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How to pick the right pension plan: 5 tips

We present 5 tips that will help you spend your retirement in style and comfort.

Retirement is an undeniable fact in both your personal and professional life. There comes a time when you must quit the workforce and look forward to a new innings.

Though it can be a golden phase in your life, it is often a cause of worry for most retirees. This si because many retirees fail to plan for their retirement while they are still employed. Along with the increasing life expectancy in the country, the cost of food, healthcare and daily living costs have also risen dramatically. This means more and more people are facing the challenge of post retirement financial planning.

But there is a plethora of options available to you, in terms of planning your retirement wisely today. These plans and schemes provide insurance along with investment. We recommend going with the best pension plan in India. Meanwhile, the following are 5 simple tips for choosing the right pension plan.

1. Start ASAP

Don’t wait for the best pension plan in India to drop down in your lap. Financial experts believe that pension planning should start with your first pay cheque. A retirement plan comprises of two phases: the accumulation phase and the annuity phase (on reaching the vesting age). During the accumulation phase, one accumulates money via periodic premium payments. The pension starts after you reach the annuity phase, which usually ranges from 40 to 70 years. The sooner you start the better it is for you.

2. Get expert help

Post retirement financial planning is one of the most important aspects of your professional life. So, don’t try to wing it. If you are not well versed with the financial field and retirement services on offer, seek the help of an expert financial planner. It will be a wise investment of your money.

3. Diversify your portfolio

Invest intelligently by following an asset allocation approach. Even if you have the best pension plan in India, you should still complement it with investments in gold, shares and bonds. This will diversify your portfolio and reduce the element of risk.

4. Protect your spouse

Your retirement is a milestone which inevitably involves your spouse as well. Hence it would be prudent to evaluate the retirement plan to ensure that the policy corpus sufficiently benefits your surviving spouse in the event of your untimely demise.

5. Choose the vesting age correctly

As mentioned above, it is a smart move to start investing early for your retirement plan. However, as one’s tenure, pay scale and experience grows, so does their ability to afford higher premiums. Some providers do offer the flexibility of topping up the premiums annually. With time, even small top ups like these can increase the size of your retirement corpus significantly.

A lot of retirement plans also offer tax exemptions and benefits, which are an added bonus on the entire proposition.

Post Author: Fathiyya Al Shaikh

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