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Where should a retiree invest his surplus money?

Dhirendra Kumar suggests investment options for a retiree

My father, a retired person, has a surplus of Rs 20,000-25,000 from his pension every month and he wants to utilise this money. Where should he invest in?
-Anonymous

I understand that your father has a pension and he is able to save Rs 20,000-25,000 from it. So, this amount can be utilised as long- to medium-term investment. I would want to provide you with two aspects of this. If his pension income is taxable, then he can still invest in tax-saving funds and save up to Rs 1.5 lakh on his income and reduce his tax bill. So, if he is a taxpayer based on his pension income, his first option should be investing Rs 1.5 lakh in a tax-saving fund.

If that is not the case, then all the money should be invested in an aggressive hybrid fund and only in the form of SIP. So, that is it - tax-saving or an aggressive hybrid fund.