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Advantages of Buying a Retirement Plan

Published On Aug 28, 2021 12:00 PM By InsuranceDekho

A retirement plan is a life insurance policy investment type that ensures financial independence post-retirement. One of the key features of a retirement plan is that they help in securing a safe investment while ensuring no impact of market fluctuations. You can either choose to invest in a retirement savings plan or a retirement annuity plan. It is advisable that you analyze your specific requirements before buying a retirement plan. Note that if you choose to invest in a retirement savings plan, you will receive a lump sum amount as your retirement fund on the plan maturity. However, if you plan to choose a retirement annuity plan, you will get a regular amount every month, quarter, 6 months or a year starting either immediately or at a later period based on your needs. 

Advantages of Buying a Retirement Plan

Some of the prime advantages of buying a retirement plan are:

  • Regular Income After Retirement

One of the biggest advantages of a retirement plan is that it provides salaries after retirement. With a vast range of retirement plans available in India, a policy buyer can buy one of the best plans that suit their requirements the best. Keep in mind that you may find some plans offering you long-lasting pay, there will also be a few plans that offer better returns.

  • Financial Support at the Time of Need

A key advantage of retirement plans is that they ensure that you are financially stable at the time you need them the most. Be it buying a house, getting your children married or any other need, a retirement plan can help in fulfilling all, if planned in a strategic manner. 

  • Tax Benefits

Investing in a retirement plan is beneficial in multiple ways. One of the prime advantages being tax benefits. Buying a retirement plan early in life can help you enjoy tax benefits as per Section 80C of the Income Tax Act.

  • Insurance Cover

Your retirement plan will not only help you secure your financial future post-retirement, but also provide you insurance cover. In the case of the unfortunate death of the policyholder, their surviving life partner does not have to struggle due to lack of money. 

  • No Impact of Inflation

Your retirement plan will ensure that you are not affected by inflation. You will be able to lead a comfortable and fulfilling life without compromising on your different needs no matter how high the inflation rate may be.

When Should I Buy a Retirement Policy?

When it comes to retirement planning, it is always advised to start early. Beginning early has its own advantages since one gets more opportunities to develop profit. You will not only get better returns on your savings but also help in supporting your loved ones without having to face financial struggles. The best thing is that with the power of compounding, you will be able to expand your benefits. 

One must always remember that the late they become in buying a retirement plan, the more they have to invest. With the passing age, it will become harder for you to keep money aside for your retirement plan. Waiting too long for retirement planning may even lead you towards postponing your retirement.

Also Read:  

Which Riders are Suitable For Retirement Plans?

How Can a Rider Make Your Term Insurance Plan More Efficient?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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