflation, equity has to be part of the portfolio mix — from 15–30% is ideal. Here are the instruments that’ll ensure capital preservation, stable monthly income, inflation-beating growth, and emergency liquidity:

Instrument	Estimated Annual Return	Key Purpose
Senior Citizen Saving Scheme (SCSS)	8.2% (quarterly payout)	Steady income
Post Office Monthly Income Scheme (POMIS)	7.4% (monthly payout)	Fixed monthly cash flow
RBI Floating Rate Bonds	8.05% (semi-annual)	Inflation protection
Tax-Free Bonds (secondary market)	5.8%–6.2% (annual)	Tax-efficient, predictable returns
Debt Mutual Funds (low duration)	~6.5% (post-tax)	Liquidity with moderate growth
Hybrid Mutual Funds	7%–12% (depending on allocation strategy)	Capital appreciation
REITs / InvITs	7–9% (quarterly payouts)	Income + diversification
Emergency Fund (Liquid + FD ladder)	~6%	Medical or urgent needs
NPS Annuity	~6%	Lifelong income, but low flexibility

Required Return Calculation: To generate ₹90,000/month or ₹10.80 lakh/year from ₹2–₹3 crore corpus, Mr. Sharma needs a return of around 8.5% per annum. While an 8.5% nominal return seems good, the real return after accounting for 7% inflation is a mere 1.3084%. This low real return means the corpus grows very slowly in real terms, making it challenging to sustain withdrawals over a long period. This is achievable through a smart blend of secure instruments, moderate-yield assets, and government schemes.

Final Thoughts

We saw from Mr. Sharma’s case — post-retirement can be stressful if your corpus is too low or your expenses are high. Therefore, post-retirement, your portfolio should offer peace, not panic. Your financial goal is not maximum return — it’s stable return with capital protection and timely cash flow.

Mr. Sharma’s case illustrates how, with ₹2–3 crore, a smart structure can meet monthly needs and preserve dignity. You can proportionately reduce the size of the corpus to align with your financial situation — however, the template remains the same.

The three pillars of a senior portfolio remain: security, stability, and simplicity. Diversify across instruments, avoid greed, and keep one eye on liquidity.

Retirement isn’t the end of earning. It’s the beginning of earning smarter — with less stress, more structure, and complete peace of mind.

Need help designing the retirement cash flow? Reach out to PennyCounts for a personalised plan.

The Psychology of Spending: Why We Buy What We Don’t Need — And How to Regain Control

By PennyCounts

Introduction: It’s Not Just About Money. It’s About Control

You step out to buy toothpaste. Twenty minutes later, you’re back home ₹2,000 poorer — with snacks, a new t-shirt, and some random kitchen gizmo.

Sounds familiar?

Let me tell you what happened one Sunday morning.

This was 2013 — no Zepto, no BlinkIt or Instamart.
We ran out of milk. In the pre-BlinkIt era, you either fetched it yourself or sent someone. Being the dependable man of the house, I walked to the local retail chain — the plan was simple: grab milk, be back in 5 minutes.

But I returned with milk, a chocolate bar, a kitchen scrub — and a ₹2,500 hole in my wallet, none of which were on my list.

And my wife’s question: “Milk lene gaye the, ya monthly ration?”

Why am I telling you this? Because this must have happened with you, your partner, or someone in your family too.

Ever pondered: why do we make such choices?

The answer is dopamine — a neurotransmitter in the brain that rewards us for novelty and gratification.

This is not about poor money habits. It’s about how our brain reacts in such environments.

There’s a dopamine hit from shopping — a momentary high. A sense of gratification. A feeling of ‘having done something.’

That Sunday’s purchase wasn’t just about milk. It became a psychological event.

Our spending patterns are influenced by emotions, social settings, and even how the store or app is laid out.

Daniel Kahneman, in Thinking, Fast and Slow, rightly said that most decisions aren’t made with full awareness. We think we’re being rational — but we’re often reacting to subconscious triggers and emotional cues.

