We all wish for a happy, tension-free and a meaningful life post retirement. Life can be anything that you want it to be once you retire. The moment someone talks about retirement, first thing that comes to your mind is, ‘pension’. Retirement plans are basically investment plans that helps you allocate a portion of your savings to accumulate as time passes and offer you with a steady yet regular income post retirement. Retirement planning has become too important given the rising inflation and standard of living. You can meet the unexpected expenses by planning your retirement in advance. Due to the compounding effect, your funds multiply thereby increasing your retirement corpus.
These retirement plans are also known as personal pension plans. They can be availed through life insurance companies. Since these types of retirement plans aren’t linked to your employer, your employer won’t be contributing to this investment. Personal pension plans are of three types; deferred annuity plan, immediate annuity plans and pension plans with or without life cover. Deferred annuity plans are further classified into traditional retirement plans and unit linked insurance plans.
Non-insurance based pension plans are also called as work-based pension plans. These types of retirement plans are usually set up by the employer to aid the employees save for retirement. Here, both the employee and employer contribution to the retirement fund is done on a monthly basis. This contribution is deducted from the salary directly. These work-based pension plans are classified into three types; defined benefit plan, hybrid plans and defined contribution plans.
The Indian government has introduced various types of retirement plans. This initiative has been taken to offer social security. National Pension Scheme (NPS), Public Provident Fund (PPF), Employee’s Provident Fund (EPF) and National Pension Scheme (NPS).
Upto 25 yrs
25 yrs to 40 yrs
40 yrs to 60 yrs
Beyond 60 yrs
The pension plan makes regular payouts post retirement. This amount is known as the annuity. You can opt for the annuity either monthly, quarterly, half-yearly or yearly basis.
Provident fund amount won’t be sufficient enough. Therefore, it is important to look out for avenues such as retirement plan. Inflation would make your PF amount look tiny in the coming future. To suffice your future expenses and to continue leading a comfortable lifestyle, it is important that you opt for a retirement plan. Besides, health issues too aggravate with growing age; so do not only be dependent on your provident fund amount.
You can opt for a waiver of premium rider, accidental death and dismemberment rider, term rider as well as critical illness rider
No, you cannot withdraw the entire contribution that you have made towards the National Pension Scheme before attaining the age of 60 years or retirement age. Only a maximum of 20% of your total corpus is allowed as a pre-mature exit amount, in case of fulfilling the mentioned criteria’s:
The premiums that you pay for your retirement plan are subjected to Rs.10000 deduction maximum on the taxable income, under Section 80CCC of the Income Tax Act. 1960.
You very well know that you’ve paid for it but are hoping to never require using it! When you file an insurance claim, you probably have suffered some type of loss or damage that is insured by your Insurer. This is when your Insurer offers you coverage and compensation for the losses covered or for the damages after validating your claim. So it is vital to be familiar with the claim process to avoid any headache at the later stage.
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