Retirement Plans in India: 5 Benefits You Need to Know

Retirement Plans in India: 5 Benefits You Need to Know

Retirement planning is one of the most important things in one’s life. Unless one properly plans their retirement, it could become very difficult to sustain their lifestyle once the person has stopped working. 

What is Retirement Planning? 

It’s the way a person plans their finances and makes strategic investments in the best retirement plans in India, and other instruments to safeguard their financial future post-retirement. In this way, a person can ensure that they are positively able to replace their salary with a secondary income so that their finances don’t stop, and they can take care of their living expenses without having to compromise on their quality of life. This makes it one of the most important investments that a person can, and should make while they are still working. 

What is a Retirement Plan? 

A retirement is designed to ensure that a person is able to generate a significant corpus by regularly investing money into the scheme. Once the plan has matured, the policyholder is entitled to either receive a lumpsum amount, regular month payments, or a combination of both depending on the plan they opt for. 

Types of Retirement Plans in India

Now that you we have briefly discussed what is retirement planning in India, and a retirement plan in general, let’s look at a few types of retirement plans in India that you can invest in. 

  1. NPS:  The National Payment Scheme is an initiative by the Government of India to provide a retirement fund to all citizens between the age of 18-70 years. It’s open to all employed, and self-employed individuals, and is considered to be one of the best retirement plans in India in terms of stable returns since it’s backed by the government. 
  2. Deferred Annuity: Under this scheme, a person can make either a single or daily premiums to start accumulating a significant corpus for retirement. 
  3. Immediate Annuity: This scheme gives immediate annuity, and is good for people who either haven’t made any investments towards their retirement, or want to supplement their investment with an additional corpus by paying a single lumpsum amount to start benefitting from the scheme. 
  4. Annuity Certain: This pays a regularly till a set period, and the policyholder has the option to choose the duration of the payment. In case the policyholder passes away, the investment made towards the plan is paid out to the nominee (s)
  5. Life Annuity: This policy remains active till the policyholder is alive and comes ‘with spouse’ option to provide pension to the spouse in case the policyholder passes away. 

These retirement plans in India are some of the best schemes you can invest in; however, it’s best to choose one that aligns with your financial goals for greater benefit. 

Benefits of Investing in Retirement Plans in India 

There is a plethora of benefits that comes with investments made on the best retirement plan. Let’s look at a few of the most prominent ones! 

Guaranteed Vesting Benefit

A retirement plan gives you guaranteed vesting benefit by providing you with a fixed income once you have stopped working and the plan has matured. This benefit can be passed on to the spouse of the policyholder in the event of untimely demise of the policyholder. 

Death Benefit

Generally, retirement plans are also life covers. So, in case of the untimely demise of the policyholder, the nominee (s) are entitled for death benefit payout, and receive the sum assured. 

Flexible Payment Terms

The best retirement plan offers you the option to choose the premium payment term. So, depending on your financial goals, you are free to choose your premium payment terms under the policy. 

Customization options

You can further strengthen your retirement policy by adding in optional riders such as cover for critical illness, accident, etc. for added protection in case of any exigency. 

Tax Benefits

All pension plans and retirement plans are eligible for tax breaks under Section 80 C of the Income Tax Act, 1961. This lets you save up to 1.5 lakhs a year on buying a policy or making payments towards policy renewal. 

As you can see, you can greatly benefit by investing in a retirement plan. Not only will you be building a corpus for yourself, but you will also be safeguarding your family as it offers the dual benefit of savings and life cover. On top of that, the additional riders, and tax saving component makes them a smart investment choice. 

Max Life Insurance offers you one of the best retirement plans in India by taking into account your financial goals, and individual requirements. They are one of the market leaders, and known for their exceptional service delivery track record. So, in case your retirement planning is underway, and you are thinking of making an investment towards becoming financially independent in the golden years of your life, do check out their best retirement plan on offer right away! 

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