Have you ever noticed how they place small, attractive items near the billing counter? That’s not a coincidence. They’re placed there deliberately — because marketers understand how your mind works sometimes better than you do.

Now, that moment of indulgence might give instant pleasure. The availability of easy credit — especially the omnipresent credit cards — has made it easier to indulge.

But when the credit card bill arrives, especially if you weren’t planning those purchases, it pinches — harder and earlier than you’d expect.

You don’t just upset your budget, but also derail your wealth creation journey.

When those credit card bills pile up — especially for things you didn’t plan — the pinch becomes very real.
So, what do we do when willpower fails?

It’s not guilt. It’s awareness.

Understanding why we spend the way we do is the first step.

The next is building better systems to handle it.

Why We Overspend — It’s Not Weakness, It’s Human Design

We don’t overspend because we’re bad with money; rather, our financial decisions are often swayed by emotions and psychological factors more than purely rational logic.

Our brain is wired to choose ‘now’ over ‘later’. Marketers know this and use psychological tricks to get us to say ‘yes’ before logic can catch up.

Most importantly, we lack clarity and focus about what we’re doing with our money.

You may have noticed — money doesn’t fix our flaws, it often magnifies them.

If someone has a pattern of spending everything they receive, an increase in income usually leads to more spending — not savings.

Broadly, here are the five biggest invisible forces behind unnecessary spending:

1. Influence of Past Conditioning & Emotional Spending

If you’re aware of Srinivas, you’d realize that his spending habits were affected by this very phenomenon. His difficult family history made him spend more than his short-term cash flows, which brought him to the brink of insolvency. Srinivas wanted to acquire all the luxuries and material possessions in a short span of time and was not ready to wait or save for them. His spending spree was fuelled by debt.

Similarly, emotions make you buy things — and it feels like a reward. That’s emotional spending — and it’s more common than you think.

T. Harv Eker, in The Secrets of the Millionaire Mind, states that buying things for immediate gratification is nothing more than a futile attempt to make up for our dissatisfaction in life. Negative verbal conditioning — like hearing “rich people are greedy” or “we can’t afford that” — can create a subconscious money blueprint that sabotages our efforts to build wealth.

For instance, if your motivation for money is rooted in anger or rebellion (say, against frugal parents), your mind may subconsciously associate money with negative emotions. This often leads to self-sabotage — through overspending, impulsive buying, or poor financial choices.

There’s no faster way to feel rich than spending money on really nice things, but that’s the opposite of being rich — which is defined by what you don’t spend.

This human tendency to prioritize immediate pleasure and short-term wins often results in counterproductive decisions — like selling winners too early or holding onto losing investments out of emotion. The age-old advice to “pay yourself first” even when bills are due directly challenges this bias. It builds self-discipline and internal fortitude.

In behavioral science, this is called hedonic consumption. You’re not just buying a product — you’re buying comfort, escape, or validation.

Rick, Cryder & Loewenstein (2008), in their study, showed that people often spend just to feel better — not because they actually need something.

2. Social Pressure – You Don’t Need It… Until You See Someone Else Has It

Comparison is silent, constant, and expensive.

Friends post their vacations. Colleagues upgrade phones. Someone on YouTube tells you your car is outdated. And suddenly, you feel the urge to ‘catch up.’

This is what Thorstein Veblen (1899) called conspicuous consumption. Today, it’s magnified through reels, ads, and influencers — all designed to make your perfectly fine life feel less than.

There is also a desire to appear rich or to show off wealth — often stemming from ego catching up with income, the need to follow trends, or a desire to signal that one has arrived.

Much of today’s consumer spending is socially driven — influenced by admired individuals, visual stimulation, and the desire for others’ admiration. This can lead to a “daily struggle against instincts to extend your peacock feathers to their outermost limits and keep up with others doing the same.”

Whether we like it or not, the constant nudges from social media have pushed us all to spend more. Only a few of us consciously resist the temptation to buy what’s new, flashy, or trending.

