Contact Us
For NRI Customers
(To Buy a Policy)
(If you're our existing customer)
For Online Policy Purchase
(New and Ongoing Applications)
Branch Locator
For Existing Customers
(Issued Policy)
Fund Performance Check
Login
Customers
Employees
Partner
- What is Retirement Planning? - Ultimate guide for retirement planning
- What is Retirement Planning?
- Why Retirement Planning is important?
- How Retirement Planning Works?
- How Much Do You Need to Retire?
- Steps to Retirement Planning
- Other aspects of Retirement Planning
- What are the stages of Retirement Planning?
- Types of Retirement Plans
- Best Retirement Plan in India 2025
- Retirement Plans by HDFC Life
- Secure Your Retirement with Our Pension Plans
- FAQs Retirement Planning
- Heres all you should know about Retirement Plans.
- Popular Searches
-
Life coverage
-
Tax2 Benefits
-
Guaranteed1 Income
RETIREMENT PLANS BUYING GUIDE
:1800-266-9777
Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
Written By:
What is Retirement Planning?
Retirement planning is the process of preparing your finances today in order to ensure a secure and comfortable life after you stop working. It involves estimating your future expenditures, considering the impact of inflation and building a mix of savings and investments that will generate a steady income in the course of your retirement years.
Key factors to consider include your lifestyle goals, medical needs, inflation and reliable income sources such as pension schemes or retirement funds.
For instance@, if you anticipate your month-on-month expenditures to be ₹50,000 today, you will need to plan for a higher amount. Say ₹80,000 or more, 20 years later, due to inflation.
@ - NOTE - The values shown are for illustrative purpose only.
Retirement planning in India assists you in creating a retirement corpus that ensures financial independence, meeting post-retirement goals and protecting you from financial worries in old age.
...Read More
Why Retirement Planning is important?
Plan for Uncertain Economic Conditions
Lower Dependence on Social Security or Government Schemes
Enable Wealth Transfer and Legacy Planning
Take Advantage of Retirement-Specific Tax Benefits
Achieve Peace of Mind and Financial Confidence
Retirement planning is not just about saving funds; it is, in fact, associated with building financial security, stability and mental peace for your future. Here are the reasons why it matters.
The economy might change in ways that are not expected. Recessions, inflation or instability in the job market can impact your savings as well as investments. For instance, in the course of COVID-19, many witnessed income disruptions while their expenses continued.
A prudent retirement plan comes across as a safety net. This makes sure that even if the economy shifts, your future lifestyle remains secure.
While schemes such as EPF, pensions or other government allowances endow great support, they might not be adequate to cover all post-retirement expenditures. For example, the month-on-month pension from EPF might fall short of mitigating rising healthcare or lifestyle costs.
By building your own retirement corpus, you gain more control, flexibility and great confidence that your needs will be met.
Retirement planning is not just about mitigating your needs; it is even about securing the future of your family. Through estate planning tools such as wills, trusts and beneficiary designations, you can ensure your wealth is passed on in a smooth manner to your chosen heirs.
Early planning prevents disputes, safeguards your assets and permits you to decide how and when your wealth must be transferred.
Investing in retirement plans also brings tax benefits. Contributions as per Section 80C# , Section 80CCC and Section 80CCD(1) (of up to ₹1.5 lakh). In addition, Section 80CCD(1B) (an additional ₹50,000 for NPS) can lower your taxable income^^.
Using such benefits early not just lowers your tax liability but also assists your corpus in growing faster through the long-term compounding effect.
Perhaps the greatest importance of retirement planning lies in the emotional security it provides. Knowing that your future is funded reduces stress and allows you to make better life decisions.
For example, a couple who began planning in their 30s can now travel, pursue hobbies, and support their children without financial worry, proving that peace of mind is the real return on investment.
How Retirement Planning Works?
The objective of retirement planning is to prepare you and your loved ones for a stress-free retired life. Robust retirement planning will ensure that you are able to generate a steady flow of income to meet your regular expenses and fulfill your financial goals post retirement. Ideally retirement planning is a continuous process which evolves over time:
Early years
When you are young and starting out, your contributions towards your savings for your retirement may be limited but to reap the benefits of retirement plan you should start early.
