Categorized | Investment Insurance

ways to fund your retirement

Retirement is often looked as a second life to accomplish your desires. Go for retirement planning at an early age to enjoy a prosperous life even after retirement. While making retirement planning, you need to know your retirement needs and should be ready to look beyond your employer’s Pension plan. The following are different ways which can help you to boost funds on your retirement:

1.Public Provident Fund: Public provident fund is an excellent option for small investors and can provide multiple benefits. First, it serves as a secured means of investment for retirement income. Second, it calculates interest on compounded basis which makes you earn more. Third, it is one of the least risky investment options you can take. And finally, it avails you tax benefits. The payment made in favor of Provident fund provides tax rebates. Also, the income earned out of it is free from tax liability.

2.Life Insurance:Life insurance provides financial protection in the event of death or any unfortunate. However, there are certain life insurance plans which provide the option of retirement benefit. When the source of regular income ends, these provide you funds to maintain your lifestyle. This is an appropriate option for people who are not willing to take high risk.

3.Pension Plan: Pension plan is a special retirement  benefit plan which work like insurance. In such plans the investor can invest in whole or in equal installments payable for a period of time. At Maturity or on retirement, the retirees get the option of withdrawing lump sum amount or getting regular payments. There are various types of pension plan available in Indian market viz, Annuity certain, deferred annuity, immediate annuity, guaranteed period annuity and life annuity. The basic difference between all of them is based on the payment of premium, Term of pension plan, returns and beneficiaries.

4.Fixed deposit: Fixed deposits like everyone knows are the most secured means of investment for retirement income. The amount is invested on whole for a period of time at a very low rate of interest. Although the returns are guaranteed, these deposits do not provide any tax rebates.

5.NSC: National Saving Certificates, popularly known as NSC provide adequate amount of returns on no-risk. The rate of return is slightly higher than the rate of inflation. NSCs are tax free and can be bought by any adult citizen. These are long term saving options and can be brought from any post office branch in India.

6.New Pension Scheme: This is a simple pension plan that has combined benefits of different pension plan. In it, you can invest while you are working and can get returns at the time of retirement. Just like mutual funds, they provide diversification to your money invested. The money invested is divided in equity, bonds and other secured instruments in a fixed ratio so as to generate high returns. These can be part of a long term retirement planning since they lack liquidity.

7.Mutual Fund: Mutual funds are the most preferred means of investment. Through mutual funds a pool of savings of investors who wish to invest in stock market on a low Risk and professional assistance, are invested for high returns. These may provide steady income on retirement. This is because they work on a cautious approach which provides a diversified portfolio to generate returns. Though mutual funds are also risky, when invested at an early age they have proved to perform exceptionally.

8.Stock Market: Investment in stock market is a risky affair especially when you are new to the market. However, you can still choose it as it offers high returns. This can be the most liquid form of investment in your retirement planning.

The retirement age in India is sixty but there is no bar on the age to start planning for retirement. You can take a pension plan as early as on eighteen years of age. However, early birds will require an expert’s opinion for fruitful results.