3. Marketing Manipulation – They Don’t Sell Products, They Sell Urgency and Greed

The monthly sales on shopping platforms push consumers to spend—even to stretch their budgets just to grab a lightning deal. Flash sales, “Only 2 left!” notifications, zero-down-payment EMIs—all these aren’t about need; they’re about manufactured urgency.

Marketers aren’t selling things anymore — they’re selling speed, scarcity, and impulse.

This is how they materialize Say’s Law of Market, which says, “Supply creates its own demand.” The constant barrage of marketing creates a desire we didn’t originally have.

Suddenly, you feel your phone needs an upgrade. Nothing’s really wrong with it — but that irresistible sale price convinces your brain otherwise. Your mind creates a requirement where none existed.

Robert Cialdini, in Influence, explains how scarcity, social proof, and FOMO (Fear of Missing Out) are tools deliberately used to bypass rational thinking. They don’t just influence you — they override you.

4. Financial Illiteracy and Mismanagement

Another big reason for such unmindful spending is that most of us lack financial literacy — especially the ability to distinguish clearly between a need and a want, or what truly qualifies as an asset (puts money in your pocket) versus a liability (takes money out).

Many people incorrectly perceive their residential homes or personal-use cars as assets when, in reality, these are liabilities that increase monthly expenses. This misunderstanding, when combined with poor spending habits, means that even when income increases, expenses tend to rise in parallel, preventing wealth accumulation.

People often believe that “more money will solve their problems” — but if poor spending patterns persist, it only compounds the issue.

The lack of financial literacy doesn’t just result in poor consumption choices — it also leads to flawed investment decisions. We keep accumulating wealth-draining ‘assets’ instead of building true income-generating assets that can move us forward financially.

 

5. Parkinson's Law: Expenses Rise with Income

This principle states that “expenses tend to rise in proportion to income.” As people earn more, their lifestyle expands — leading to better cars, bigger homes, pricier clothes, and luxurious holidays. This constant increase in expenses means income alone won’t create wealth. Any salary hike is often quickly offset by new liabilities. The result? A never-ending “rat race” where individuals work harder, yet don’t move forward financially — because their spending grows just as fast, if not faster.

Robert Kiyosaki, in his book ‘Rich Dad Poor Dad’, talks about the same trap — how money magnifies human behavior. “If your pattern is to spend everything you get, most likely an increase in cash will just result in an increase in spending.”

Your Own Brain Works Against You

Sometimes, you don’t need emotional or external triggers. Your own brain does the damage. These are internal biases that quietly push you toward poor money choices:

a. Mental Accounting and Valuing Money Differently 

People tend to mentally separate their money into different ‘buckets’, assigning varied significance to the same sum depending on how it was acquired or the effort involved. This often leads to irrational behaviour — like treating bonuses or winnings as ‘extra’ money meant for indulgence, rather than treating it with the same seriousness as salary.

Money received as a lottery win or a windfall bonus is often spent on luxury or riskier ventures instead of being invested in income-generating assets. This violates the core economic principle that money is fungible — ₹5000 is ₹5000, no matter where it comes from.

We treat money differently based on how we got it. Bonuses feel like ‘free’. Cashback? Easy to blow. Found ₹5000? Spent before the day ends.

But ₹5000 is ₹5000. Whether earned, gifted, or refunded — it has equal power to build wealth. How you treat it defines whether you grow rich or just stay busy spending.

b. Anchoring – The Fake Discount That Tricks Your Brain

This usually comes into play when you bargain for a product. The moment you throw a number, that becomes the anchor price — and any perceived loss or gain in the deal is compared to that figure.

“Price was ₹6,000, now ₹2,999.” You feel like you’ve saved ₹3,001.

But the real question is — did you need the product at all?

Anchoring bias sets a false reference point. Anything priced lower than that anchor starts to look like a deal, even if the product was never required in the first place.

It’s not a saving if you didn’t need it in the first place.

c. The Pain of Paying Has Disappeared

There was a time when we used to pay for everything in cash. Now we just swipe, scan, or tap.