Middle years
When you have established a sizeable source of income you are recommended to increase your contributions to your retirement plan. This approach will help you boost your savings.
Later years
Close to your retirement you set yourself to reap the benefits of savings for decades. This is the time when your start receiving the rewards to live a stress-free retirement.
How Much Do You Need to Retire?
The amount you would need for retirement is very personal depending on your financial needs and wants post retirement. Ideally, you should start investing in a retirement plan as early as possible. This will give you enough time to create a retirement corpus for a financially secure future in the long run. Once accumulation is done, the corpus can be used to purchase annuities for monthly income post-retirement. Furthermore, even after being converted to annuities, the retirement corpus can continue to grow. The annuity payouts can either be lifelong or for a certain period of time post-retirement.
Take the following things into consideration while calculating your retirement corpus –
Monthly expenses
Existing savings
Systematic investments
Inflation rate
With the above values you can use the retirement calculator to calculate your retirement corpus.
Steps to Retirement Planning
Retirement planning becomes easier when you follow a properly structured approach. Go through the 10-step retirement planning process that you must consider using:
Decide Your Target Retirement Age
Choose when you want to retire, whether that’s 55, 60, or later. The earlier you retire, the more years your savings and investments must support you.
...Read More
Define Your Retirement Lifestyle & Goals
Think about how you want to live after retirement, whether it’s living comfortably at home, travelling often or spending time on hobbies. This will assist you in figuring out how much money you will require.
...Read More
Estimate Monthly Expenses in Today’s Terms
Compute your present month-on-month spending, including household bills, healthcare, and leisure. For instance, if you spend ₹50,000 per month today, then note this figure.
...Read More
Adjust for Inflation
Make sure to factor in rising costs. With India’s inflation averaging 6–7%, your ₹50,000 today may equal ₹1 lakh in the upcoming 20 years.
...Read More
Calculate the Retirement Corpus You Need
Multiply your future monthly expenses by the number of years you expect to live after retirement. For instance, ₹1 lakh x 20 years = ₹2.4 crore. Make use of a retirement calculator to refine this figure.
...Read More
Assess Your Current Savings and Investments
Make sure to take a thorough stock of your existing savings, Employee Provident Fund (EPF), Public Provident Fund (PPF), mutual funds or pension plans.
...Read More
Identify the Gap Between Corpus Needed and Current Savings
Deduct your current assets from the required corpus. This shows the shortfall you must bridge.
...Read More
Decide Your Monthly Contribution and Asset Allocation
Set up a realistic investment amount every month and split it across equity, debt or hybrid instruments, based on your risk tolerance level.
...Read More
Select the Right Retirement Plans & Investment Vehicles
Select from options like National Pension Scheme (NPS), Unit-Linked Insurance Plans (ULIPs), pension schemes or mutual funds to build long-term wealth and generate retirement income.
...Read More
Review and Rebalance Annually
Keep a thorough track of your progress. Adjust your contributions year-on-year to remain on course. You can even consult a financial advisor for expert guidance.
...Read More
Other aspects of Retirement Planning
Along with the amount you save it’s also important to take the complete financial scenario into consideration:
Medical insurance
Health insurance needs increases with your age. It is recommended that you get adequate medical insurance coverage well before your retire as premiums are higher at an older age.
Home
While getting a home we often end up taking high amount of liability in order to secure our home. It is recommended that you completely pay off your home loan amount before your retirement so that you don’t have to bear the burden of the liability.
Estate planning
We should plan the distribution of your wealth and assets in our absence well in advance to avoid any hassle during your retirement
What are the stages of Retirement Planning?
Retirement planning in India is a crucial aspect of financial security. It involves saving and investing for a comfortable post-retirement life. The journey can be divided into three primary stages as discussed below:
Young Adult (Ages 21–35)
This is the perfect time to begin saving for retirement. Make an in-depth budget first. This will allow you to comprehend your income and spending. Set aside some, even if it is a small percentage of your income, for retirement savings. Think about making long-term investments in equities, mutual funds or employer-sponsored retirement plans.
Examine retirement plans supported by the government, such as the NPS. Moreover, it is important to understand that compounding gives your investments more time to grow if you start them early.
...Read More
Early Midlife (Ages 36–50)
Your career should be well-established by this point, and your salary could have gone up. Analyse your retirement plan and make any required modifications. Boost the amount you contribute to your retirement funds. Start making contributions to the NPS if you have not already.
Understand that re-evaluating your investing plan as well as risk tolerance level is also a prudent idea at this point. To safeguard your funds as you get closer to retirement, you might wish to switch your investments to more conservative ones.
...Read More
Later Midlife (Ages 50–65)
Make sure to maintain and increase your retirement funds as you get closer to retirement. Regularly review your portfolio and make the necessary modifications to keep it in line with your time horizon and risk tolerance. To reduce risk, think about diversifying your investments. Look at possibilities to augment your retirement income, such as reverse mortgages or annuities..
It is crucial to budget for anticipated medical costs at this point. Take into account acquiring sufficient coverage for your health insurance. Examine long-term care choices as well to handle any future needs.
...Read More
Types of Retirement Plans
Retirement planning in India can be done by investing in a range of retirement plans that can help ensure a steady stream of income to maintain a certain lifestyle post-retirement. Currently, the retirement plans in India include annuity plans, retirement funds, Unit-Linked Investment Plans and the National Pension System.
Immediate annuity plans
Annuity plans help a retired individual with regular monthly payments. How does this retirement plan work? After one has made a single lump sum investment, the annuity payout begins within a year. This option is particularly helpful for those who are nearing their retirement and require a feasible option.
...Read More
Deferred annuity plans
As the name suggests, this kind of annuity plan works differently than the one mentioned above. Here, the investor decides the time period over which they want to receive the annuity payouts. In this case, an individual makes small payments over a period of time to create a large corpus for retirement.
...Read More
Senior citizen savings scheme
This government-backed scheme offers regular income to individuals post-retirement. This type of plan can be availed by retired persons who are over 60 years or above, or even by those who fall between the range of 55 and 60 years.
The investment can be as low as Rs 1,000 in a year while the maximum investment goes up to Rs 15 lakh. The initial time period for investment is five years that can go up to an additional three years after maturity. The current interest rate for such plans is 8.2% per annum for 2023-24.
...Read More
National Pension System
NPS can be extended to individuals who fall between the range of 18 and 70 years. The tax benefits under this plan can go up to Rs 2 lakhs in a financial year and works best for those who have a moderate to high risk appetite. This is because investments are largely in market-linked instruments including equities and debt funds. Investors can also opt for corporate, government bonds and alternative investment funds. The National Pension Scheme account matures after the investor turns 60 years old.
...Read More
Best Retirement Plan in India 2025
Plan Name |
Category |
Interest/Return |
Tax Benefits# |
Eligibility |
Senior Citizen Savings Scheme |
Government-backed |
7.4% |
Deposit amount eligible for deduction under Section 80C#, interest is taxable. |
Age 60 plus (55-60 with retirement benefits) |
Public Provident Fund (PPF) |
Government-backed |
7.1% |
Contributions, the interest earned, and the maturity amount are tax free (EEE) |
Indian resident, Age 18+ |
Atal Pension Yojana (APY) |
Government-backed |
Market-linked to contributions |
Contribution amount eligible for deduction under Section 80CCD (1) |
Age 18-40 |
National Pension Scheme (NPS) |
Market-associated plan |
Market-linked (10-12% average, equity returns) |
Section 80C# + Section 80CCC + Section 80CCD(1) + Section 80CCD (1B) ₹50 lakh extra |
Age 18-70 |
Unit-Linked Insurance Plans (ULIPs) |
Market-associated plan |
Market-linked (varies by fund) |
Section 80C; Maturity tax-free subject to conditions prescribed |
As per insurer terms |
Retirement Mutual Funds |
Market-associated plan |
Market-linked (varies by fund) |
Long Term Capital Gains (LTCG)/Short Term Capital Gains (STCG) tax based on holding |
Age 18+ |
Immediate Annuity Plans |
Guaranteed pension |
5-7% typically |
Pension taxable as per the income slab rate |
As per the insurer’s terms and conditions |
Deferred Annuity Plans |
Assured pension |
Based on the annuity rate at the time of purchase |
Pension taxable as per the income slab rate |
As per the insurer’s terms and conditions |
Secure Your Retirement with Our Pension Plans
FAQ's about Retirement Planning
What is the 4% rule in retirement planning?
The 4% rule in retirement planning helps you make your funds last for 30 years. The rule states that you should withdraw only 4% of your corpus in the first year, and for every subsequent year, raise the withdrawal amount enough to keep up with inflation.
Why do you need retirement planning?
Retirement planning ensures financial security in your golden years. It helps bridge the gap between your working income and retirement expenses, fostering peace of mind and the freedom to pursue your post-workday dreams.
What are the 3 R’s of retirement?
The 3 R’s of retirement are:
1. Retirement Planning – It involves setting aside a portion of your income through your working years so you have enough to support you once you retire.
2. Regular Income – Once you retire, you should have the means to get a regular stream of income. For example, purchasing a pension plan or annuity helps you enjoy a regular income to cover your daily expenses and maintain your standard of living.
3. Risk Management – Once you retire, you must manage and mitigate risks as far as possible. You can invest in low-risk investment instruments that provide steady returns to combat the impact of inflation on your savings.
What are basic retirement plans?
India offers two types of retirement plans, Pension Plans and Annuity Plans. The two often work together to secure your finances once you retire. You can purchase a pension plan in your 20s and 30s. The money you put into the plan gets invested on your behalf and builds up a corpus for your retirement. You can then use the corpus to purchase an annuity that provides regular payouts for the rest of your life.
What are some effective ways to plan for retirement and achieve financial goals?
Strategic retirement planning involves setting realistic goals, understanding your time horizon, and choosing suitable investment vehicles. Early and consistent savings, along with regular portfolio reviews, are crucial for building a secure financial future.
What are the biggest mistakes to avoid when planning for retirement?
Common retirement planning mistakes include starting late, ignoring the impact of inflation, overexposing oneself to risky assets near retirement, relying solely on employer EPF or pension, and failing to maintain an emergency fund. Withdrawing retirement savings early also hurts financial security.
Instead, start early, diversify investments, and review plans regularly. These steps prevent inflation from eroding the impact, avoid setbacks from early withdrawals, and ensure the growth of the retirement corpus through proper diversification and risk management. Moreover, regular financial check-ups help identify and correct these mistakes before they worsen.
What is the retirement lifecycle?
The retirement lifecycle has three phases:
1. Pre-Retirement Stage – During this time, individuals are working and focusing on saving and investing for retirement.
2. Retirement Stage – Just after retirement, people in this stage rely on their investments to take care of their day-to-day expenses.
3. Post-Retirement Stage – At this stage, people may require additional support while dealing with age-related health concerns. Some individuals may require long-term care, which will only be possible through adequate financial planning in the pre-retirement stage.
How can I protect my retirement savings from market volatility and risk?
To protect retirement savings from market volatility and minimise risk, start by diversifying your portfolio across equity, debt, and hybrid funds. Gradually reduce equity exposure as retirement approaches and maintain a separate emergency fund covering 6–12 months of expenses.
Consider annuities to secure a guaranteed income portion and focus on safe investments for stability. Avoid panic withdrawals during market downturns, and adopt consistent risk management strategies to safeguard your long-term retirement corpus.
How does inflation affect my retirement savings, and what can I do about it?
Inflation and retirement savings are closely linked because rising prices erode purchasing power over time. A ₹50,000 monthly expense today may double in 12 years at an inflation rate of 6–7%. Therefore, build an inflation-adjusted corpus by investing in equities, balanced funds, and inflation-protected investments, such as increasing annuities or step-up SIPs.
Regularly review retirement plans every 3–5 years to ensure purchasing power protection and keep retirement savings aligned with real-world inflationary pressures. Moreover, planning for inflation ensures that you can maintain your lifestyle even in future years.
What is the legal retirement age in India?
