help plan for retirement and offer the security of insurance.
You have been working hard to provide yourself and your family a good life. You have saved some money and you think that it is sufficient for future and to maintain the same standard of living as you are doing now. However, the reality may be far from the truth. Rising costs of commodities have pushed up the cost of living, and it seems to only go upwards.
The primary reason people go through difficult situations post retirement is not lack of money but lack of proper planning. With increased life expectancy and a fixed retirement age, retirement planning is something really vital that should be imbibed in your mind from a young age.
As part of good planning, you must know well what plan you are buying. Here are the most popular types of retirement plans in India:
You can purchase this plan for a lump sum amount in return for fixed payments throughout your life. The three types are:
Under this plan, you will be paid a regular amount throughout your life. In case of death of the person, the nominee will receive the Maturity amount and Bonus under the “return of purchase plan” option.
Under this plan, your nominee will be paid Pension for a certain number of fixed years even if you die before this time. In case you survive, you will be paid pension for life.
In this case, you will be paid a fixed amount by the insurance company for a certain number of years.
This plan is ideal for a person who is still in a job and doesn’t need pension for a certain number of years. Under this plan, the accumulated amount of the sum assured, bonuses etc. are then invested to generate regular income.
After you have taken the decision to start investing, you may be thinking about how much to invest. There are various factors that influence this decision.
The most important factor is without doubt the total amount you want to save. The more the amount more comfortable will be your life after retirement.
If you start saving at an early age, the more money you will have after your retirement age. Also, you must decide when you want to retire and save accordingly.
More your life expectancy, greater will be the amount you will need in your retirement corpus. You should choose your amount taking into consideration your health condition and family health history.
The rate of return offered by your investment scheme will determine how much is present in your retirement corpus
You must not depend only on your heritage and inheritance to meet your retirement needs. Any untoward incident in your family could cost you a large amount.
Inflation will determine to a great extent what your purchasing power will be in future. You must therefore take this into account while determining your retirement amount.
You must not procrastinate under any circumstance when it comes to retirement planning. It may not be easy to compensate for the initial lost years by investing higher amounts later in life. Therefore, decide early and invest in the best pension plan that meets your needs.