Pension Plans

help plan for retirement and offer the security of insurance.

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Sure Shot Tips For Smart Retiring

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Retirement age can be one of the best phases of your life, if you plan for it well in advance. Retirement planning is something that should be on the top of your mind right at the time when you start earning. The earlier you start the easier it is to plan and more effective are the planning results. Basically, your retirement planning should be all encompassing and account for the following financial liabilities that may arise during retirement.

1) A Health Cover

We all know how rapidly healthcare expenses are growing. If you have a health cover sponsored by employer be aware that in most cases the same is discontinued when you retire. It can so happen that if you do not have adequate health cover post retirement, a medical Hospitalization can rob you off your retirement savings. Hence, it is all the more important to own a Health Insurance post retirement. The health care cover that you buy should adequately cover not only your health Risk but also for those who are likely to be dependent on you post retirement.

2) Invest in a Pension Plan

Choosing to invest in a pension plan is the first right step in the direction of effective retirement planning. The earlier you take the decision to invest in a pension Policy the better it is for your retirement planning. There are variety of pension plans to choose from and you should carefully understand the pros and cons of each. You can either invest in a traditional pension policy, a unit linked pension plan or the National Pension Scheme. A traditional pension plan has a conservative approach to retirement planning as 100% of investment goes into debt. National Pension Scheme is balanced and invests in a mix of debt and equity, and it varies the mix with time to balance the risk and reward. If you want your retirement funds to grow aggressively you can choose a unit linked pension fund instead which allows you to invest 100% of your retirement savings into equity.

3) Structuring Post Retirement Cash Flow

If you have the desired retirement corpus, the next important challenge for you is to ensure that the same is translated into a healthy regular income which will help you not only maintain a good quality of life but also deal with some unexpected expenses. Most retirees would want that the annuities last for their life time and they do not have to compromise on their regular expenses. Depending upon how you visualize your cash flow for the future you can purchase an Annuity that best suits your specific needs. If you think your expenses are likely to be higher in the initial years post retirement you can structure your annuity payments accordingly.

4) Pay off all Your Debt

Insurance policies will provide you Risk Cover from uncertainties related to health and life but there is no cover to save you from financial distress that happens owing to lack of financial discipline. You cannot afford to have unpaid liabilities when you retire. You should have paid off liabilities like home loan or car loan much before you retire. Remember a retirement corpus that you gather by investing in a pension plan or other investment avenues is intended to take care of your living expenses post retirement and not for repaying accumulated debts over time.