Here’s How the Best Retirement Plans Can Strengthen your Financial Planning
The need to save money to ensure a stress-free and comfortable retirement life is of utmost importance. Retirement is a golden period in everyone’s life. Your employment obligations end, and you get to do things that you like.
However, for the latter to happen and to live life comfortably, you need funds. This can get challenging with no income to support your expenses, which is probably the only downside of retirement.
However, this downside is not something that one cannot overcome. When you have the best retirement plans at your rescue, you can stay stress-free.
The best retirement plans for you will depend on your specific situation, as there are numerous types of retirement plans available on the market. The best plan for retirement would be the one that meets your needs and gives you a lot of freedom.
Best Retirement Plans
We’ll be discussing the best retirement plans in India for you to choose from:
1. Unit Linked Investment Plans:
The primary objective of this plan is to help you build your wealth. However, the amount you accumulate with the help of this plan can also be used to fund your retirement life.
ULIP plan offers the benefits of both insurance and investment. They come with a death benefit that offers a sum assured or the fund value, making it an ideal insurance instrument. As for its investment feature, the plan invests in various market securities. In addition, ULIP plans give you more freedom and control over how you plan for retirement. The decision to select a specific ULIP plan is affected by various factors.
2. National Pension Scheme:
National Pension Scheme, also known as NPS, is a government-backed scheme that helps salaried individuals accumulate wealth for their retirement. The pension scheme is open to salaried individuals belonging to the private, public, and unorganised sectors.
The individual is required to make regular contributions to the scheme. Once they reach retirement, they can withdraw some portion and the remaining as an annuity. The scheme also provides tax benefits to individuals under Section 80C of the Income Tax Act.
3. Atal Pension Yojana:
The Atal Pension Yojana is an Indian retirement plan for people who work in the unorganized sectors. The scheme is governed by the Pension Fund Regulatory and Development Authority, or PFRDA.
The scheme ensures financial stability for underprivileged senior citizens in India. An individual is required to make regular deposits into the scheme. These contributions can be INR 1000, 2000, 3000 and so on. The beneficiary can also withdraw the pension fund in case the account holder dies.
4. Public Provident Fund:
The Public Provident Fund is an investment plan backed by the government that can help you reach your retirement goals. The PPF comes with a tenure of 15 years, which can be extended as per the wish of the policyholder.
The scheme requires the investor to contribute a minimum of INR 500. PPF also increases your returns according to the interest rate set by the government. Partial withdrawals, under this scheme, are permitted from the 7th year onwards. The scheme also allows the investor to secure loans against the fund.
5. Systematic Investment Plan:
A Systematic Investment Plan, also known as an SIP, is not entirely a retirement plan but an investment plan that can help you meet your retirement goals if you keep investing for a long time.
Regular monthly deposits into the scheme are required. The amount you deposit is used to invest in financial assets. Even though the results are market-linked, investment in SIP is safe due to rupee cost averaging. An SIP calculator can be of help when it comes to approximating returns.
How do Retirement Plans Strengthen your Financial Planning:
Retirement plans might seem like an additional cost, but they are an investment for the future. You might have a savings fund to depend on to fund your retirement life, but investing in retirement plans in India with it is vital, especially if you want to live a comfortable lifestyle.
This is of utmost importance as the senior years come with many health issues. That’s why it’s essential to be financially prepared for any such circumstance.
Here are a few tips you can use to select the best retirement plans in India:
Be Mindful of the Interest Rate:
The best retirement plans offer secure returns, especially those that offer fixed interest rates. Therefore, ensure that the retirement plans you are going for offer you considerable interest income
Flexibility:
The best retirement plans can be used to provide for any medical or financial emergency that may arrive in the future. However, to ensure that, you must factor in the flexibility of retirement plans. This is to say, most retirement plans in India come with withdrawal restrictions. Hence, look for those that offer you some sort of withdrawal liberty.
With these tips, you can strengthen your retirement and financial planning. Don’t forget to understand your financial requirements and the schemes’ workings before picking the best retirement plans.
