People think that retirement is the end of the road. But in truth, it’s not. It is the beginning of a new highway. It is an opportunity to take new paths, go on vacations, and do the things that you always wanted to do in life. While planning all this is fun, it is extremely important that you have enough resources by the time you retire to make your golden year plans a reality.
This is where retirement plans come in. By investing in the best retirement plans, you can not only get the life you deserve but also protect your financial future against uncertainties that may arise during retirement. These plans are one of the most sought-after investment options and have gained huge popularity.
In today’s hectic work culture, time flies swiftly. It may feel like it was only yesterday that you were born, and it’s only tomorrow you’re going to retire. That is why it is crucial to plan and act responsibly today to secure your future. In this article, we will talk about some of the best retirement plans available today.
Key Takeaways
- Retirement plans can help build a significant corpus throughout your life to ensure a permanent source of income after retirement.
- Investors need to pay a premium regularly. The premiums are accumulated in a fund of your choice.
- Buying one of the best retirement plans can fulfil the lack of pension benefits.
What are Retirement Plans & How Do They Work?
Retirement is an important phase of our lives that we all are going to experience at some point in time. For a smooth and hassle-free post-retirement, you need to start planning at an early age. The best retirement plans can help build a significant corpus throughout your life to ensure a permanent source of income.
The primary goal of investing in a retirement plan is to have a stable income and a fallback option in case the savings fall short. Now that we have a basic understanding of what retirement plans are, it is time to talk about how they work.
Just like any other investment plan, you need to pay a premium regularly. The premiums are accumulated in a fund of your choice, which generally lasts for a fixed period of time. When the plan reaches maturity, you will be eligible to receive the policy benefits, which can be done in the following three ways: –
- Withdraw the total amount in one go.
- Purchase an annuity plan.
- Partially withdraw the benefits and use the remaining amount to invest in an annuity plan.
Importance of Retirement Plans in 2023
In today’s stressful modern lifestyle, there is barely any time to plan the future and give a conscious thought about life after retirement. If you pause a little and understand the possible future expenses based on your current lifestyle, you will realize the need for investing in one of the best retirement investment plans.
Here are some key reasons to invest in the best retirement fund: –
Financial Independence
Being financially independent means that you can continue living your current life even if you leave your job today. This is only possible if you have other sources of income. Investing in the best retirement plans can help provide you with a permanent source of income after retirement and ensure financial independence.
Rising Inflation
You, as an investor, must take into account the rising inflation. It is a vital aspect to consider when planning for your retirement. If you are not able to keep up with the rising costs, you may have to compromise on your standard of living. With the best retirement savings plan, you will not have to give up your current lifestyle.
Takes Care of Medical Emergencies
Healthcare costs are an essential factor to consider while planning for your retirement. Medical expenses these days are increasing at an alarming rate. While other financial requirements may be negotiable, health must not be compromised.
Lack of Social Retirement Benefit
Not every individual has the privilege of pension benefits. Although pensions and employee provident funds are there, they may not be sufficient to fulfil your retirement objectives. This is why investing in one of the best retirement plans is essential.
Did You Know?
Only 7.4% of the working population in India is covered under a retirement plan.
Best Retirement Plans
A retirement plan can help individuals secure themselves financially by saving a certain amount regularly. These funds can be used to fulfil your retirement objectives as well as mitigate the unexpected expenses arising due to an emergency. Be it a health emergency or sponsor for a trip abroad, the best retirement plans come as a boon.
There are many retirement plans where you can park your money and easily secure your golden years. Here are some of the best retirement plans available: –
LIC Jeevan Akshay 6 Plan
It is one of the best retirement plans in India, which you can buy by paying only a single lump-sum premium. The LIC Pension Plan can be a great choice for investors who need an immediate annuity. You can avail of the benefits of this plan immediately after purchasing it. The minimum investment required is Rs. 1 lakh in case of offline channels of distribution, and it is Rs. 1.5 lakh for online distribution channels. Another important thing to note is that the minimum age required is 30 years, and the maximum is 85 years.
Aditya Birla Sun Life Empower Pension Plan
This is a Unit Linked non-participating retirement plan that can help you do the savings and build a significant corpus for your life after retirement. Since this plan is a unit-linked policy, a part of the premium paid is contributed towards market securities such as equity and debts to create high returns on the investment. The entry age for this policy is 25 years, and the maximum is 70 years. Since this is a deferred annuity plan, the accumulation period of this plan is between 5 to 30 years.
Bajaj Allianz Pension Guarantee
This is one of the best retirement plans that offer guaranteed regular income post-retirement. Bajaj Allianz Pension Guarantee is an immediate annuity plan and, therefore, comes with a single premium payment option. The minimum age required to enter this plan is 37 years, and the maximum age is 80 years.
HDFC Life – Click to Retirement
HDFC Life – Click to Retire is an online Unit-linked insurance policy that offers market-linked returns at minimum premium rates. This way, the HDFC Life plan provides a guarantee to meet all your post-retirement needs. This plan helps secure the retirement of the policyholder with a guaranteed maturity benefit.
ICICI Pru Easy Retirement
ICICI Pru Easy Retirement Plan is one of the best retirement plans in the equity category. This plan enables an individual to get a regular income after retirement by investing in the financial markets. The returns generated from this plan can provide protection against the volatility of the market. The policyholder has the flexibility to select between monthly, yearly, or half-yearly premium modes. The minimum premium that one can pay for this plan is Rs. 48,000 per year without any upper limit.
LIC Jeevan Nidhi Plan
Under a LIC Jeevan Nidhi Plan, the accumulated amount is used for generating a pension according to your survival after the completion of the policy tenure. It is a deferred annuity plan that provides guaranteed profit to the policyholder and helps secure your financial future in your golden years. The premium paid toward this plan is eligible for tax deductions under section 80CCC of the Income Tax Act, 1961.
Word to Remember
Immediate Annuity
It is the most basic type of annuity where one makes a lump-sum contribution to kickstart immediate pay-outs from the retirement plans.
Conclusion
Retirement is the longest coffee break in one’s life, so make sure to enjoy this coffee. And the best way to do that is to invest in one of the best retirement plans. You can select any plan as per your requirement to safeguard your post-retirement life.
We have discussed what retirement plans are, how they work and what are some of the best retirement plans available today. At this point, you should have enough knowledge to figure out which retirement plan works best for you. Make sure to choose wisely, as it is a matter of your future.
FAQs
There is no specified age for the early environment; however, the age of 40 to 50 years is considered favourable.
The amount of monthly savings varies on the basic financial needs of the individual. However, it is recommended that you should save around 15% of your income every month for your retirement.
Yes, buying an insurance policy can help your family to lead a peaceful life without any financial worries.
Vesting age refers to the age after which you can begin receiving your monthly pension.
Just like any other investment plan, you need to pay a premium regularly. The premiums are accumulated in a fund of your choice, which generally lasts for a fixed period of time.
