Benefits of starting a retirement plan early

By the end of this article, you would have a detailed idea about retirement plans and why it is essential to get started with retirement planning at the earliest!

What are retirement plans?

You would have witnessed the joy of being financially independent for the major part of life.What if you could enjoy the golden years after retirement without having to depend on others for survival. As you grow older, medical expenses might also be on the rise.

Retirement plans are a specific category of life insurance plans that are designed in a manner that you can meet your post-retirement needs without any hassles. Before deciding the amount that you need to invest for retirement planning, you should consider parameters as assets, liabilities, existing medical expenses, etc. so that you can still maintain your lifestyle post-retirement. Retirement calculator could help arrive at that decision.

Benefits of Retirement Plans

Before we delve into the prime benefits of early retirement planning, here are the top-level benefits of retirement plans:

• By investing in retirement plans, you and your dependents (particularly spouses) can receive a timely pension for the rest of the life.
• There are retirement plans, where the children will receive a lump-sum benefit, in case you and your spouse have passed away. The future of your children even when in your absence.
• Like other investment plans, you can enjoy the tax benefits of up to Rs. 1.5 Lakhs under Section 80(C) of the Income Tax Act, 1961.
• You can invest in multiple pension plans with private policy providers and other commercial pension plan policy providers. When it comes to pension schemes by the Government such as NPS (National Pension Scheme), a person can only have an investment in one scheme.

A major advantage of pension is that it does not end after the policyholder’s death and the nominee still gets benefits of the pension plan after the death of the policyholder.

How retirement (or pension) plans help in the post-retirement life?

No one can foresee the future but one thing is evident that savings you do today will reap greater benefits in the future. The same principle also applies to retirement plans (or pension plans).

As regular income dries up post-retirement, pension plans can help in meeting the day-to-day expenses, including medical expenses. You manage to accumulate a significantly large corpus through the regular premiums paid by you as a part of the policy. The corpus not only helps you but also your dependents (i.e. spouse) once you retire from your job.

Benefits of investing inretirement plans early

Here are the top five things that can be achieved using a relevant retirement (or pension) plan:

1.Reap the benefits of compounding

Compounding is the best way to earn interest from your investments. By investing in a good pension plan at the early phase of your life, you can gain benefits of compounding from the investment.

2. Meet the post-retirement goals

Each one us would have sacrificed one thing or the other just because you had shoulder the responsibilities of the family (and other dependents). You might have items such as traveling, starting up, etc. in the to-do list and the returns you get from a pension plan can be instrumental in fulfilling those dreams.

If you want to meet your post-retirement goals, it is recommended that you invest in retirement (or pension) plan like ICICI Pru Easy Retirement (Unit Linked Pension Plan) that provides regular income during your post-retirement life.

3. Attain Financial Independence

Pension plans are useful in meeting the daily expenses when you have do not have a constant source of income. You would not want to rely on your children’s savings on the latter part of your life.

Investing in a pension plan that gives good and timely helps you attain financial independence which is necessary if you want to lead the same quality of life after your retirement.

Apart from these primary benefits, you can support your financial dependents and save funds for medical emergencies or any other type of emergency that life throws at you. ICICI Prudential Life Insurance offers several pension plans that provide good returns and keeps all your worries at bay!