All that You Should Know About Retirement Planning

The retirement phase is an important part of every working professional’s life. The time you hear the word ‘retirement’ all you imagine is relaxation and saying goodbye to the eight to nine hours shift.
But, what if you have not planned for this golden phase of life?

Read more
Best Pension Options
  • Get Tax Free Pension For Life

  • Flexibility to withdraw fund value any time

  • Guaranteed Tax Savings

    Under Sec 80 C & 10(10D)

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Invest ₹6,000/month & Get Tax Free Monthly Pension of ₹60,000

Get the best returns & make the most of your Golden years

View Plans
Please wait. We Are Processing..
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp

Remember, the eight to nine working hours shift might come to an end but the everyday expenses will always be around. Therefore, it becomes important to plan for retirement.

Yes, retirement planning is important.  People with a job need to plan out their retirement so that they enjoy their life post-retirement and not worry about the expenses.

Lets’ Get Started!

The average age of a person starting with a job varies from 24 years to 26 years. Before you start planning your retirement, you need to understand your financial standing that includes your income, commitments, expenditure and debts or any liabilities. While you plan for retirement, take into account your health as well.

How to Plan Retirement?

It is advised that you should start planning retirement right from the time you start earning. When you start investing in the retirement fund at an early stage, it helps you to create a corpus for your retirement.  This will reduce the financial burden and let you enjoy the post-retirement with much ease. People usually take time to start a retirement plan thinking it is far away. And some even think it is not of much importance. However, it is a better idea to start investing in the early-stage when you have less financial responsibilities.

Decide an Investment Horizon

To decide the investment outlook, you need to have an idea that at what age you would retire. Then you calculate the number of years left for retirement. After that, you can decide until what age you want your expenses to hold.

For example: If you’re 26 years old looking forward to retiring at 50 and want to plan your expenses until you are 75 years old, so the horizon of your investment will be of 24 years and you’ll have to make sure that the amount you collect in these 24 years would be enough until you’re 75 years old.

Evaluate Expenditure

After this, you’ll have to evaluate your expenditure. You’ll have to plan things carefully and keep track of the everyday expenditures. The expenditure will include household expenses, the education fee of the children, if any and other miscellaneous expenses like transport charges, EMIs and so forth. 

There is a fund for retirement known as a contingency fund. It helps with medical expenses during retirement. In case you are not covered under health insurance then the medical expenses can be heavy on the pockets. Hence it is advised to have a fund for medical emergencies as well.

Don’t Use Retirement Funds

You never know what kind of emergency you get to face at any point in time. Life is uncertain and a common mistake that you would tend to make is using the fund, which you have kept aside for the retirement phase. 

At the risk of sounding like Arnab Goswami NEVER, EVER, EVER do this. Plan out the expenses and accordingly use the savings. 

Understanding the Types of Retirement/Pension Plans

There are different types of retirement plans that you can choose from as listed below:

Deferred Annuity

A deferred annuity scheme is a pension plan that allows the annuitant to collect a sum either by paying a premium regularly or by paying at once. When the policy tenure is completed, the pension is given to the annuitant. It not only offers benefits to the annuitant but also offers tax benefits that are subject to change as per the prevailing tax laws. In the deferred annuity, one-third amount of the whole sum is free of tax and two-third of the whole sum is taxable. In the deferred annuity plan, the amount is locked and cannot be withdrawn no matter what.

Immediate Annuity

As the name suggests, under this scheme, the pension is given immediately. The annuitant has to pay a lump-sum amount and the pension is provided instantly based on the amount invested by the annuitant. The annuitant has options to choose from for a range of annuity options. The nominee gets the amount in case the annuitant dies during the policy tenure.

National Pension Scheme

The National Pension Scheme was launched in 2004 by the Pension Fund Regulatory and Development Authority of India (PFRDA). In the initial period, this scheme was applicable only for the government employees but later in 2009; it was opened for all Indian citizens. Under this scheme, the beneficiary can withdraw only 60% of the total invested amount and the rest 40% will be used for purchasing annuities.

This scheme was introduced to safeguard the financial future of the people after they retire. NPS is popular due to its tax-saving benefits.

Pension Funds

It is a type of pension scheme that continues for a long period. The return offered within the pension funds is comparatively better upon maturity. The PFRDA has allowed 6 companies to manage the pension funds as fund managers. The pension fund scheme offers better returns when compared with others upon maturity and it remains active for a specific period. The pension funds insurance providers intend to empower the insured to pull back the annuity sum at the hour of aggregation stage. The pension funds will provide financial protection when you have stopped earning and need not compromise on the lifestyle.

Wrapping it Up

Planning for your retirement at an early age is the best you can do for the golden years of life. Retirement planning will let you live a stress-free life even. Choose the retirement plan that fulfils your need and gives you peace of mind. 

In the times we are living in today, it is recommended to buy a pension plan online offered by the different insurance companies in India.

Written By: PolicyBazaar - Updated: 19 August 2021
Pension Plans
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Retirement Plans
Monthly Pension Plans
Sign up for newsletter
Sign up our newsletter and get email about Pension Plans.
Higher Returns Than Fixed Deposit

Pension plans articles

Recent Articles
Popular Articles
Future Value of Annuity Due Formula

22 Nov 2021

The future value of an annuity due is the value of consolidated...
Read more
Axis NPS Calculator

18 Nov 2021

Every individual requires old age security and financial...
Read more
Post Office NPS Calculator

18 Nov 2021

National Pension System is a scheme launched by the Government...
Read more
SBI NPS Calculator

18 Nov 2021

One of the most renowned schemes launched by the Government of...
Read more
ICICI NPS Calculator

12 Nov 2021

NPS or National Pension Scheme is a scheme launched by the...
Read more
NPS Calculator: National Pension Scheme Calculator Online
National Pension Scheme Calculator is an online tool, which allows the individual to calculate the estimated...
Read more
National Pension Scheme (NPS)
National Pension Scheme (NPS) is an investment cum pension plan launched by the Indian Government. This scheme is...
Read more
Saral Pension Yojana
In India, there are various individual immediate annuity products offered by life insurance companies. These...
Read more
LIC Senior Citizen Pension Scheme
Post demonetization the banks are cutting down the interest rates on fixed deposits. Hence, to safeguard the...
Read more
Top Pension Plans in India
Pension plans are one of the most sought-after investment options that have gained huge popularity over the...
Read more
Download the Policybazaar app
to manage all your insurance needs.