It is crucial for everyone to have a pension plan in place these days. Life is unpredictable, but old age eventually comes to everyone. Post your retirement there is a lack of a regular income or paycheck. Therefore, it is vital for you to secure yourself and your family/spouse and ensure that there is sizable retirement corpus available for you after your retirement. You also need to have a financial portfolio that you can use to have the required financial coverage whenever you need it. Due to the general health concerns of old age, one also requires money for any emergency medical needs that may arise, and that can put pressure on one’s retirement savings corpus. Thus, it is important to take care that not all your savings go into your daily expenses. Having a proper, well-thought retirement plan for your ‘second innings’ is essential so that you can live those years with peace and dignity.
So what are the things that will help you in your retirement? Following are a few pointers that will help to guide your retirement planning:
- Starting Earlier: The early bird does get the worm! To ensure that you have a substantial amount of savings corpus in place by the time you reach retirement, you need to start very early on and make the right choices. In order to make and put a retirement plan in place, one also needs to consider practical factors such as inflation rates, since that will affect your coverage during your retirement. It is also important to list down your needs and requirements to create a plan accordingly, so that you have a good financial support later on. After all, one deserves to spend their retirement golden years without stress and worry.
- Flexible Disbursal: You must always choose a pension/retirement plan that is willing to offer you a flexible mode of disbursal of the maturity amount, either immediate or deferred. You need to select according to what your requirements are – if you want your retirement plan to provide coverage for daily needs throughout your retirement years, then opting for regular, monthly payouts is more feasible; whereas if you wish to invest further in a different annuity instrument, then it would be better to have a lump sum payout.
- Sufficient Coverage: The sum assured in your pension plan must provide you with sufficient coverage for all that you require. Avoid being under-insured at any cost, and make sure that you choose a retirement pension plan with maximum benefits to meet your future financial requirements and long-term financial goals.
- Extra Benefits/Riders: For extended financial coverage, retirement plans usually offer certain additional benefits. These extra benefits, also known as riders, include coverage points such as accidents, disabilities, critical illnesses, etc. and they widen the coverage in addition to the original plan benefits. Although these additional coverage benefits are great, you must still choose these additional riders carefully. Before selecting either of these extra benefits, gauge your personal requirements properly, as these riders directly affect your payable premiums.
You must keep these 4 pointers in mind before you begin your retirement planning. How to retire early? Start early, research carefully, choose wisely and monitor vigilantly in order to make the most out of your retirement investment plan.