IN THE UNIT LINKED POLICIES, INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER
Retirement plans are life insurance products designed to act as investment plans to allocate a part of your savings to accumulate over a period and provide financial security after retirement.
Retirement pension plans help you invest your earnings over the years and create a fund that you can withdraw as a whole or in parts during your retirement years. Further, with dual benefits of protection with investment, these plans are ideal for covering your financial needs in the golden years of your life. Given the high cost of living and rising inflation, retirement planning has become more necessary.
Retirement plans or pension plans are a specific type of insurance policies that help you live a comfortable retired life. These plans provide protection and also act as investment policies that help you accumulate a corpus to meet your post-retirement needs such as medical expenses, living costs, etc.
These plans invest your earnings over the years and create a fund, which you use a lump sum or in parts during retirement. With adequate investment and proper planning, you can easily plan your golden years and secure your future with a steady flow of income even after retirement.
We tend to invest our hard-earned money in meeting our day-to-day needs so much so that we pay little attention to securing a comfortable and prosperous life for ourselves in our later years.
Most of us have demanding jobs and even demanding lifestyles. In the daily hustle-bustle of our stressful lives, do we even give a thought to life after retirement? But we owe it to ourselves to take a deep breath and think about the future too. What would be the point of working so hard if we are not able to enjoy the fruits of labour in our retired life? Apart from lifestyle, we have responsibilities towards our families that may not go away with retirement.
To ensure that your post-retirement life is smooth and peaceful and your family is still well looked after, planning for retirement now is very important. Basis your current age, income, lifestyle and life goals, you can choose an investment amount and plan for your retirement.
Retirement from professional life should not mean that you stop getting a regular income. Retirement plans allow you to allocate a part of your savings and let them grow over a period of time. You can then opt to get regular pay-outs after you retire.
When you’re young, the idea of retirement hardly comes to your mind. The most prevalent thought is that ‘Retirement is so far away!’ ‘Why would I need to save for it right now?’
You should start planning for your retirement from a young age so that you are financially secure in the non-working years of your life.
Here are the topmost features and benefits of retirement plans:
Here a few reasons why you should choose retirement plans by Edelweiss Tokio:
You should plan for your retirement, and accordingly, generate a retirement corpus. However, the plan you select must offer adequate returns for this purpose. To calculate the return of your pension scheme, you can use an online pension calculator that will only need basic information like your savings, current financial liabilities, monthly expenses, etc.
Retirement planning is important for a secured life. You can use the below steps to precisely know the amount you will need for a happy retired life.
After entering all the details, you will get the sum you need to live a comfortable retired life. Or, you can use the calculator given below:
These types of annuity start paying you income immediately after you purchase the policy and pay the lump sum.
The amount you need to save for retirement depends on your financial needs during retirement and the amount you need to maintain your standard of living as well as take of your medical needs and any other expenses that might occur during retirement. You can use our retirement calculator online, or the quick calculator provided on this page to know the exact amount you will need to save for a happy retirement.
Retirement and pension plans are ideal for the following people:
A critical part of retirement planning is to begin early in life. A failproof retirement plan allows you to start saving way before retirement. The amount one needs for a secure retirement depends on person-to-person. However, experts specify certain parameters that will help you save for retirement adequately.Here is an example that can help you understand how much one needs to save for retirement:
Mr Rajesh Nayyar is 30 years old and is married. Mr Rajesh works in a multinational private firm as a senior manager and earns ₹80,000. His wife is dependent on him for financial support. Mr Rajesh wishes to retire at the age of 60.
His monthly expenses total ₹35,000, including the insurance premium and other investments. He also has an emergency corpus for urgent needs and is financially stable.
By the time Mr Rajesh is 60 years, his monthly expenses will be ₹2.66 lakhs, assuming a 7% inflation rate. To meet these future expenses and maintain a secure life after retirement, Mr Rajesh will need a monthly saving of ₹27,000 in the present.
Retirement is the golden period of your life. You can live the life of your dreams, but only if you plan during the working years of your life. To ensure you create a failproof retirement plan, follow these five tips:
Each pension plan has a different eligibility criterion depending on:
Apart from securing your family’s financial future and your own future income, a Retirement Plan also offers tax benefits under section 80CCC.
Let us look at the tax benefits offered by different types of retirement plans:
When investing in a pension plan, be careful of these factors:
The best time to invest in a pension scheme is now. As per experts, it is good to invest in a pension scheme early in life to encash on the power of compounding. This will allow you to get higher returns from your policy upon maturity. So, the ideal time to invest in a pension scheme as soon as you get your first paycheque. You can start small and gradually increase your investment as you earn better in life.
