There will always come a time in every earning individual’s life when they know they must hang their boots and call it a day, i.e., retire from their everyday work life. While this phase is more or less inevitable, what one can plan for is how to have an ideal pension plan and work towards achieving that stress-free and relaxed life.
This is where pension plans come into the picture, helping you plan your savings towards a comfortable post-retirement life.
In pension planning, there is the accumulation phase, and then there is the distribution phase. During the accumulation phase, knowing how to park your money and in which instruments and knowing what your target amount should be is crucial.
The best pension plan in India will help you decide your future needs keeping inflation in mind, and work towards parking your money accordingly.
However, the sooner you start planning for your retirement, the better it is, as the money you park gets enough time to grow. Here are four reasons investing in retirement planning with tools such as the best pension plan in India has become the current need of the hour, and you should be starting your retirement planning at the earliest:
- Creating Your Nest Egg
In the world of investments and savings, a nest egg is the total amount you manage to set aside over the years for your future, i.e., once you retire and your regular earning stops.
Therefore, you can evaluate your current assets and cash inflow expected in the near future and then minus this total from all the possible liabilities, expenses and bills, or emergency funds you will need in the future.
Remember to calculate the inflation rate when saving for your retirement. This will help you plan your finances well and work towards building a nest egg that will suffice.
- Emergency Or Medical Needs
As you grow older, your healthcare and medicare needs would also increase, and the hefty medical bills and hospital charges can be very stressful on your pocket, especially once you have retired.
One of the best investment options here would be a pension plan that can help you deal with these expenses from the money you have saved in the pension scheme and the interest you earn on it over the years.
- Diversify Your Investments
When top investors often say don’t put your eggs in just one basket, it is true for retirement plans. There are various types of retirement plans that will not only help you focus on your wealth accumulation goals but also provide insurance cover to secure your loved ones.
- Availing Of Tax Benefits
The contributions that you are making towards your retirement plans are eligible for tax deduction under section 80CCC, as per the old tax regime — a maximum of Rs. 1,50,000 can be saved annually under this section, as per the Income Tax Act. The rest of the amount can then be distributed as an annuity, and that will fall under the taxable category when you retire.
When it comes to looking for retirement plans, the best way to go would be a mix of pension plans that can accumulate your corpus and offer competitive returns and offer an insurance cover for the individual who purchases the plan. In addition, a dual benefit plan like this can certainly provide you with a more comfortable post-retirement lifestyle and make it easy for you to care for your spouse and family.
Bottom Line: Look For The Best Pension Plan In India
If you imagine having worked for 8-10 hours every day for the past 20-25 years, then the retirement phase becomes something most people look up to. Nowadays, stressful work hours have led the younger generation to consider retiring in their early 40s and 50s, meaning that planning for your retirement should definitely be on your mind from the time you start earning.
Retirement plans are a great way to save aside for rainy days and ensure that you have created enough of a nest egg in your earning days. With the help of the right pension plan, you can:
- Be prepared for emergencies and unprecedented expenses in the future
- Have a holistic cover by option for insurance with your pension plan
- Have a better alternative to simply parking money in a savings account
- Be financially covered and worry-free post your retirement
- Cultivate a disciplined approach towards saving
- Plan your taxes from the beginning and have a systematic financial plan in place
You must give retirement planning enough time and consider saving towards your nest egg as soon as possible. The best-case scenario would be to go online and browse various pension plan available, compare benefits and pick one to start parking your money from the time you are earning a steady income.
The more you can save from the very beginning, the easier it gets to build a corpus and achieve your wealth creation goals to facilitate your financially secure retirement plans.