Plan your retirement right from the time you work

Posted by ankita on May 26th, 2017

Retirement is meant to be the most relaxingdays ofyour life. You’re fascinated with the thought of doing things that you couldn’t do when you worked hard to earn money. You want to travel, build a farmhouse, start a restaurant,etc.  However, these wishes can be fulfilled if you have a certain corpus at the time of retirement. Therefore, financial experts suggest investing money in an investment plan to generate a source of income in your old days. However, most people get worried on setting aside the money for retirement plan as they feel their regular income source will get interrupted. Also, they feel retirementdays are far away and they have ample of time to invest from middle age.

But, this is a completely wrong approach. Planning for retiring days should be the most crucial part of your finances. Once your income source comes at a standstill you won’t be able to divert money for retirement fund resources.

While there are various types of retirement plans, one of the best plans are retirement pension plan offered by insurance companies. These plans provide a steady flow of income post retirement. The best part of this plan is instead of providing a lump sum amount after maturity, as most insurance schemes do, this plan will provide a stream of payouts post maturity until the policyholder is alive.

Retirement pension plan comes with two separate variations. The first one is termed as immediate annuity plan under which you pay a lump sum amount in a single premium option and after fixing the annuity rates, companies will start making annuity payouts. It continues until the policyholder is alive. The second one is the deferred annuity plan where the policyholder can make premium payment in installments to slowly build a corpus while waiting for the pension to begin. Since, retirement pension plans provide payments in installments and not in one lump sum, it ensures that the money received will actually be used for retirement funding and not for unnecessary expenses occurred.

Experts say most people working in India don’t fundtheir savings towards retirement and believe that current savings will be enough to sustain the retirement needs. However, the situation is changing rapidly, especially in the cities where there is an increasing trend of nuclear families. This will require financial independence post retirement. Also, due to better healthcare amenities, the average life expectancy has now gone upto 70--90 years. Inflation is again a crucial element to counter during retirement days. All this can be done with a sound retirement pension plan.  Through systematic retirement planning, one can maintain the standard post-retirement lifestyle, fulfill their dream goals, beat the inflation costs and also have financial independence.  A small amount can be contributed on a monthly basis. Companies invest your money is various bonds, securities and equity based funds that will help you yield good profits over the years.  By the time an individual reaches retirement age, your money will be nested well for good payouts.

So, fulfill your goal in future, by investing in sound Retirement Planningplan today!