Timely decision-making: Secure your golden years today

After retirement, the absence of a regular monthly pay check can put a significant stress on your finances and consequently on your savings. What is therefore required is to have a sufficiently viable system in place that offers guaranteed benefits in the form of regular payouts i.e. pension. Every person looks forward to a secure retirement, when she/he can give time to long-pending personal hobbies and spend quality time with the family. However, retirement also means the absence of a regular monthly salary and the frequency of budgetary allocations. Given the fact that expenses will continue to pile up and may even increase, as medical bills and doctor-visits become more frequent, it is necessary to take sufficient measures so that a proper coverage is in place. In other words, it is important for you to start planning today for a secure retired life.

Any salaried person with a regular monthly salary or income from a regular, dependable source must buy a pension plan. In fact, owing to the importance of saving money for the retired phase of life, governmental outreach today focuses on annuity for employees of both organized as well as unorganized sectors. Thus, every individual from any sector, who wishes to build up sufficient financial coverage for herself/himself and the dependent family members, must buy a pension plan as this allows her/him to have a significant corpus in place by the time of retirement and hence, the dependence on emergency savings is limited. Vesting age is a very beneficial and flexible feature of pension plans that lets you choose the age at which you start receiving the pension. Vesting age varies from one insurer to another and from one type of pension plan to another. In case of immediate annuity, wherein a single lump-sum payment of premium is admissible, you can start receiving the pension benefits immediately. In case of deferred annuity plans, there is a waiting period (i.e. accumulation period) of 10-15 years or even more. Different insurers offer different vesting age figures and they generally vary from 40 years to 70 years or even more. This enables you to make an informed choice based on your specific requirements.

Tax saving is a crucial part of any successful financial planning and this is where investing in a pension plan can work well for you. A pension plan has a different way of taxation than a traditional investment or insurance plan. After retirement, the fixed percentage of the corpus that you can withdraw is tax exempt under Section 10D of the Income Tax Act. The amount of accumulated funds that can be withdrawn as a lump-sum (generally up to 33% of the total fund value) is exempt from taxation. Moreover, under Section 80C of the Income Tax Act, which provides an exemption of Rs. 1.5 Lac in a financial year, there is an additional exemption of Rs. 50000. Thus, having a pension plan in place allows you to save on your taxes.

HDFC Life offers HDFC Life Click 2 Retire- a retirement specific plan that offers market-linked benefits for securing your retirement goals.

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