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- HomeBlogsFinancial Planning How to Plan Retirement in India: The Complete Guide
Need assistance in choosing the right insurance plan? Get a call from our Expert.
Need assistance in choosing the right insurance plan? Get a call from our Expert.
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How to Plan Retirement in India: The Complete Guide
Retirement is the most delicate part of your life. It is free from professional and financial obligations. However, you need to have sufficient financial resources to make the best of your retirement life. And the retirement plan should start as early as you start your career because you will have lesser financial responsibilities, better income and a longer time to accumulate funds at that age. Various retirement schemes in India make this procedure simple and easy.
Here is how you can plan retirement in India.
Why is Retirement Financial Planning Important?
Before we get started, let us realise the need for retirement planning.
Retirement starts at the end of your employment phase. Therefore, you will start losing out on a regular source of income. Although you might have earned a huge retirement corpus, you may not be able to spend it wisely. You might have been used to a lifestyle that you may not be able to compromise and a bunch of family obligations left to be fulfilled.
Also, your medical expenses might rise abruptly and unexpectedly at an older age. The right way to manage such routine expenses and unexpected financial scenarios to lead a happy retirement life is by planning your retirement early and with the best strategies. Choosing a retirement investment will help you secure your future while also saving on taxes*. Here is how you can plan retirement in India.
The Retirement Planning Guide
There are different ways to plan for retirement. However, you should get started right. Here are a few steps that you can consider.
Have a monthly budget - Your retirement investment should not hinder your day-to-day living expenses. List down your sources of income and routine expenses such as groceries, clothing, travel, entertainment, etc. Allocate specific funds for the individual expense and set aside a fund for your financial plan for your money goals and retirement investment.
Banks and life insurance providers in India offer several annuity product solutions. Life insurance providers have introduced different customisable product solutions. You can purchase a retirement investment product with a lump sum payment and ensure a regular income for your retirement or pay premiums regularly to receive life cover and guaranteed 1 returns in the form of regular income for a defined period starting from maturity.
Our Tata AIA policy also provides investment solutions with immediate and deferred annuity plan options. The immediate annuity plan will provide the regular income immediately as you purchase the product, and the deferred annuity plan will start providing it from a later date. You can also invest in financial products backed by the government, such as the Public Provident Fund, National Pension Scheme, Post Office Monthly Income Scheme, etc. Evaluate the returns on investment and your affordability to decide on the product option.
There are different ways to do retirement planning. First, you need to evaluate your personal financial needs and obligations to find the best product based on your affordability.
Conclusion
Retirement is a golden period of your life. However, it would be best if you took the necessary financial initiatives to lead a happy and satisfying retirement. First, you must make a monthly budget and decide on the short-term and long-term financial objectives. Then, you need to allocate funds for the same and set aside a fund for your retirement goals.
While allocating funds, you need to consider the inflation rate. Based on these financial needs and affordability, choose the right retirement investment that can serve your purpose satisfactorily. Finally, start investing early in life, keep increasing the investment promptly and stay invested to maximise the retirement benefits in India.