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A Comprehensive Guide for Retirement Planning in India

It is a well-known fact that a few years after you start your professional life, you start coming across terms like retirement planning, best retirement plans, the best retirement age and retirement benefits. If you are also listening to these terms a bit too often and you are wondering what to do about it, then you should read on. Here you can find all the essentials of retirement planning in India.

 

What is Retirement Planning?

In simple words, retirement planning means planning your finances in such a manner that you can achieve your financial goals before and after you retire. For this, you need to analyze your current financial status, set realistic financial objectives and estimate the future cash flow.

Why is Retirement Planning Needed?

Retirement planning is needed to ensure that you don’t outlive your savings or fail to live the lifestyle you are used to post-retirement. It is also essential for ensuring that your loved ones don’t end up broke in case of your untimely death or disability.

Retirement Planning Benefits

Some of the key benefits of retirement planning are:

  • Provides financial stability to you and your dependents
  • Makes achievement of financial goals easy
  • Allows you to make wiser investments
  • Lets you live a comfortable life post retirement
  • Offers money in case of emergencies like medical emergencies
  • Ensures that you don’t outlive your savings
Retirement Planning in India

Retirement planning is essential for every Indian because:

  • India has a rising non-working elderly population
  • The years of retirement are increasing thanks to improved life expectancy
  • As nuclear families are on the rise, self-support during retirement years is vital
  • The cost of living and essential services healthcare is increasing day by day
  • India lacks a proper social security system like the western nations
  • Indians need to bear expenses of dependents like kids’ education, parents’ healthcare costs, etc. These costs are not usually borne by individuals in the west.
Retirement Planning Process

Before you start dreaming of hefty retirement benefits, you should follow the below-mentioned steps to ensure that you have a solid retirement plan in place.

  • Detect your financial as well as retirement goals
  • Analyze your present financial situation
  • Carry out risk profiling of potential investments
  • Allocate your assets wisely
  • Create an investment strategy
  • Revising and revise periodically
Ideal Retirement Age for Indians

There is no ideal retirement age. You should start investing when you are young to ensure that you retire with peace and security. The retirement age one should select depends on a number of factors like age, health, financial situation, how you feel about a job, etc. One should try to work as long as possible and avoid retiring early unless you are sure you will be financially independent and maintain the desired lifestyle no matter how much you live post-retirement.

It’s better late than never!

If you are in your late forties, fifties or even in your sixties, you should realize that you can start retirement planning even now. Yes, you will need to save more and work harder to let your investments grow, but the effort will be worth it eventually. Some strategies that can make things a bit easier are cutting down your expenses, choosing investment options with higher returns, looking for other sources of income and hiring a professional financial advisor to make retirement a reality rather than a far-fetched dream.

Selecting Retirement Plans India

Many of you must be wondering how to get started with your retirement planning. Well, the first thing you need to do is to use a free online retirement calculator to decide how much money you need to have for a happy retirement. Then you ought to read up about various investment options, retirement plans, and pension plans as it will help you to decide where you need to put your money.

Pension Plans

Pension plans are the most popular choice. You can start with learning how to choose best retirement plans.

Pension Plans offered by Nationalized (PSU) and Private Insurance Companies

We compared unit linked pension plans of both Nationalized (PSU) and Private Insurance Companies on the basis of maximum and minimum vesting age, maximum and minimum policy term, minimum premium, maximum and minimum entry age, charges for premium allocation etc. to help you find the best pension plans available.

Brands Compared include: Aditya Birla Sun Life, Bajaj Allianz Life, Canara HSBC OBC, Edelweiss Tokio, HDFC Life, ICICI Prudential, IDBI Federal, SBI Life, Max Life, and Reliance Life. Read More

Market Linked Investment Plans or Mutual Funds

A mutual fund is an investment where it pools the money of several investors and invests this in stocks, bonds, money market instruments and other types of securities. It’s an ideal investment vehicle for regular investors who do not understand much about investing. Investors can choose a mutual fund scheme based on their financial goal.

Learn

Compare

Consumer VOICE Banking and Finance experts have compared some Market Linked Plans to recommend the Best Buys:

Health Insurance Plans

Consumer VOICE experts have compared following insurance plans to recommend the Best Buys

Our last bit of advice is that you should regularly read banking and finance blogs to keep up with the happenings of the world of banking and finance and make smart decisions about your investments. It is also advised that you revisit your investments and gain knowledge about all the latest banking and finance products to ensure that your investments flourish with time.

If you have a medical condition, you should also compare relevant health insurance plans to get a financial cushion in cases of emergency.

We have compiled a few Buying Guides to help you choose the best insurance plans:

Conclusion

In essence, it can be said that retirement planning in India is tougher than you think. You must get all the help you can to ensure that you let your money grow and serve you when you have retired.

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