When it comes to life, there are various ups and downs that you need to face throughout your journey in this world. You might face several circumstances soon that may call for the need of a significant amount of monetary resources.
Even if you don’t fall prey to such situations, you’ll likely have to retire someday and depend on your existing capital for the rest of your life. With that said, it is extremely crucial to accumulate funds in your employment days to live a comfortable life afterward. This can be done by investing in a good retirement plan.
There are several investment schemes available in India that help you save your capital. However, if you’re specifically looking to accumulate a corpus for your post-retirement days, pension plans certainly fit the bill for you.
In this article, you’ll know everything about pension plans, from their precise definition to the compilation of best bets available in the market as of now. Therefore, make sure you read it till the end for efficient retirement planning.
What is a Pension Plan?
Often termed as retirement policies, pension plans are financial investment instruments that provide you the combined benefits of insurance cover and capital investment. It requires you to invest a defined amount of money periodically in exchange for certain benefits.
The invested amount will be utilized in accumulating a considerable amount of capital through a phase-by-phase approach. Once you retire from your regular job, this collected corpus will ensure a steady flow of funds to help you manage your daily expenses without depending on anyone.
Among the various types of pension plans available, public provident funds are the most popular in India. Moreover, through a well-picked plan, you can also beat the rate of inflation with the power of compounding and live a comfortable life afterward.
Who Needs Pension Plans?
It is suggested that every individual who is looking for a financially secure lifestyle after their retirement should consider investing in a pension plan. Whether you’re already retired or currently in your 30s, you should begin investing in this plan if the former is true for you.
As these plans are intended to serve as a secondary source of income, they’re also crucial for people who cannot depend on anyone for their daily necessities. These are often less risky as compared to various other types of investments.
Therefore, if you’re conservative with your savings and have some specific goals after your retirement, you should invest in these plans. With various fund options available, you can easily accumulate a good amount of capital for your future.
Furthermore, pension plans are also eligible for tax benefits. Therefore, if you are looking for an investment opportunity specifically to save money on taxes, you should surely consider investing in these plans.
Best Pension Plans Available in India
While there are various investment options available to plan for your retirement, only a handful of schemes have gained enough credibility to be featured on this list. By combining the below-given options with a retirement planner calculator, you can easily choose the one that fits the bill for you:
1. Canara HSBC OBC Pension 4 Life
Being one of the most popular pension plans in the market, the Pension 4 Life plan offered by Canara HSBC OBC is an all-around solution to tackle the various ups and downs that are likely to occur during your post-retirement period.
This plan provides a great variety of choices in terms of annuity options, ranging from immediate and deferred options, based on your preferences. Moreover, all the returns associated with the plan are transferred directly to your bank account for added convenience.
2. HDFC Life Click 2 Retire
The Click 2 Retire policy by HDFC Life Insurance is an online ULIP scheme that invests your capital in market-related funds to provide returns that’ll be used to grow your primary capital and accumulate a supple amount for a comfortable retired life.
The plan is available at a very affordable price, and as it can be purchased online, the process of zeroing in on this policy is extremely simple with a minimal amount of paperwork required. It provides guaranteed assured gains and vestige benefits for a satisfying investment experience.
3. LIC Jeevan Nidhi Plan
From the pioneer of financial investment products, the Jeevan Nidhi Plan by LIC is a pension plan that aims to create a second source of income after your retirement. The plan offers tax-saving benefits on the premiums paid towards the policy by offering a deduction of up to 1.5 Lakhs.
Additionally, all the profits accumulated through the investment are kept by you for the first five years of the policy, after which the plan also takes part in the profits. It offers a minimum assured sum of Rs. 1 Lakh with no upper limit at all.
4. ICICI Pru Easy Retirement
If you’re looking to invest your capital in market-linked instruments without risking your primary capital, the easy retirement plan by ICICI Pru certainly fits the bill for you. It provides a regular monthly income after the end of your policy tenure to manage your post-retirement expenses.
The plan offers attractive returns in the long term and keeps your capital protected from fluctuating market conditions. Moreover, it also offers great flexibility by allowing you to choose from several payment frequency modes.
Retirement is the most comfortable phase of an individual’s life, provided that they have access to all the necessities and financial resources. If you haven’t invested in any pension plan already, this is the right time to do so.
The plans stated above are some of the best picks available in the market, which offer promising returns and help you plan for your retirement efficiently. Using the retirement calculator along with the shortlisted options above, you’ll surely find a plan that resonates with your retirement goals.