Retirement planning is an important financial decision that every individual needs to take for themselves and their loved ones. Don’t make the mistake of ignoring it. You’ll regret it when you outlive your savings and have to depend on your children for financial support. As the life expectancy in India increases and so does the cost of living as well as healthcare, it has become imperative to invest in the best pension plan in India to protect your future.
Long gone are the days when your options for the best pension plan were limited to government-backed instruments like PPF or FDs. Today, however, there are far too many options that can cater to all kinds of investors looking to safeguard their financial wellbeing after retirement. In this article, we will look at some tips to help you invest in the best pension plan in India.
Start early
You must start planning for your retirement as early as possible. Ideally, it should start as soon as you draw your first salary. Over a period of time, as your income increases, you can increase your contributions as well. That is the reason the best pension plan in India is the one that is flexible.
Invest in equity-based funds
Don’t fear the risky nature of equity funds. They are also the most rewarding investments and add immense value to your financial portfolio. So, when you are planning your retirement, make sure you include equity-based retirement investments. Consider looking at ULIPs or equity stocks for that purpose.
Diversify your options
As they say, don’t place all your eggs in one basket, same holds true for investments as well. While equities can certainly shake things up a bit, it is also important to balance out your investments with safer options, such as gold, bonds, and fixed deposits. When you invest in all these instruments in the right proportion, they can work wonders in helping you meet your post-retirement goals.
PPF
When you want to secure your financial health after your retirement, don’t just rely on PPF alone. They can be one of the options in your portfolio but the best pension plan in India is the one that is diverse and made up of varied risk-profile instruments. Since EPF or PPF alone will not be able to offer you inflation-adjusted returns, you need to consider other instruments as well.
Ask about the vesting age
One of the benefits of pension plan is that you will be able to make withdrawals or income at an age more suitable to your needs. For instance, if you want your retirement plan to start giving you income at the age of 50 years, then you can choose a plan with a vesting age of 50. Therefore, you need to choose a pension plan with vesting age that is suitable to your requirements.
Look for higher sum assured
The best pension plan is the one that protects you and your family members when there is no steady income anymore. That is the reason you need to look for a plan that gives you the highest sum assured on assured death benefit or vesting bonus.
Assured death benefit
Don’t buy a plan that does not give you the guarantee of a death benefit in case something happens to you. The best pension plan in India fully reimburses the investor of their premiums, in case of their untimely demise.
Annuity option
Look for a pension plan that gives you the longest guarantee of annuity, whether you survive that period or not. It means that the surviving member will continue to receive pension till the policy period. This will help you secure your partner’s finances; in case something happens to you.
Check the overall expenses
You should opt for a pension plan that has the lowest expenses. Remember the more you pay towards keeping the policy active, lower is the amount that is saved for your retirement. You can compare pension plans based on expenses to find the one that is most suitable affordable.
Take help from an expert
Retirement planning can be complicated for someone who is investing for the first time. If you feel overwhelmed with all the serious sounding terms and not sure what means what, don’t hesitate to take help from an expert who can handhold you throughout the process.
It is necessary to protect yourself and your family members against all kinds of risk, most of all financial risk, to help them lead a comfortable life even in your absence. This article tells you how to choose the best pension plan in India. So, consider using it as a jumping off point and start looking for an option that works best for you.
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