Have you ever wondered how much money will you need for a successful retirement? Opinions differ widely. Financial experts say you need 75-85 percent of your re-retirement income for a happy retired life. You may be entitled to a monthly pension, if you were in a government job. Some public sector enterprise also has a pension scheme. Pension in government job is usually calculated on the average basic pay drawn by the employee during the last 10 months of service. Many companies have annuity and pension funds managed by the Life Insurance Corporation of India and other insurance companies. You may be entitled to receive a regular monthly pension, if you were a member of such a fund. Family pension to the spouse in case of the retiree’s death is also admissible in government jobs.

Gratuity is a one-time lump sum benefit admissible to employees in government service and companies registered under the factories Act. A minimum five years qualifying service is required to receive retirement gratuity, which is calculated at the rate of one quarter of the monthly basic pay plus dearness allowance last drawn before retirement, for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity, while maximum gratuity payable is 16.5 times the basic pay, limited to Rs 3.5 lakh. In case of government employees, the provident fund is called the General Provident Fund, in which an employee subscribes a minimum of six percent of his salary towards the fund, which goes on accumulating over his service period. In case of employees of companies under the Factories Act, the Contributory Provident Fund scheme is applicable. In the CPF scheme, is addition to the employee’s contribution, which is equal to one month’s salary in a year, the employee also contributes an equal amount to the fund, which gets accumulated funds in both the schemes attract a handsome annual interest, which at present is 8.5 percent.

Personal savings may include bank deposits, insurance policies etc. For those of you who financially literate and active   investors,   a combination   of low   risk investments   such as  post office savings scheme along with   higher   growth investments  such  as  well performing   diversified equity  mutual   funds   and stocks is recommended. Following are the options available:

1. Post Office Savings Products: The postal saving schemes continue to one of the most popular income instruments in India. Since these are packed by sovereign are often known as zero risk investments. However, they have lock in periods varying from one to 15 years. Schemes such as PPF have a low minimum investment requirement of Rs 500 per annum. PPF and NSC also qualify for tax deductions. Nearly all post office schemes give returns of about 8 percent.

2. Mutual Funds: In order to earn high returns you need to invest in equity. However, while investing in equity keep in mind that the stock market is purely for the long term investor. If you wish to invest in equity but are not confident of your stock selection, invest through mutual funds.