It’s nice to live in the present but it is also very important that we make our future safe. Everybody needs to stop working after they reach a certain age. Retirement is not an easy decision but it is a certainty. Retirement planning is a must for everyone. To have enough money to spend a good retired life, it is important to start working on the retirement plan before it is too late. It gives you an opportunity to retire knowing that your future is safe. It is wise to start making arrangements for your retirement from the very first day of your income.
It is very important to start saving early for retirement. An early investment will return you enough to make post retirement days comfortable. But before you start savings you need a plan. Once you have a plan it becomes essential to revise it completely. You may find points that can be changed and things that should be added. Your ad visor can suggest you a particular lifestyle which can help you to save more. Once you have everything set start living according to the plan. Your savings and investments should continue according to the plans and you should never spoil that for any reason. If you fall into financial troubles, keep your hands off the retirement savings. That saving will be your only support after retirement.
An employee in case of a government job in India was offered retirement benefits by his company at the time of retirement. It is important to have complete knowledge about retirement benefits so as to plan for the future. These benefits are taxable so knowing about them is essential to calculate the tax calculations.
Following are some of the retirement benefits entertained by the Government or PSU employees:
- Pension plan: After the retirement, the company offers the retired person a life long income which is known as pension.
- Gratuity: Gratuity is that component of the salary which is offered by the employer to the employee for expressing gratitude in return of the services he is rendering for the company. Gratuity is paid in one lumpsum upon retirement while leaving the job. It is a deffered Annuity plan.
- Leave Encasement: Every employee is entitled to a specific number of leaves. Some of these leaves gets carry forward year after year. These leaves can be encashed while leaving a job or on retirement.
- Voluntary Retirement Compensation: Voluntary retirement compensation refers to the compensation which an employee receives on retiring voluntarily or on termination of services. There may be circumstances where the employee may have to leave his job before his tenure in this case he may receive a lump sum amount of money for the period of his service which is left.
Following are few of the types of pension plans
in India available for private sector employees:
- Deferred Annuity Plan: In case of a Deferred Annuity plan the Policyholder decides a time period when he wants the Pension hence the pension is not paid immediately infact deferred for a period of time. In case the policyholder survives the term, then this amount which is paid in a lump sum is invested in some plan such as the LIC Jeevan vritti Plan etc.
- Immediate Annuity Plan: In case of an immediate annuity plan the pension is paid at regular intervals and the money received is also pre decided. Hence the person under this plan enjoys receipt of fixed amounts throughout his life.
- Annuity Certain: The annuity certain plan is somewhat similar to an immediate annuity plan except here the insurance company pays a fixed amount of payment for a limited number of years which is already pre decided.
- Guaranteed Period Annuity: In case of a guaranteed period annuity plan the insurance company pays a fixed amount as pension for a fixed number of years which has been pre decided. If the Policy holder does not survive the entire Term of the policy still the policy is liable to pay the amount to the nominee.