Tips to Buy the Right Retirement Plan
Planning for a financially secure retirement can be a challenge if you haven’t started saving up, yet. As you need to build a sufficient corpus for post-retirement, you might invest in a pension plan without much thought. However, to make the most of your money and have a stress-free retirement, you must select a suitable retirement plan that satisfies your needs. So, here are some tips to help you pick the right retirement plan and avoid financial shortfalls in the future.
- Analyse your financial situation
As you have begun considering a retirement policy, the first step towards it is to understand your financial condition. By purchasing a pension plan, you would have to set aside some amount as a monthly premium. Therefore, you would need to give up on some additional secondary expenses to start saving up for retirement. In case you do not have any savings, then it is recommended to create a financial roadmap towards your long-term goals. Even small steps taken today can help you meet future plans and have a stress-free retirement without any financial worries.
- Make retirement goals based on lifestyle
Many retirees would prefer to continue with their current lifestyle even after they turn 60. In case your plans consist of vacationing and exploring places that you couldn’t as a salaried individual, then you need to save up accordingly. The financial requirements for living a simple and comfortable life would be different to the one consisting of travelling the world. Thus, you must calculate the various expenses including the cost of healthcare, savings for your family and more to get the right estimate. Use the online retirement calculator to help you plan better and accumulate the right corpus.
- Begin investing early
Starting to save up from your retirement in your early 20s may sound absurd but it’s not. In order to care for your family and manage your current lifestyle without a steady income can be tough. By investing in lucrative retirement plans available in India early in life, you can get a head start to save up enough. In case you start with just 10 years until your retirement, it would be difficult to accumulate a sufficient corpus. In your early 20s, you won’t have many financial responsibilities, thus, making it easier to choose a high sum assured plan. It is recommended to begin investing towards your retirement as soon as you start earning.
- Consider investments with tax benefits
Numerous pension plans enable you to save up on taxes and enjoy your retirement life completely. So, you not only end up building a retirement corpus for the long-term but also invest in a tax-saving instrument. Under Section 80C of the Income Tax Act, 1961, you can claim the contributions made towards a pension plan. This deduction can be claimed for buying a plan or renewing an existing policy. A maximum cap of INR 1.5 lakh is applicable to the contribution made. Thus, you can claim a sizable amount for tax savings and save up a higher sum for post-retirement.
- Get professional help
In case you aren’t sure regarding your retirement planning, it is best to get a financial advisor on board. With professional help, you can ensure your finances are on track along with your future goals. On learning about your savings and retirement plans, the advisor shall recommend a suitable plan of action to make the most of your investments.
With this, you must have learnt what is a life insurance retirement plan and some tips to help you pick the right one. To understand how much savings you should dedicate towards your retirement corpus, head over to the online retirement calculator!