Retirement is one of the major goals for financial planning. Pension plans act as savings plus investment plans to help you secure your finances in your golden years. This is when you need a reliable source of periodic income, preferably monthly and a large lump sum amount to help meet your regular and unpredicted financial needs.
Since after you retire, your financial investments would end up being the sole source of your income, it's necessary to build these two pillars. Here arises the need for having the back of a retirement plan. Read on to know the top 5 reasons to buy a pension plan in 2023. 1. Guaranteed Income or Pension Retirement plans are not market-linked and they offer a fixed pension post-retirement throughout your lifetime or for a certain period. The annuity period could be immediate or deferred as per the type of plan you pick. An assured income helps you plan your golden years and stay a step ahead in your financial planning. You can use a pension calculator to determine the ideal amount that you should save periodically to serve you in the distant future. 2. Security of Assets and Savings If you don't have any concrete financial backing, your funds and assets would remain prone to leakage and pilferage. A pension plan will act as a haven for your current savings and will thereby secure your future. 3. Growth of Your Savings Your hard-earned money is supposed to serve you in your later years. A retirement plan can compound it over the long term to make your post-retirement years comfortable. The earlier you begin to invest your savings in a retirement corpus, the higher will be the effect of compounding. 4. Tax Benefits A pension plan offers various tax benefits as follows:
5. Diversification of Your Investments A retirement plan often lets you pick the asset class that you wish to invest in, depending on your financial goals and risk profile. In that case, you can choose from debt funds, equities or a combination of both for your investments to diversify. To prepare for your retirement years, consider choosing a reputed insurance company in India to invest in a suitable pension plan that helps fulfil your financial goals. Remember to use a pension calculator to decide how much you need to save. The chosen plan must offer an individual non-participating non-linked retirement plan with various benefits like a guaranteed corpus, financial protection of your family after your demise, flexible payment frequency, and a limited premium payment term.
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August 2023
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