Four important things you need to know about term life insurance policies

Just like you need to plan for you family’s wellbeing, your future home, your child’s education and work expansion, you need to plan for your retirement. In India, planning for retirement is limited to the pension plans one receive along with his job offer letter. We don’t really give much thought to the how we’re going to survive financially post retirement, as it is a given that our children will take care of us, like we did with our parents. But as society progresses, children will have their own families to take care of and we as old parents will have to fend for ourselves. Our children are not our insurance policy that will provide for us after retirement. 

Retirement planning, if done right and at the right time will help you lead a very good life when you finally retire from work. You need to start early if you want to enjoy a comfortable I retirement. Living from pay check to pay check is a risky business, even if your pay check is huge. Mostly because one day it is bound to stop. You may get laid off, or have to change jobs or reach your retirement age. Not all employers pay handsome pensions to their employees. This is why you need to invest in a pension plan from a very early age. Devising a retirement plan is like creating pipeline of income for when you stop working. It is a long process, but one that will ensure a happy retirement. 

To help you kick start your retirement plan in India, here’s where you need to invest your money.

1.  Invest in ULIPs: You can alter your ULIPs on the basis of what you want to save for, it can be your own business, your child’s education or your own retirement. Unit Linked Insurance Policies that focus on retirement plans invest in equity based funds to avoid taking risks, in turn providing you with handsome returns.

2.  EPFs: The Employees Provident Fund is another way to ensure return during retirement. It is perhaps one of the most popular pension plans in India. Currently the rate of return from EPF is fixed at 8.5% p.a. EPF also offers deduction up to 1 lakhs limit under section 80C. The interest from EPF is tax free and withdrawal is also tax free if there is continuous service of 5 years.

3.  Invest in bonds: A bond is when a company borrows from you. Purchasing bonds of a particular company is like giving that company a loan. The company will pay you interest on your loan. In the case of some companies the interest can be as high as 10% or 12% p.a. These bonds usually have a maturity of 10 to 15 years. They’re a great way to invest your money for retirement.

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Created on Dec 28th 2017 05:26. Viewed 702 times.

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