Many people in India falsely believe that saving money is the only way to financial freedom and stability. While it is definitely a start, there are many other ways to save money than simply setting aside funds in your savings bank account. Did you know that there are retirement plans in the market that help you achieve that objective?
If you are an urban Indian and want to ensure that you live a financially secure life long after your retirement, then you need to understand what is retirement and how you can start saving today to protect your future from financial instability.
Don’t be fooled by the common misconception that the best retirement plans will cost you a fortune. With careful planning, you will be able to invest in your today and tomorrow, smartly. A robust retirement fund will not only help you live your life with dignity but also pay for medical emergencies, allow you to sustain your lifestyle, and do the things you hadn’t done in your working years.
If you are not sure whether you should invest in a retirement plan, then this article will tell you how it can help you secure your future.
It gives you peace of mind
This is one of the most important benefits of investing in a retirement plan. When you think ahead, you are not only able to save a substantial sum for a comfortable retirement but also give yourself the peace of mind that your future is financially secure.
Helps you take objective pre-retirement decisions
If you start planning for your retirement, you will be able to make better financial and professional decisions to reach that post-retirement goal. Should you start your own business or stick with your job? Will it help to add another educational degree to your professional portfolio? Can you afford to take time off your job to study further? These are just some of the many questions you may be able to answer better, depending on your life stage, when you start thinking about investing in the best retirement plans.
Be on the same page as your partner
Retirement planning also helps you and your spouse get on the same page, as far as financial goals are concerned. It will be helpful to know the kind of lifestyle they expect to have once you are no longer employed and if they have any specific goals that they want fulfilled. Having this conversation at the right time will also help you choose the best retirement plans that will enable you to reach your goals without the need to dig into your savings.
Understand the tax benefits
Not many people know this but when you buy the best retirement plans, you save money in taxes. You need to understand how to leverage your retirement plan to reduce your tax liability as you withdraw those benefits. For instance, some of the best pension plans will give you tax-free maturity benefit u/s 10(10D) of the income tax and life insurance based retirement plans will help you save up to Rs. 1.5L per annum on premiums. Educating yourself about the tax-saving benefits will help you make the most of your retirement plan.
Saves you money
There are many ways to reduce costs when you buy the best retirement plans. For example, there are many insurance policies that you can buy at a lower premium if you invest at a young age. Similarly, when you invest in the best pension plan at the right time, you save money in low premium and saved taxes.
Understand potential financial issues
Planning and investing for your retirement can also help you see how your financial goals relate to oner another. It also gives you the perspective to evaluate them in isolation, allowing you to identify potential issues in the long run. This assessment will also help you make the right financial decision that will hedge these risks, thereby enabling you to choose the best retirement plan that covers all your bases.
Protects your loved ones
A retirement plan will also protect your loved ones, even when you are no longer there to provide them. This is perhaps one of the most crucial benefits of investing in a pension plan.
By planning for your retirement ahead of time, you are able to take the right financial decisions that prove to be effective in the long run. Be sure to carefully evaluate all the available plans as per your needs and budget. You can also compare them online for benefits and features before investing. Don’t hesitate to seek professional help if you feel uncertain about choosing the right product.