The right time to begin pension planning is as soon as you start earning. With the right investment plan, you can get a high rate of return because of a longer accumulation period.
You should choose a retirement plan as per your risk tolerance. If you are a risk-averse investor, you can opt for market-linked plans. However, for retirement planning, you should diversify your portfolio to include traditional and safer investments, along with ULIPs, equity funds, and other securities, to minimise risk yet maximise returns.
While the ideal age of retirement is 60 years, you can choose to retire as per your preference even earlier or later. However, for this, select a plan that best matches your needs in terms of risk appetite, tenure, vesting age, returns, etc.
Don’t just compare plans in terms of returns, also factor in the expenses and charges that come with retirement plans. Pick a plan that is economical and viable on all fronts.
Traditional Retirement Schemes like PPF or EPF may be reliable and time-tested, but you can always think of supplementing your retirement plans such as ULIPs.
Here are the most important documents required to buy a pension plan in India:
Pension plans or retirement plans allow you to save a part of your income and let it accumulate over a while to get a steady income during retirement. The main objective of pension plans is to become financially independent in the future and maintain your standard of living, especially when you do not have a regular source of income. Given the high cost of living, sharply rising medical costs and rising inflation, pension plans have become a critical need of life.
When you retire, you do not have a regular source of income to meet your day-to-day expenses. This can become a problem if you have not planned well for these non-working years of your life. However, with a pension plan, you can get a reliable income flow even during the retired years of your life. In a pension plan, you invest a regular sum over time or pay a lump sum to accumulate a large corpus of funds for your future. When you retire, you get regular payments from your amassed sum to meet your retirement needs and expenses.
Unit-linked retirement plan or Pension ULIP plans are market-linked pension products offered by life insurance companies. They are suitable for individuals looking for a long-term retirement plan that doubles up as an investment.
Yes, a retirement plan acts as additional financial security to secure your retirement needs. The growth of inflation has been at a rapid rate, so your PF account might not be sufficient to cover your complete expenses in the future.
Pension plans are a wise investment for your future financial security because they offer the following benefits:
Pension plans allow you to enhance your life cover through add-ons like disability due to accident, critical illness, etc.
Here are some of the most vital features of pension plans:
With increasing costs of lifestyle, medicines, and healthcare, the amount required for ensuring a financially independent retirement becomes quite huge. Retirement planning becomes a crucial part of the earning years. Starting early on the journey will help you build a significant corpus (lump sum amount) for meeting your future needs.
Retirement planning can be summarised as save and invest as much as you can. Remember that planning for the future is a mixture of both fiscal and investment prudence. Using a retirement calculator is an easy way to decide on the retirement fund.
Calculating the pension fund using a retirement calculator is beneficial for several reasons:
· It helps you calculate how much you need to save each month for retiring with a large sum at the end of one’s professional career.
· A retirement benefits calculator will also help you determine the precise investment opportunities which you must take advantage of.
· Compare the various retirement options and plans that most competent financial organisations provide. Nowadays, even listed entities have their own retirement planning sections.
· It helps you identify the various retirement planning strategies which exist and helps you review and compare them too.
· If you have any high-value plans post-retirement, our calculator will help you save accordingly for such exigencies and planned spending sessions.
· Lastly, an online retirement calculator is useful when you are short on time, and you need to take decisions on such important aspects as future investment options.
Along with future security and insurance protection, investing in a retirement pension plan also qualifies for some tax benefits under Section 80CCC. Following are the tax benefits provided by the pension plan-
· An immediate annuity is a guaranteed pension plan with tax benefit on the premium payments. All the premium payments under this plan are fully taxable once you have received the principal amount in full.
· The tax benefit of a deferred annuity is that it lets your income grow tax-free during the Accumulation Phase. This means you will not have to pay any taxes on the money that accumulates during the time of premium payment.
Some retirement plan provides flexible death benefits along with pay-out options. Immediate annuity plan and easy pension plan by Edelweiss Tokio offers death and survival benefit.
No, retirement or pension plan does not end after the policyholder's death. Depending upon the type of pension plan selected, either the spouse or a chosen nominee is entitled to the pension after the policy holder's death.
A participating plan enables the policyholder to share the profits of the insurance company in the form of bonuses or dividends. In a non-participating plan, the profits are not shared, and no dividends are paid to the policyholder. Both these types of plans provide guaranteed life cover.
Yes. A person can have multiple pension plans with private banks and other commercial pension plan policy providers.
For queries, write to onlinesales@edelweisstokio.in
0 - Provided the premium paying term is more than or equal to 10 years.
1 - This is applicable only if all due premiums are paid and the policy is inforce.
3 - As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
The Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender/withdraw the monies invested in Linked Insurance Products completely or partially till the end of the fifth year.