The fast-paced lives you lead today have taken over your ability to think about the time when the work you are doing now will soon vanish. Retirement feels so distant that thinking about it is never on your priority list.
Most of us tend to splurge our hard-earned money on things that we consume or enjoy in the present. The lives we lead are also equally demanding. But a slight bit of thought about or life after a few decades will make us realize that saving up to lead a comfortable life till the very end is very important. To ensure a peaceful and dignified life post-retirement, investing money right now is very pertinent.
How to select a Retirement Plan
One is never too young to think of a retirement plan. Several companies offer a variety of retirement plans based on your age, income, and age of retirement and goals. Retirement life does not mean you stop getting regular income. If anything, it opens more options for income in retirement. The retirement plan basically allows you to invest some part of your income for better income and eventually better life post-retirement. So there are options of retirement plan where the investor gets regular payouts after retirement.
There are many types of retirement plans
a. Deferred Annuity Plans: This is a long term investment where the investor receives money for several years down the line.
b. Employee’s Provident Fund: It is available to all salaried classes subject out rules laid out in EPFO.
c. Public Provident Fund: It is a long term investment plan that gives capital preservation.
d. National Pension Scheme: this scheme can be availed by anybody above the age of 18. It offers its investors two options
a. Active choice and
b. Auto choice.
Advantages of having a retirement plan:
a. The retirement plan helps in reducing responsibilities at a very young age
b. It provides a foundation for the time value of money
c. Better life at an older age
d. Major expenses when taken care of give a peaceful life.
e. Less stress, as most of the investment is done at an age where income is comfortable
f. Almost all of the investment plans and retirement plans come with tax benefits of not just the invested amount but also the maturity amount.
g. Well planned retirement plans lead to healthy and long life post-retirement.
Q1. What is the right age to start a retirement plan?
A1. One is never too young to start a retirement plan. However, the age at which one starts earning is the best time to think of a retirement plan.
Q2. Which is the best retirement plan available?
A2. The market is abounding with lots of retirement plans. The best one for any individual depends on many factors like income, age, goals, etc. Hence the investor is generally advised to go through different options and then decide the best one.
Q3. What are the retirement plans available in the market?
A3. National Pension Scheme, Employee’s Provident Fund, Public Provident Fund are some of the schemes available.
Given the number of plans available, the investor is advised to thoroughly check all the terms and conditions before taking up a retirement plan.