Retirement planning is one of the critical financial responsibility of every working professional. If you ignore it, you may have to rue it later as you outlive your savings and not having enough funds to live an independent post-retirement life. It is therefore vital to start investing in a pension at an early age. But, how do you choose the best pension plan? The following tips will help you.
Inflation-adjusted returnsOne of the best factors to determine which pension plan is best is to see if the plan offers inflation-adjusted returns. What this essentially means that the pension fund you choose must provide returns that are not affected by the prevailing inflation post-retirement, the value of the money must rise with the rising level of the prices of goods and commodities.
Guarantee pension for you and spouseLiving a financially independent and a happy retirement life is something that you want to share with your spouse and other loved ones. To accomplish this, one of the key factors to consider while evaluating a pension plan is to check if it guarantees pension to your spouse in the event of an untimely demise of the policyholder. This is crucial to safeguard the interest of your spouse when you are not around. The pension plan you choose must cater to the needs of both – you and your spouse; a good plan will ensure that your better half continues to get the financial benefit even in your absence.
FlexibilityWhile it is advisable that you start investing in your pension as soon as you get your first pay cheque, the ability to pay a higher premium may rise slowly over the years as your income increases. It is therefore advisable that you chose a pension scheme provides you with the flexibility to increase the premium contribution through top-ups. Even a small increase of the premium every year would increase your corpus fund substantially over a period.
Bonus and other benefitsWhile looking for best pension plans in India, it would be worth assessing if the plan offers you additional benefits or bonus. Like some pension plans offer a loyalty bonus over a period. This will immensely help you accumulate a more substantial sum in your retirement fund.
Guaranteed income optionNo matter, how much ever you save throughout your working life, there is always a risk that you will run out of money eventually. It is therefore vital that you arrange continuous guaranteed income for life. Make sure that you look for a pension plan that offers guaranteed income throughout your post-retirement life.
There are different types of pension plans that provide this option, and you can choose a plan that suits your requirement.
Learn more about Pension Plans here
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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