Best Retirement Plans l The Key to Safe Financial Future

January 19, 2023

 

Retirement plans are crucial for securing your financial future as they allow you to keep living your life the way you want to when you retire. Thanks to advances in technology and medicine, people are living a longer and better life, ultimately increasing health expenses and lifestyle costs.

Retirement plans present excellent opportunities to maintain the standard of living and quality of life of the older population after retirement. Even when you retire, these plans provide you a steady income coming in. In addition, in an emergency, they will help in paying for medical bills. To learn more about the best retirement plans that can enable you to live the retired life of your dreams, keep reading.

Deferred Annuity

Under a Deferred Annuity retirement plan, the beneficiary can choose to build wealth by paying a lump sum or by paying a premium over a fixed period. Upon the completion of the tenure of your policy, the beneficiary will begin receiving their pension money. It is important to note that only one-third of the withdrawal from the fund is non-taxable. The two-thirds remainder of the fund is taxable.

Under a deferred annuity retirement plan, the accumulated value is locked. Hence it cannot be withdrawn in case of any emergency. Salaried employees mostly prefer this kind of retirement plan since it offers premium payments for a sustainable financial future. All the reasons why it is regarded as one of the best retirement plans in India.

Immediate Annuity

Under an immediate annuity retirement plan, the beneficiary starts receiving the pension money immediately. The beneficiary will make a lump-sum payment and based on the amount they have invested; they will begin receiving the annuity. In an immediate annuity plan, beneficiaries can pick from assorted options.

According to the ITA 1961, the premiums paid for an immediate annuity retirement plan are not subject to taxation. The nominee still receives the pension during the policy's term in the event of the policyholder passing away, making it one of the most preferred and best retirement plans in India.

Pension Plans with Life Cover

The best retirement plans typically include an annuity option along with life insurance coverage. The nominee will get the benefits if the policyholder passes away. Pension plans with life cover aim to offer stable flow income to the retired individual.

Health concerns are more common as people get older. As a result, if the policyholder passes away, the life insurance component of this retirement plan provides financial security for the policyholder's partner. The risk protection is paid for by a small portion of the assets made in these kinds of pension funds.

Guaranteed Period Annuity

Depending on the flexibility of the plan that the investors have chosen, the investor in this form of retirement plan in India receives an annuity for a specific time that is a multiple of five – five years, ten years, fifteen years, or twenty years. The beneficiary will continue to receive the annuity in the event of the policyholder's passing, enabling them to pursue their financial objectives in their absence. Its safety and flexibility make it one of the best retirement plans in India.

Annuity Certain

The investor receives the annuity for a set number of years under an annuity-certain retirement plan. For instance, it might fall somewhere between 60 and 70 years old. The nominee will keep receiving the pay out until the insurance's term is up in the event that the policyholder dies before the policy matures. To achieve your retirement goals and ultimately live a stress-free retirement life, annuity certain plans are among the best retirement plans available in India.

Life Annuity

An investor will continue to receive the pay-out sum under a life annuity plan until death. If the investor chooses the "with spouse" option, the policyholder's spouse will remain in receipt of the annuity even after their partner's passing. This strategy is especially useful if your partner is unemployed. It will guarantee your family's financial stability while you are away. Such strategies are perfect for ensuring that, should the worst happen, you can still be there for your family's aid.

Unit-linked Pension Plans or ULIP Plan:

Traditional retirement plans differ from a ULIP plan. A ULIP plan provides investors with investment and insurance benefits. The combined benefits provided by the plan make a ULIP plan one of the most popular methods of retirement planning. It also provides other fascinating perks like tax exemption. According to Sections 80C and 10D of the Income Tax Act of 1961, ULIPs are free from taxation.

Conclusion

The benefits of retirement planning are numerous, including medical insurance and assurance of a source of income after retirement. You can attain your retirement goals by selecting the best retirement plans. Even though retirement may seem far away from where you are in life, early planning is necessary to arrive prepared. Your retirement will be more rewarding if you start planning now.

 

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