Discover a guided, personalized approach to managing your wealth with STS Wealth
Pension plans are also known as retirement plans are investment plans that allow an individual to set aside some part of their income over their working/earning life to ensure a regular income on retirement. Retirement is an inevitable stage that comes in every person’s life irrespective of them being in employment or in business. While it is not so pronounced in business persons, it is a stage in life which brings feelings of anxiety, especially in terms of finances. With a regular salary no longer being there at the end of each month, having steady income flow to maintain one’s existing lifestyle and meet regular expenses is a
valid concern on every retiree’s mind. This is where Pension Plans become a relevant must have product for all individuals especially those preparing themselves for a financially stable retirement. The fact that these plans come with a life insurance cover make it even more ideal for any individual given that Savings get consumed fast and sometimes emergencies arrive, so selecting the best pension scheme helps in ensuring cash flow for meeting basic daily needs on retirement. Investing in Pension plans regularly allow the insured to build a sizeable corpus for retirement which will make a significant difference in the way one spends these golden years.
Types Of Pension Plans
Depending on the benefits, Pension plans can be classified as follows:
Why Does An Individual Need A Pension / Retirement Plan?
In today’s age of nuclear families, most retired/elderly persons need to fend for themselves physically and financially and hence it is very important to have a proper retirement plan to ensure a steady flow of interest income (from investments) or a corpus which one can draw on to meet ongoing daily needs. The most important aspect of these pension plans is that they try and ensure that most elders continue to life and experience their existing lifestyle eventhough they do not have a fixed income coming in. Planning for a secured financial future post retirement is not something that one must plan for and invest in one year before retirement, but needs to take shape atleast for 10-15 years in leading upto retirement to ensure a sizeable corpus is thus built for the retirement period. Retirement planning hence needs proper planning and to some extent financial discipline to set aside a part of earnings for a later rainy day. They key reasons for retirement solutions thus are:
- The corpus created for retirement helps in dealing with any unexpected emergency – which requires financial intervention.
- Once an individual has appropriately planned for retirement, he/she can then have less stress and anxiety and can lead a peaceful retired life by maintaining their existing lifestyle and very importantly not depend on anyone else.
- The other advantage in having this retirement corpus if there are any unforeseen medical emergencies for any family members, these investments will come in handy.
- With the help of these funds, the insured can be assured of a guaranteed and regular income after retirement as an annuity to take care of monthly expenses.
- It’s never too early or too late to start planning and investing towards retirement – this involves understanding the level of expenses likely to be incurred and ensure the corpus takes care of these expenses.
- In India today, there are dime a dozen pension plans across various insurance companies and hence the insured has an opportunity to compare and choose the most appropriate plan for their requirements.
- One must be prepared financially to meet any unexpected emergencies through insurance policies, be it Life Insurance, Personal Accident, Health insurance – one must ensure these policies are in place