Digital payments — UPI, credit cards, EMIs, BNPL — have removed the physical act of parting with money. The pain of paying is gone, so is the hesitation.

This makes us more extravagant. Especially with credit cards, due to mental accounting bias — we tend to treat ‘credit’ as someone else’s money, forgetting it’s just deferred repayment with interest. That’s leakage.

Prelec & Loewenstein (1998) found that people spend significantly more when paying digitally than with cash — because the pain is delayed or masked.

How to Fix

Overspending is a complex interplay of deep-seated emotional, cognitive, and social programming — one that encourages immediate gratification and herd behavior over long-term financial well-being.

To resist impulsive buying, always pause before you buy and ask, “Am I solving a real need or just a passing feeling?” If you aren’t sure, wait 24 hours. This simple delay allows emotional urges to cool off and lets rational thought step in. It often saves you from acting on impulse.

Then, define what success looks like to you. Is it material possessions? Or is it having control over your time and life — in other words, financial freedom?

Set your own financial benchmarks.

Another way to fix this is to make the purchase difficult. How?

Remove all shopping apps. Disable notifications. Even if you want something and add it to the cart — don’t check out immediately. Leave it for the next day.

Always choose ‘Pay on Delivery’, even if it costs ₹5–₹10 more. This makes the payment feel real and deliberate.

Try paying cash for non-essentials — it resets your habits.

Shift your mindset: every rupee is part of your financial engine. Don’t waste capital just because it feels ‘extra.’

A windfall gain, a bonus, or a gift isn’t for mindless spending — it’s a part of your capital base and should be used wisely.

To fight the temptation of offers, ask yourself: “Would I still buy this at full price — and without regret?”

Another useful trick, recommended by several Personal Finance experts: Ask yourself — “Can I buy two of the same thing?” If yes, buy one. If not, you probably shouldn’t buy at all.

Watch your mood when spending. Make a mental note — why did I buy this?

This simple habit helps you spot your emotional triggers — stress, boredom, ego, guilt — all of which drive emotional spending.

This is crucial because your “inner world creates your outer world.”

Your behavior around money is shaped by your subconscious financial blueprint and past conditioning.

Delete saved cards. Unsubscribe from sales emails. Use separate wallets for discretionary spends.

Every extra moment you take before spending saves more than just money.

Final Thought: This Is About Awareness, Not Guilt

I am not recommending you to cut back. I am recommending you to wake up and have a realistic budget. Above all a commitment to stick to that budget. 

When you know what’s driving your spending — emotions, pressure, mental biases — you gain back the power to manage your finances.

You’ll stop asking, 'Where did my money go?' and start saying, 'Every rupee has a purpose.' This comes from cultivating self-awareness, managing your thoughts and emotions.

The goal is to gain control over your time, which is considered the highest form of wealth and financial freedom and a significant predictor of happiness and peace of mind.

If this blog resonated with you, share it with someone who needs to take back control of their money. For more personal finance insights and one-on-one planning support, reach out to us at PennyCounts.

Suggested Reading:

1. Daniel Kahneman (2011) – Thinking, Fast and Slow
   
2. Richard H. Thaler & Cass R. Sunstein (2008) – Nudge: Improving Decisions About Health, Wealth, and Happiness
   
3. Dan Ariely (2008) – Predictably Irrational: The Hidden Forces That Shape Our Decisions
   
4. Robert B. Cialdini (2006) – Influence: The Psychology of Persuasion
   
5. Scott Rick, Cynthia Cryder, & George Loewenstein (2008) – Tightwads and Spendthrifts (Journal of Consumer Research)
   
6. Dražen Prelec & George Loewenstein (1998) – The Red and the Black: Mental Accounting of Savings and Debt
   
7. Robert T. Kiyosaki (1997) – Rich Dad Poor Dad
   
8. Morgan Housel (2020) – The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness "
   
9. Parag Parikh (2009) – Value Investing and Behavioral Finance: Insights into Indian Stock Market Realities
   
10. T. Harv Eker (2005) – Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth