4 Best Tips to Know Before Buying a Retirement Plan
Retirement is one of the important phases of a person’s life and symbolizes the closure of decades of a person’s professional and transition from a scheduled workforce to a family time. Therefore, a person must be able to retire, not just professionally but financially as well, which means that theperson’s savings and financial resources must be strong enough so that the lifestyle can be maintained even after absence of a regular monthly income.
This makes it very important for a person to plan the finances accordingly and start building up the monetary strength required post-retirement. This includes not just the essential expenses of the family/spouse but also the added expenses (e.g. medical bills) that may add to the cost of living after retirement
This makes it very important for a person to plan the finances accordingly and start building up the monetary strength required post-retirement. This includes not just the essential expenses of the family/spouse but also the added expenses (e.g. medical bills) that may add to the cost of living after retirement.
One way to ensure this is through buying a retirement plan in India that covers all the needs and requirements, as per the person’s need. However, knowing which plan to buy is extremely crucial because of the diversity of specific requirements. Here are four important tips that every person must know before buying a retirement plan:
Choosing a guaranteed income option:No matter how much you save during the course of your career, the option of having a regular income is very important. While searching for such guaranteed annuity products, you must make sure that the chosen plan gives you a regular income throughout your post-retirement. This will ensure financial freedom for you and your loved ones after your retirement.
Protection from inflation:Cost of living is increasing and this trend is expected to continue. This general increase in the price of things i.e. inflation is a deterrent to your income and depletes your funds. Therefore, it is very important that any retirement plan chosen by you must cover you against the inflation index. This ensures that your regular income option remains protected from the rapid market fluctuations at all times.
Economic security for spouse:It is fact that retirement, especially in single-income households/dependent spouse homes, directly affects the financial security and freedom of your spouse as well. In case of insufficient income after retirement, unexpected contingencies may arise which further cause financial woes, not just to you but to your spouse as well. Thus, choosing a plan that offers joint coverage or joint benefits to you and to your spouse after retirement is very important.
Additional benefits/complimentary investment and flexibility:Most of the salaried individuals tend to invest in traditional assets over the years and this excludes the retirement period. Any plan that compliments your existing savings and directly adds on to the monetary benefits is better suited for you. This includes any additional loyalty benefit(s) that you may garner and means a higher payout at the time of retirement.
HDFC Life offers various such retirement and pension plans that guarantee the financial freedom for you and your loved ones. For more details, check the following link:
- Should you buy life insurance after getting married?
- Retirement Calculator: How to plan an early retirement
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"The thumb rule for retirement planning is - the earlier you start, the more you save. However, with age, your priorities change too. So, you need to factor in the cost of living in the present vis- a -vis future."
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