We all hear how important retirement planning is, but most of us don’t do anything at all to plan. We say we want to save for the future, but then we stick some thousand-ish savings in savings and call it a day. Most of us are guilty of this until we get down to realize how much we need for a good life.
It’s eye-opening to realize that you needed to start saving more if you wanted to retire comfortably. Of course, most people don’t want to spend the rest of their lives working so they have a better option — use a pension plan calculator and determine how big of a nest egg you will need as well as figure out how much monthly income you can expect.
Maybe there is a hobby you’ve never pursued or a travel destination that is just too good to miss. Whatever it is, now would be the time to plan for it. The best thing about this new innings is that you don’t need to worry about money as much as when you were younger since your bills are gone and your financial responsibilities are over (for now).
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Why Retirement Planning is Necessary for Life?
1. Fulfilling Life Goals
Retirement is just like a lease of life. Not only does it allow you to fulfil your lifelong dreams such as travelling to different places, learning new skills, or exploring a passion that has long been stored away because of your pre-existing commitments, but it also gives you the time in which you can settle down and spend time with loved ones. Whether you continue working after your retirement depends on how well prepared for retirement you were.
2. Beating Inflation
In India, the cost of goods and services has been increasing. This has an impact on the standard of living. If you don’t plan for retirement, there is a chance that your money will decline in value as inflation takes its toll. By investing today in the best pension plan, you are taking measures to invest ahead and grow your investments so they keep up with inflation while strategies like contributions and tax benefits may also help protect your savings.
3. Creating a Legacy
You want to ensure that your family is taken care of even after you are no longer around. Planning helps you make sure that your children’s and grandchildren’s needs will be met, even in your absence after you have passed on. You can do this by making sure that the financial hardship that may accompany a loss of a primary income stream is reduced as much as possible because let’s face it – life without one’s parents, spouse, or loved ones can be very difficult emotionally and financially too.
4. Enhancing Living Standards
You want your current lifestyle to continue beyond retirement. Your monthly income isn’t enough to cover the expenses you will have in the future. Rather than taking a big financial risk, it might be better for when you can get a more regular income after retirement to help with your day-to-day spending and maintain a proper living standard.
5. Preparing for Future
You may have to save more money over time than you would have expected. According to national statistics, the average life expectancy today is much longer than 60 years ago; but this also means that you’ll need to make all of your arrangements for a retirement income that will last much longer in comparison.
6. Arrangement for Emergency
Having bad health can ruin your finances. So, it’s good to make sure that you save money throughout your life in case of any random medical emergency. Also, having the best pension plan in place can give you an emergency fund that will help you manage your finances and get the best possible treatment when ill.
Best Pension Plans Available in India
1. Canara HSBC Oriental Bank Of Commerce Life Insurance – Pension4Life Plan
Protect your loved ones and yourself against financial difficulties in the future by investing in this pension option. Payments that you can rely on to cover your monthly bill expenses are available, no matter how old you are or how difficult things become as a result of a deteriorating health condition.
The plan offers the option of choosing an annuity to receive either immediately or determined at a future date and that can be increased or decreased based on individual circumstances. Furthermore, in case of the annuity holder’s death, guaranteed return of purchase price.
At the same time, it should also be noted that by changing the timing and number of payments (yearly, half-yearly, quarterly, or monthly) you may optimize the amount for which you opt.
2. LIC Jeevan Nidhi Plan
The LIC Jeevan Nidhi Plan is a pension product with profits. The principal amount contributed to this policy will earn interest and the accumulated sum at maturity is payable when the policyholder has survived until that time.
Premiums paid are exempt under Section 80CCC of the Income Tax Act. For the first five years, the policyholder will receive guaranteed additions per thousand Sum Assured every year as long as they make their premium payments on time and don’t cancel or alter coverage before its maturity.
3. ICICI Pru – Easy Retirement
ICICI Prudential Easy Retirement Plan is a unique retirement plan that aims to help people get a steady stream of income after they finish working. Retirees can receive an agreed-upon amount monthly while they live out their golden years, regardless of what the market happens to do.
The minimum premium rate amounts to Rs. 48000 and the maximum limit, there’s none to it. One can pay anytime, be it monthly, half-yearly, or yearly, based on their preferences.
Final Words
It cannot be emphasized more that a pension plan is certainly one of the most important financial investments you can make in your lifetime. To make the process of choosing the best pension plan easier, you may consider using a pension plan calculator and determine exactly how much you need for a comfortable retired life.
