Pension Plans: Tips to Choose the Right One

The key to a comfortable retirement is to have a healthy corpus that offers sufficient

Pension Plan: How to Choose the Right One? | Insurance Competitors

The key to a comfortable retirement is to have a healthy corpus that offers sufficient regular income. This can only be achieved through robust retirement planning and wealth creation.

Nowadays, retirement planning is one of the critical financial responsibilities of every working professional. If you avoid it, you may regret it later when you outlive your savings. Therefore, it is important to begin putting money in the best retirement plan from an early age. A pension plan is a great way to secure your life after retirement.

But, how do you choose the best one? The following tips will help you.

Inflation-adjusted Returns

One of the best aspects to determine which pension plan is best is to see if the policy offers inflation-adjusted returns. This means that the pension fund you opt for must provide returns that are not impacted by inflation by the time you retire. The value of your money must increase with the surging cost of goods and commodities.

Guaranteed Pension for you and your spouse

Living a financially independent retirement life is the main goal of getting a pension plan. But not just for you, also for your spouse. It is crucial to make sure your spouse is financially secure when you are not around.

To achieve this however, you (as a policyholder) has to check if the plan assures pension to your partner in the event of your untimely death.  Remember, good plan will guarantee that your partner continues to get a pension even when you are not around.

Flexibility

While it is prudent that you start funding your pension as soon as you get your first salary, the ability to pay a higher premium may increase slowly over the years as your salary increases. It is therefore wise that you choose a pension plan that offers you the flexibility to increase the premium payments through top-ups. Even a small rise in the premium payment every year would build your corpus fund substantially over some time.

Bonus and Other Benefits

While searching for the best retirement plans in India for pension, it would be worth evaluating if the plan gives you additional benefits; like some plans offer a loyalty bonus over a stipulated time. This will help you amass a more considerable sum in your retirement fund.

Guaranteed Income Option

No matter how much ever you save throughout your life, there is always a hazard that you will run out of money ultimately. It is therefore crucial that you get continuous guaranteed income for life. Ensure that you look for a plan that provides guaranteed income throughout your post-retirement life.

There are different types of plans that have this provision, and you can choose a plan that suits your requirement.

Make sure you calculate your retirement corpus using the pension calculator on your insurer’s website.