6 Reasons to Choose Pension Plans for your Retirement
There comes a time in everyone’s life when we think about our life post-retirement. However, it is always wise to start working on it when we are young. Here is when the pension plan in India comes into the picture. The best way to secure your retirement days is to be financially independent by investing in pension plans.
What is a Retirement Plan?
A retirement plan is also known as a pension plan. It is an investment plan where the person receives the money in a lump sum or periodically. In some cases, it can be a combination of both after Retirement. The retirement plans are designed to secure your future Retirement financially.
Why Select Pension Plans in India for Retirement Age?
Here are some of the top six reasons you should choose pension plans for your retirement days.
You Get a Guaranteed Income.
The pension plan in India is exclusively designed for people nearing retirement age. These plans are not linked with the market and are liable to provide you with returns for a fixed period or the entire life. Your annuity can be either deferred or immediate based on the type of plan you choose. As a part of financial planning, pension plans as a guaranteed income help you to frame your retirement days in the way you want to.
Growth in Savings
Every person earns hard-earned money and saves it for future use in unforeseen circumstances. The new pension plans are a relief regarding financial requirements for retirement days. The earlier you begin to invest in the pension corpus, the more benefits you will be able to reap in the . These plans compound your savings for the long term.
Surprisingly, pension plans come with taxation benefits also. If your investment is up to 1.5 lakhs, you shall be exempted from tax payment under Section 80CCC. Only one-third of the amount is tax-free, and the remaining amount is taxable.
Enhancement in Insurance Covers as Well
There are a few pension plans in India that come with the availability of insurance covers. In addition, there is a range of insurance covers, including accidental death benefits, permanent disability covers, and death benefits.
Diversification in Investments
You can find some pension plans which offer you a set of asset classes depending on your profile and the amount of risk you are willing to take. You get options of equity, debt, or a mixture of both.
Safety of Assets and Savings
If there is no presence of financial arrangement, then there is a possibility that your funds are prone to leakage. However, a pension plan in Indiais a haven for all your assets and savings.
The Bottom Line
Different pension plans come with different features. You can select the best pension plans according to your needs and specifications. While preparing for your retirement days, you must ensure that you are financially sound and that your savings are secured. Pension plans combine securing your funds, providing assets, and keeping your Retirement safe.