Are you aware of retirement planning for your future?
Meera is 32 years old and has an average lifespan of 80 years. She currently has her current salary of 50,000 rupees, and she will retire at the age of 60. She is aiming for her monthly pension of 30,000 rupees after her retirement. How much do you think she should invest by the age of 60 to reach her investment goals?
Meera needs a corpus of 4.05 rupees to earn 30,000 rupees. Let’s assume a long-term rate of return of 12% and an inflation rate of 6% by the ages of 60 and 5. Based on these figures, she will have to invest 14,820 rupees monthly for the next 28 years. If all goes according to plan, Meera will enter a financially safe golden age. You can also use this retirement pension plans calculator to get numbers.
Life is unpredictable. Therefore, a retirement benefit plan is a prerequisite for ensuring the financial safety of your immediate dependents. Keep reading this blog for answers to your questions: Can you afford it?
Importance of Retirement Planning
Retirement planning promises better financial conditions for retired employees. Promote employee retention and acquisition: Severance pay is integral to an employee’s total compensation. This leads to more involvement and satisfaction of employees.
It reduces the amount of tax you incur on the annual income you invest in it. It allows you to defer or even avoid the taxes you incur on the revenue from your investment. It generates income and creates a compound interest effect that is not available in regular savings accounts.
Retirement planning has many essential benefits that help you grow your savings faster. Retirement pensions are long-term savings plans with tax cuts. Getting a tax deduction at retirement means that some of your money goes to the government as the tax goes into your retirement instead.
Best Retirement Plans in India
1. LIC Jeevan Akshay 6 Plan
This indemnity annuity plan is one of India’s best retirement plan schemes. You can purchase this plan by paying a hefty single premium. After purchasing the plan, you will start getting a pension. Some features of the plan are,
The minimum entry age is 30, and the maximum period is 85 years. You will get the pension or annuity payment either monthly, quarterly, half-yearly or yearly. No medical examination is needed. Minimum purchase price of Rs 1 lakh for offline distribution channels and Rs 1.50 lakh for online distribution channels.
2. Canara HSBC Life Insurance – Invest 4G Plan
Invest 4G is a Unit Linked Individual Life Insurance Savings Plan that you can tailor to your own goals and changing needs. This plan allows you total control over your money thanks to an unrivaled mix of Portfolio Management Options and flexibilities. It also includes Life Insurance to cover your family in the event of your untimely death.
You will get the Fund Value at maturity depending on the current NAVs. You can also take the Fund Value in periodic payments at maturity if you choose the Settlement Option.
3. HDFC Life Click2 Retirement Plan
If you are looking for the best retirement plans, then this online unit-linked plan helps you meet all your post-retirement needs and requirements.
It offers guaranteed vesting benefits and additional gains from the market. The minimum entry age is 18 years, and the maximum period is 65 years. The minimum maturity age is 45 years, and the maximum age is 75 years. You are eligible for tax benefits under Section 80C and Section 10(10A) of the Income Tax Act 1961.
4. ICICI Pru-Easy Retirement Plan
If the policyholder doesn’t get any regular income post their retirement, this plan helps them receive payment through equity investment. This plan generates good long-term returns and safeguards you from market volatility.
Your minimum premium amount will be Rs 48,000 per annum, but there is no maximum limit. You can choose your payment modes (Monthly, half-yearly and yearly payment). The minimum entry age is 35 years, and the maximum age is 70 years. The policy is offered for 10, 15, 20, 25, and 30 years. Under this plan, you are eligible for tax benefits on premiums.
5. Maxlife Guaranteed Lifetime Income Plan
By opting for this non-linked traditional annuity plan, you will get a regular flow of income after your retirement. As long as you and your spouse will alive, you will receive lifelong payments.
After the policyholder’s death, the policy’s purchase price is returned to the beneficiary. You may receive the payment amount monthly, quarterly, half-yearly or yearly. You get four annuity options to choose from.
6. Birla Sunlife Power Pension
This non-participating unit-linked plan will uplift your financial standing after your retirement. Policy term ranges from 5 – 30 years, subject to a maximum vesting age of 80 years. The minimum entry age is 25 years, and the maximum age is 70 years.
You are free to choose your policy premium amount option. You get the option to select the vesting date to have an accumulation period of 5 – 30 years. Based on risk appetite, you can select your risk profile.
What is Early Retirement Planning?
The pension is either a “defined contribution pension” in which a fixed amount is paid regularly or a “defined contribution pension” in which a fixed amount can be used for early retirement benefits. The term “pension plan” generally refers to the pension granted when an individual retires.
Early retirement probably needs to be planned well in advance from the day you start earning. Unlike others who plan to be late, they don’t have the flexibility to postpone their plans for a year or two. Losing each year only increases your burden to build a significant retirement corpus that can help you navigate your life after retirement.
The first step in retirement planning is calculating the body needed for a stress-free life after retirement. Inflation is an important consideration as it reduces the value of money over time, but another protracted concern is that it may not be exempt from all liability.
Wrapping It Up
The early pension plan is a system that provides income at the time of retirement when the income from work becomes unstable. In many cases, pension schemes require both the employer and the employee to pay the fund during employment to receive defined benefit benefits at retirement.
Early retirement requires careful retirement planning and, most importantly, proper investment. It’s essential to start early as it helps you make changes along the way as needed. If necessary, seek help from an expert to make sure you are heading for a wonderful retirement life.
Make sure to look out for the best retirement plan in India to secure your and your family’s future.