This makes it very necessary for them to have a clear retirement plan to improve their prospects after retirement.
Opt for appropriate investment optionsInvestments are the only viable alternative to augment a doctor’s retirement income. Mutual fund investments including blue-chip stocks and large-cap funds can act as some of the best financial instruments for growing personal wealth and building a sound retirement corpus. These funds are less risky as well, thus ensuring a growth in the money invested.
On the other hand, fixed deposits (FD) and public provident fund (PPF) are widely regarded as some of the most secure investment options. Once government doctors cross the age of 60, they will be eligible for higher interest rates especially earmarked for senior citizens.
Moreover, doctors of government hospitals can enjoy tax exemptions on their investments. Investments up to Rs. 1.5 lakh in PPF are completely exempted from income tax. Doctors attaining the age of 60 can also choose the monthly interest payment option in FDs to augment their daily earnings.
Choose appropriate insurance plansThere are several insurance plans in the market that provide adequate life and health compensations. A robust life insurance plan with a substantial sum insured, covering critical illnesses and guaranteeing monthly payments (in case of disability) and lump-sum compensation to family members (in case of death) is preferable.
Further, doctors, in particular, are vulnerable to lawsuits by their patients. Therefore, they must choose specific doctor indemnity plans to effectively manage such critical situations.
Select appropriate pension plansThere are scores of pension plans that guarantee income after retirement. Most of the doctors’ final years in service are invariably marked with immense workload and financial stagnation. Since government doctors do not get any pension after retirement, it is advisable for them to designate a significant portion of their wealth in the National Pension System (NPS).
The benefits of NPS are many. They are the most flexible, portable, regulated and simple type of pension scheme in India. Besides NPS, there are several pension plans which have a policy term ranging from 10 to 20 years requiring premium payments from 5 to 7 years.
Government hospital doctors in India lead a stressful life and have many obligations in their life. In spite of that, they should identify their retirement goals clearly and must simultaneously ensure that the goals are realistic, achievable and feasible. It is equally important to have a structured investment portfolio before retirement so that they can lead a peaceful life (at least financially) post-retirement.
Click here to visit our Retirement Planning Calculator
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.
Are Savings Enough for Retirement?
Financial discipline and life aspirations determine whether your savings are going to be enough for retirement.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.
How To Apply For Personal Loan
Applying for a personal loan has become extremely easy these days. With the increase in applicants, banks and other financial institutions have made the process very simple.