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Is Early Retirement Planning Worth It?

Updated On Jan 04, 2022

One of India's most well-known retirement planning initiatives is the Public Provident Fund. When you start contributing to your retirement fund early in life, the funds will grow over time to provide you with a financially secure golden year. With a well-chosen retirement plan, compounding can help you rise above inflation.

Everyone should put money into pension plans to secure financial security in retirement. Section 80C of the Income Tax Act of 1961 covers a variety of retirement programmes, allowing taxpayers to claim tax deductions of up to Rs.1.5 lakh. Any plan you choose must be in line with your investment goals (or retirement plans). If you intend to retire early, for example, your savings should be sufficient to keep you afloat during your golden years. As a result, selecting a retirement plan wisely is essential.

The Advantages of Investing in a Retirement Plan

The following are some of the reasons why you should consider retirement plans:

1. Advantages In Terms of Saving Money

Finally, double-check that it is on your term schedule. You want to save as much money on taxes as possible because your investment alternatives are restricted in your 60s (you cannot invest in high-risk options).

As a result, tax advantages should be included in your term plan so that you can reduce your tax burden while boosting your revenues. The amount guaranteed to your nominee should be tax-free as part of your insurance policy.

2. Income Security For Spouses

If your spouse is financially depending on you once you retire, you must ensure that they live comfortably while you are gone. To make this happen, you must choose a term plan that allows you to choose how you wish to receive your death benefit.

3. Creates A Savings Habit

A retirement plan, often known as a pension plan, is a specialised strategy for building a corpus to cover post-retirement needs. To keep your retirement plan active, you must pay your premiums on schedule. Regular premium allocation ensures that you save the necessary amount on a regular basis in order to provide yourself with a worry-free and financially secure retirement.

Traditional pension plans, as well as unit-linked retirement plans, are offered. Investors can create a portfolio based on their risk tolerance, which can range from aggressive to balanced to cautious. It enables you to save for retirement while also ensuring your family's financial security. Paying a top-up premium on a unit-linked retirement cum insurance plan with an increase in income will help you save more.

4. Debt And Loans 

If a person takes out a loan and then dies unexpectedly, the looming debt can be devastating to the family, especially if he or she was the family's sole source of income. If you leave a debt for your spouse and children to pay off, it's hardly the finest way to be remembered. The family will be debt-free after repaying the loan with the money they would get following the deceased's death.

5. Included Is Medical Coverage.

The age of a person has a significant impact on their medical insurance premiums. The cost of health insurance rises as a person becomes older. It is thus recommended to purchase senior citizen medical insurance early in order to save money on premiums.


By acquiring a term insurance policy for your spouse, you may ensure that he or she will be able to meet his or her goals and aspirations even if you are no longer alive.

Also read - How To Plan Retirement In Your 40s?

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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