Retirement Plan

Retirement planning. Is it so important in life?

Picture this; you are in your 60s, sitting with your loved ones at your favourite destination, enjoying drinks and watching your grandchild playing. Or, you are dependent on your child for your day-to-day expenses. We are sure you want to avoid experiencing the second instance. You have lived your life on your terms; why not secure your future and be prepared to live it like a boss? Retirement planning is the first and crucial step in life, as you only get to retire from work, not from your liabilities.

Make it possible with the right planning and intelligent choices for your golden days. Continue reading to learn what retirement planning is and which plan is best for you to gain financial security post-retirement.

Retirement plans or annuity plans are a type of life insurance that helps save your hard-earned income for the most curious time, your golden days. Retirement planning at the right time can help you gain financial stability by saving a corpus for your post-retirement. You will get a lump sum or a fixed instalment amount in definite intervals after your retirement. A good retirement plan helps beat inflation, keep your investment safe and maintain a standard of life.

We have mentioned some high-yielding benefits to give you better clarity why retirement plans work best for you:

• Save for a little longer

  If you make investment decisions at a young age, then you have the ultimate benefit of saving your money for a little longer than ever. Your reserves are ensured.

• Make your own decisions

  You are independent to make your own decisions while witnessing the red flags in your life. Also, make your own decisions about how to live your life post-retirement, even when your income window is closed.

• Relieve the burden on your children

  In the era of the nuclear family, you will ultimately leave a burden of your expenses on your child if you have not pre-planned your retirement. Planning your retirement will help your children reduce the burden and provide peace of mind to you and your child.

• Negate the effect of inflation

  Your savings are saved from the market no matter how it performs or even if knocking the inflation. You can get a lump sum or a fixed amount in a definite interval.

• Tax Benefits

  Under Chapter VI-A of Section 80C, 80CCC, and 80CCD of the Income Tax Act allows saving taxes on income gained from any retirement plan. Some of the plans also allow the exclusion of taxes on the withdrawal of interest. Also, the maturity amount is saved from taxes.

Here’s the list of retirement plans offered by prominent life insurance companies.

HDFC Life Systematic Retirement Plan

Coverage Benefits

• Limited premium paying term
• Defer annuity payouts
• Guaranteed income for whole life

Eligibility Criteria

Entry Age: 45 - 75 years
Premium per instalment: Rs. 2,625 approx (monthly)

SBI Life Retire Smart Plus Plan

Coverage Benefits

• Market linked returns
• 7 fund options
• Loyalty additions and terminal additions

Eligibility Criteria

Entry Age: 20 - 60 years
Premium range: Rs. 3,000 approx (monthly)

Max Life Guaranteed Lifetime Income Plan

Coverage Benefits

• Guaranteed income for life time
• Min. death benefit of 105% of purchase price
• Multiple annuity options

Eligibility Criteria

Entry Age: 25 - 85 years
Minimum purchase price: Rs. 1,000 approx (monthly)

ICICI Prudential Signature

Coverage Benefits

• Loyalty rewards
• Tax benefits
• Whole life cover

Eligibility Criteria

Entry Age: 0 to 60 years Minimum Premium: Rs. 30,000 per annum

LIC Jeevan Dhara II Plan

Coverage Benefits

• Incentives available
• Annuity top-up option
• Avail of loans

Eligibility Criteria

Entry Age: 20 - 79 years
Minimum Annuity: Rs. 1,000 approx (monthly)

Bajaj Long Life Goal

Coverage Benefits

• Income for retired life
• Loyalty additions
• Option to reduce premium

Eligibility Criteria

Entry Age: 0 - 65 years
Minimum Premium: Rs. 2,500 approx (monthly)

Max Insurance Online Savings Plan

Coverage Benefits

• Premium redirection
• Family income benefit
• 12 fund options

Eligibility Criteria

Entry Age: 18 - 60 years
Minimum Premium: Rs. 1,000 approx (monthly)

Retirement planning is essential in setting your long-term and short-term financial goals and how you will achieve them. With time, the value of liquidity generally depletes if it is not invested. With retirement planning, you can identify different income sources, set your financial objectives, and calculate your estimated future expenses to manage your risks and assets. There are specific common goals that every individual wants to achieve with retirement planning:

• Fulfil your family's financial needs even after your retirement.
• Be prepared for any aspect of wealth or health emergency.
• By investing in the right retirement plan in India, maintain a good lifestyle by checking off your bucket list.
• Provide death benefits and riders just like insurance cover.
• Take full advantage of compound interest.

You may also like to read more about: 1 Crore Term Insurance Plan

Unlike any other investment and saving plan, you are responsible for making premiums for a pre-decided period per your chosen retirement plan. A retirement plan will ultimately decide the accumulation of the funds you will receive. After your plan completes the maturity period, you will be eligible to get the benefits as mentioned:

• By withdrawing the entire amount in one go.
• Purchase an annuity plan.
• Partially withdraw the amount and invest the rest in the annuity plan.

There are some significant points to remember if you want to surrender your retirement plan:

• This charges a cancellation fee from the amount.
• If you surrender the plan after 5 years, you will continue to receive the interest.
• If you surrender the plan before 5 years, you must buy a deferred or immediate annuity plan.

Learn more about: Top 10 Pension Plans in India

Besides the ease of selecting from multiple retirement plans available in India, selecting one that fits your expectations can be challenging. To make it easy, systematic planning is essential. Here are quick steps you need to consider while planning your retirement:

There are specific key points that you need to fulfil before buying a retirement plan in India. Some of them are mentioned below:

Age: Different age criteria exist for different insurance companies' entry into a retirement plan. Generally, the minimum age is 18, but some companies set the entry age as 30, and the maximum is 70 years.

Premium: There is a minimum premium amount that a policyholder needs to pay, which will determine the pension amount.

Vesting Age:The age when the policyholder starts getting a pension is the vesting age. Generally, it is set at 45 years or varies per company norms, and the maximum vesting age is set to 80 years.

Documentation: While purchasing a retirement plan, you need to provide some documents, including proof of address, age, identity, and income.

After crossing the retirement age, one can file to claim retirement benefits. In case of a health emergency or demise of the policyholder, the claim should be filed immediately within 15-30 days. Here's the general claim settlement process:

Comparing and going through the complicated policies of retirement plans may be challenging for you. Our experts at RenewBuy can guide you through the process anytime. Compare and Pick the Best:

We instantly help you select the best fit for your life goals from the multiple retirement plans available.

• Best Experts

  You can count on our trustworthy advisors near you, who keep your life priorities first.

• 100% Assured

  Get safe and reliable policies regulated by IRDAI.

• 24X7 Claim Assistance

  Connect with our advisors to make your claim process hassle-free.

Promising yourself a stress-free post-retirement life rather than worrying about future circumstances is better. With RenewBuy, plan your retirement and be ready to bear all the bills by yourself without any compromise.