Retirement is the new phase of life where there is no income and more of free time. This is the no-earning phase of life where you are done with most of your responsibilities and job formalities, and dreams of a carefree retirement years. It is the time when a retiree gets to enjoy their life and dreams which are always kept aside due to responsibilities and formalities. It is in your own hands to live a stress free retirement life. You can build your future life on your own terms, and thus it is wise that you plan your phase of retirement in advance. Put your savings into retirement plans and get economical coverage in the phase of retirement.
Make sure your retirement policy is good enough that you and your family receive a regular income as pension in your phase of retirement. A good retirement policy allows you to choose the retirement age and date in advance.
There are many who opt for an early retirement and live their post retirement life. Early retirement is not only for super rich people, but there are many others who just wish to end the formal life and enter the free phase of their life, i.e. the phase of retirement. There are many who feel satisfied with their life at an early age and make a shift, while managing a life where they save enough for their retirement.
If you plan to retire early from your job, then it is better to create a corpus for the phase of retirement in your life. Early retirement is not for you if you live your month on your pay cheque.
There are various plans available for senior citizens only. There are special slabs for senior citizens when it comes to income tax, including one slab for people who are over 80 years old. Most banks provide almost 0.5 per cent higher deposit interest to senior citizens on deposits which are below Rs. 1 crore.
The Senior Citizen Savings Scheme (SCSS) is only for those who are above 60 years of age. Under this scheme, one can invest between Rs 1000 to Rs. 15 lakh which pays an annual 9.3 per cent per annum returns, payable on March 31, June 30, September 30 and December 31 each year.
There is a 5 year lock-in period, which can be extended for further three years.
There are special concessions to seniors on financial instruments and travel. State Road Transport Corporations have discounted fares for senior citizens. Indian Railways also provides 30 per cent concession in all classes and trains, and also has separate counters for senior citizens to purchase tickets. The benefits does not just end here, state-run telecom service providers, BSNL and MTNL, also provide discounted tariff for senior citizens.
Things to remember while working on retirement plans:
a) Buy your insurance plan at an early age to yield more benefits in the phase of retirement.
b) This is the stage when you end up earning and move into the stage where you start to capitalize on the cash build-up. It is important to understand that your plan should meet your future requirements and the cost of premium is easy for you to afford.
c) Understand your retirement goals better like if you might plan to travel or the health relates expenses. The vision for your future lifestyle helps you a lot to think about the sort of pension you need.
Types of retirement plans-
In India, the basic retirement plans offered by the insurers are the ones where the policy holder gets a fixed return as mentioned by the insurance company along with the minimal deviation in your phase of retirement. While there are some other plans too, where the insurer invests in debt or equity; in this case the returns depend upon the market situation.
You can choose from any of the below mentioned retirement policies available in India-
- Immediate Annuity Plan-
This is the policy for those who have lump-sum cash. In this scheme, you will get the pension right form the day of payment.
- Deferred Annuity Plan-
In this scheme, the policy holder will pay the premium for certain years while he or she is working and would start to receive the pension amount after retirement.
Retirement plans or Pension plans are for the senior citizens of the family. It is a kind of financial and emotional stability to the policy holder. This way you will not have to rely on someone else to meet your basic needs in the phase of retirement. It gives you dual benefits as it insures you and gives a fixed pension amount once you retire. But it is wise to do some research on the various retirement products available in the market.