Dear Future Self: Why Investing In Your Own Retirement Is Necessary
The word ‘retirement’ brings to mind images of a person sitting in a rocking chair with a book, at peace with themselves. It is a golden phase in one’s life, but only if one has ensured that they have set aside enough money to meet daily expenses and have enough left over for emergencies. This is made possible with a good retirement insurance policy.
What are retirement plans?
Retirement plans are insurance products that offer a pension after you retire, i.e. after the age of 60 years or earlier if you choose to quit working before you turn 60. You pay a premium towards the plan and allow it to accumulate into a large corpus waiting for you by the time retirement rolls around.
Also known as ‘pension insurance’, retirement insurance plans help you have a comfortable retirement when your income from job or business stops, but expenses do not. But do remember that choosing a good plan with a high coverage is important, so that the plan may care for your loved ones in your absence, and provide you with a life of comfort and freedom from financial worry.
Mulling over the idea of buying the best retirement plan? We present you with 5 reasons to do:
#1 Retirement can be good or terrible, depending on how you plan for it.
Retirement is supposed to be the golden phase of one’s life. All the years spent in working hard, providing for the family and securing their future, finally end with you taking time out for yourself and your hobbies. After a lifetime of hard work, it is time to sit back and enjoy the fruits of your labour. But you can only do so if you are financially independent after retirement. Once you turn 60 and retire, your income stops at that moment and you may face about 20-odd more years of living on savings and investment money. If you don’t have a retirement nest egg waiting for you, then this phase of your life can turn into the most problematic and traumatic one. You may even have to depend on your children or other family members for your upkeep. Avoid this future with steady retirement planning while you’re still employed.
#2 Starting young gives you a headstart on retirement planning.
People in their 20s and 30s may not be able to wrap their heads around the idea of buying a retirement insurance policy – at this age, retirement seems far away and does not figure in current plans. But the years pass by swiftly, and soon you are in your late 40s and 50s and staring at the prospect of retirement. Instead of waiting for later to buy a retirement policy, do it now while you are still young and employed. The earlier you invest in an insured retirement plan, the longer you can stay invested and the higher the eventual corpus. A longer time horizon also gives you the chance to do essential course correction with your retirement-related investments to gain the maximum traction out of them. More to the point, premiums for younger persons investing in retirement insurance plans are lower for those who start investing in their 40s and 50s.
#3 You will need more money post-retirement than you do now.
Inflation and the daily costs of living continue to creep skyward every single day. Though you make a good income, sometimes you feel the money is stretched beyond breaking point as the demands on it grow. Living costs have a way of rising upward and never spiralling downward. This means that in the future, you are going to need much more money for monthly expenses, household maintenance, travel and food, etc. than you do now. Can you manage with a stoppage of income after you retire, and only your savings to fall back on? If not, then you need to buy a retirement pension plan pronto.
#4 The best retirement plans offer an income post-retirement.
There are a bevy of pension insurance plans in India. However, not all of them are created equal, and some are of no use at all. When buying an insured retirement plan, make sure to partner with a leading insurance provider in India, with a good range of retirement plans including annuity insurance. Not only do you get a wide choice of plans to choose from based on your retirement needs and risk appetite, you also have the assurance of dealing with a trusted company that offers transparency and ease across all touchpoints. The best retirement plans in India offer an income post-retirement, which helps you manage your daily expenses and pay your bills without worry. They also offer protection till you attain the age of 85 years, guaranteed loyalty additions, low premium allocations, option to take a part lump sum and rest period pay-out, etc.
