Enter that golden phase of your life ever prepared, ever ready to march into with complete assurances about your finances. A retirement plan should be on your mind before you take a step into your ever ready and jubilant future. Retire gracefully rich.
What is Retirement Planning?
Retirement planning illustrates the different financial plans individuals use during their years of employment to safeguard so as to meet their ultimate goals of financial security on retirement. Making sturdy decisions about retirement is vital for the self employed and small business men too.
Is it the Right Time to Think of Retirement?
There’s no fixed old mindset for retirement planning, most of the younger generation would rather say it’s too early to plan for retirement, think of the present and live life and take steps as it comes. But as experts suggest day one of employment is the best time to start.
Just employed, there’s a lot to think about, how to increase ones status, how to enjoy what is earned. The changing trends in lifestyle, the growing cost of living and to save for retirement would naturally be an afterthought. The focus instead would be on transitional goals the basic necessity of a vehicle, house, marriage, family, etc. for most individuals thoughts for retirement follows at the end of the financial plans. In today’s work scenario one cannot predict what may happen.
Why to Think of Retirement Planning?
Most individuals between the ages of 20-30 years are heedless about financial awareness and planning, this does not mean that they have no knowledge of financial planning but they have inadequate awareness about the benefits of a planned goal,
The best time for empowering ones corpus and building the future is now at this young age. Allotting the surplus earnings in proper funds is a bright start, however, retirement planning should be a part where it should not be touched, pull the string only when earnings are stopped.
A permanent job then rest assured 12% of the basic salary and an equal addition by the employer goes into the Provident Fund account from day one. It is unavoidable rather a compulsion. A default tool for retirement saving which no employee can avoid. It’s only voluntary of how much more you wish to contribute towards the Employees Provident Fund.
Benefits of a Retirement Plan
- Investment in market linked plans will maximize the retirement corpus
- Tax benefits on investment
An employee is entitled to partake in his or her retirement plan of the employer when he or she adheres to certain conditions in the plan as declared.
|Entry Limit||Policy Term||Premium Amount (Annually)||Sum Assured|
|BSLI SP Plan||25 years to 70 years||80 year term||—||—|
|LIC JeevanAkshay||30 years to 85 years||—||—||Rs. 500 monthly|
|Bajaj Allianz Retirement Plan||30 years to 73 years||7 years to 30 years||Rs. 15, 000 is the minimum limit||Rs. 2,04,841/-|
|HDFC Life Pension||35 years to 65 years||10 years to 20 years||—||Subject to this be underwritten|
|Reliance Pension Plan||8 years to 65 years||10 years to 30 years||Rs. 24, 000/-||—|
Four rules to live by that will help you change your future
- Find out the corpus for comfort at retirement: The serious thing to remember is the best decision and a crucial one about a retirement corpus. An imbalanced figure can be very expensive in the long run. Determine the amount required each year to live comfortably through retired life.
- Increase Investment as income grows where it will come from: Inflation is the major challenge it eats up the purse. So every extra earnings can be saved in pension plans, medical insurances or even by increasing the EPF contribution. An advice with a reputed financial planner will provide and help decide the best solutions and options for retirement goals.
- Don’t touch the corpus before retirement: As long as job security is stable do not touch the retirement corpus but rather take a loan. These savings are going to be the bare minimum security for retired life.
- Don’t outlive the savings: Try to avoid overspending other than what is required. Self-employed may opt for mutual funds, by choosing the ones that would suit the risk and age. However, discipline should be maintained to certify the savings of the given sum on a regular basis.
In a nutshell, make sure a decision on how much corpus is needed by the time of retirement. Take into consideration inflation while make a decision on the corpus sum. All condenses to the yearly expenditure, inflation expected over the years and standard of living expected post retirement.