How to Choose the Best Retirement Plan for Your Golden Years

financially independent after retirement

Just like physical exercises are needed to maintain a healthy body, a smart planning is indispensable for maintaining a good financial health.

Hence, an intelligent financial planning is what you need to maintain a financially healthy post-retirement life.

Retirement is a time when income drops and expenses rise. Post-retirement days, therefore, can be financially challenging unless you have already started building a retirement kitty to take care of the financial needs of your golden years.

How to Make a Successful Retirement Planning?

There are different ways to make your retirement planning successful. Here, we will talk about three integral parts of retirement planning- savings, insurance and investment.

Savings and investment almost go hand in hand in retirement planning. The money you save for retirement gets invested in some instrument to give you a good return in the long run. The third important aspect of a successful retirement planning, as already said, is insurance which will protect your life and family financially from all sorts of unfortunate future events.

What if you get all the three things in just one go? Wouldn’t that be great?  “Of course” is what you just said, right? Read on, if you want to know more about an all-in-one retirement planning that will give you the triple benefits of insurance, investments and savings.

How to Ensure Economic Independence With Pension Plans?

When it comes to retirement planning, we cannot keep pension plans off our discussion. A pension plan is a type of life insurance policy that ensures a regular flow of income even after your retirement.  This will help you stay economically independent throughout your life.

Pension plans abound the insurance market in India. How will you pick the right plan for you? Read on to find the answer.

Shortlist some life insurance companies depending on their current claim settlement ratio. Visit the webpage of each company and download the product brochure of the retirement plans they offer. You will find almost everything you want to know in the product brochure of the particular plan.

  • The first thing to look for in a pension plan is how much sum assured it offers.
  • If the sum assured offered by the insurer meets your criteria, you should next have a quick look at the features of the plan.
  • The next step would be to check whether you are eligible to buy this plan. In other words, check whether your age falls within the entry age permitted by the company.
  • Next important thing to check is what amount of premium you will have to pay and for how long in order to receive the sum assured you want.
  • If all the steps above meet your criteria, you have found the right retirement plan for you. Now, you should start investing in the plan as soon as possible.

If you find it difficult to do research on your own, you can take help of an online insurance aggregator to do the same.  You just give them your age, your expected retirement age, and the sum assured you want, and the aggregator will display a number of suitable retirement plans for you. This will also help you make a comparison among all the plans.

Read Also: Best Plans for Retirement by HDFC in India

Know the Different types of Retirement Plans

Pension Plans come in different types. While immediate annuity plan lets you enjoy the annuities immediately after you pay the purchase price, deferred annuity plans make you accumulate your money for a certain period of time before you start receiving the annuities.  There are unit linked and non-unit linked pension plans. Unit linked retirement plans are basically investment plans that offer life coverage as well. There are some retirement plans that give no life coverage, only the purchase price is paid back to the beneficiary in case of the policyholder’s death. Some retirement plans, on the other hand, offer lifelong insurance coverage, while some plans allow you to include your spouse under the plan as well.

Make Your Choice Wisely

So, you see, different retirement plans have different features and benefits. Hence, it is important to understand the differences to be able to choose the right plan for your retirement. Here is a piece of advice for you – Never invest in a unit linked pension plan unless you have a high risk appetite. Investment plans are risky; hence, you may not get a satisfactory return if the market goes down.

Do your research thoroughly and invest in a good retirement plan as early as possible. This will help you stay financially independent and free of worries throughout your life.


About Aditi Singh 356 Articles
Aditi Singh is an independent content creator and money finance advisor for 5 years. She is recently added with Investment Pedia. Internet users are always welcome to put comments on her contributions.

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