The legal retirement age in India varies across sectors. The private sector does not have any stipulated age limit. For Central Government employees, the retirement age is 60, while State Government employees have to retire at 58. For Defence personnel, the retirement age depends on their rank. Soldiers in the army likely retire between 35 to 37, while officer’s can retire at 58.
What is the ideal income I need in retirement?
The amount you need once you retire depends on your standard of living and expected expenses. For example, individuals who live on rent will likely require more than those who have their own homes and only have to worry about maintenance and taxes. You can use an online retirement planning calculator to better understand how much you would require.
When is the right time to start planning for retirement and how much do I need to save to prepare?
The ideal time to begin retirement planning depends on your circumstances, but starting early maximises the effect of compounding. Determining your savings target involves factors like desired lifestyle and retirement income sources. Financial advisors can create a personalised plan.
What is deferment?
Deferment refers to the strategy of delaying retirement and continuing to work beyond the traditional retirement age. The approach helps people boost their savings and delay the withdrawal of their retirement funds. It can also help people stay active and maintain their physical and mental well-being.
What is retirement planning?
Retirement planning is a process of setting aside assets for retirement, so that one can lead a comfortable life and be financially independent even after they stop earning regular income. In a nutshell, it is a savings programme that manages assets and risks post-retirement.
What are the steps in planning your retirement?
There are a few steps that you must keep in mind while planning your retirement. The first step is to define the financial goals and the amount that is required to meet those goals. Next, evaluate the retirement date to figure out the investment horizon. You can use a retirement planning calculator to understand how much is needed to grow your wealth before retirement. The last step is to purchase a retirement plan and pay regular premiums to create a large corpus for a financially secure future.
Here's all you should know about Retirement Plans.
We help you to make informed insurance decisions for a lifetime.
Popular Searches
- term insurance plan
- savings plan
- ulip plan
- Pension Plan
- health plans
- child insurance plans
- group insurance plans
- income tax calculator
- pension calculator
- bmi calculator
- compound interest calculator
- best investment plans
- what is term insurance
- HRA Calculator
- get pension of 30000 per month
- get pension of 50000 per month
- one crore retirement plan
- monthly pension of ₹1 lakh
- Investment Calculator
- annuity plans
- retirement planning
- 10 year retirement plan
- 20 year retirement plan
- investment plan for 5 years
- Capital Guarantee Solution Plans
- money back policy
- 1 crore term insurance
- NPS Calculator
- Savings Calculator
- Gratuity Calculator
- critical illness insurance
- Whole Life Insurance
- types of life insurance
- types of term insurance
- Benefits of Life Insurance
- Endowment Policy
- Term Insurance for NRI
- Term Insurance for Women
- Term Insurance for Self Employed
- life insurance
- life insurance policy
- Benefits of Health Insurance
- Health Insurance for Senior Citizens
- Health Insurance for NRI
- best saving schemes
- NRI Retirement Plans
#Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions.
#Tax Laws are subject to change from time to time.
#Customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.
1. Amount of guaranteed income will depend upon premiums paid subject to applicable terms and conditions.
2. As per Income Tax Act, 1961. Tax benefits are subject to changes in tax laws. Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions.Tax Laws are subject to change from time to time. Customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.
3. Lock in – Applicable if Variant 2 - With Guaranteed Income variant is chosen.
4. Guaranteed Benefit is paid on survival during policy term provided all due premiums are paid during the premium payment term.
5. Allowed only after completion of 3 years from commencement of policy, upto 3 times during policy term, maximum upto 25% of the total premiums paid, subject to receipt of all due past premiums or if Waiver of Premium (WOP) benefit has been triggered
^ Source – https://www.macrotrends.net/global-metrics/countries/ind/india/inflation-rate-cpi
^^ https://npscra.nsdl.co.in/tax-benefits-under-nps.php/all-citizens-faq.php#:~:text=Any%20individual%20who%20is%20Subscriber,lac%20under%20Sec%2080%20CCE.&text=An%20additional%20deduction%20for%20investment,under%20subsection%2080CCD%20(1B).
^#https://datacommons.org/place/country/IND?utm_medium=explore&mprop=lifeExpectancy&popt=Person&hl=en
ARN - ED/08/25/26254