Why do We Need Pension Plans in India
- DetailsWritten by PolicyBazaar -
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Updated date : 08 November 2019
Every individual works very hard and make lot of sacrifices in order to make a secured future. We do keep tracks of our finances during our work life span and focus on making investments that will help to make our future secured. The important constituents that make our future secured and worry free is the availability of finance after our retirement. Retirement is generally the time when people want to do things which they never were able to do like spending quality time at their far house, going on holidays which are not imaginable without proper retirement planning. Pension plans or retirement plans are the only lifeline that can ensure you maintain high standards of living along with fulfilling your desires.
Pension Plans provide you with financial safety so that when your professional income starts to recede, you can still live with pride without bargaining on your living standards. Pension plans act as a tool to invest regularly during your work life span and returns you your investment in lump sum at your retirement along with annuity income which is provided in regular intervals.
An individual must make proper assessment of their finances and must realize that starting retirement planning at the early age makes more sense than starting later on in your life. Pension plans can help build you corpus over the time which you can utilize to fulfill your dreams. Starting pension planning early in your life is even easier as you have lesser responsibilities to handle plus you have very few liabilities to meet. Further, starting pension planning early can benefit you as you will be able to reap compounding benefits for more time, hence, your corpus will be more.
In our country like India where government does not provide any social security like western countries, it becomes even more crucial to have pension plans in place to meet any contingencies in the future. It will enhance your resistance power after the retirement. These reasons justify enough that it is very crucial to make pension planning well ahead on time. There are some factors which must be considered by an individual while planning for their retirement and pension like you must evaluate how much income or corpus you require in order to lead a satisfied life after your retirement. You should consider medical costs and lifestyle needs as well. Further, you must start investing in your pension plans at the right age and must allocate your money smartly in the plan which must be capable of fulfilling your desires.
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