Reasons Why It Is Important To Buy A Pension Plan
Published On Jul 04, 2021
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With an increase in a person’s average lifespan, it becomes quite important to go for sound retirement planning. A majority of us believe that planning for retirement is all about focusing on the finances. However, it is about systematic management of your finances in order to save enough for your post retirement days.
Why is it Important to Purchase a Pension Plan?
The following are the key reasons behind why it is important to purchase a pension plan:
Enjoy a Stress-Free LifeAccording to your retirement goal and risk appetite, you can opt for a pension plan. For instance, you can decide to go for a guaranteed savings plan such as Canara Life’s Guaranteed Income 4Life in order to secure a pension income for life. Moreover, if you are looking forward to accumulating a large corpus till your retirement age, you can select ULIP like Invest4G. With this plan you can choose to invest in a dynamic portfolio of fixed-income and equity investments.
Regular Monthly Income SourceA regular income is a significant financial input irrespective of the amount you are having in your bank account. This assists you in maintaining a consistent and comfortable lifestyle, also it brings a certain level of certainty in life. Having a good pension plan would assist you in generating a regular income and at the same time keeping your leftover corpus safe.
Cost EfficientBeginning with your investments for retirement early with right pension plans can help you in saving a lot of money. For example, a ULIP also provides for a life cover for which there is a deduction in the monthly premium from the total corpus. However, as there is an increase in the corpus, the premium amount for life cover goes down.
Tax Benefit Post RetirementThe regular monthly pension that you get post your retirement is taxable in the form of salary income. However, when you properly plan your retirement income, you can get a huge sum of this income free from tax. Investments made in a majority of retirement and pension plans are eligible for tax benefits. Post your retirement, some of the investments such as guaranteed savings plan or ULIP can offer you with:
- Tax Free Maturity Level
- Tax Exempt Partial Withdrawal
After taking into consideration the fact that post your retirement, the financial investments that you make today would be your sole source of earning, having a good pension plan is extremely important. And, now that you are aware of early retirement planning, you can start developing your pension and retirement plan today.
Must Read: Top Ten Pension Plans in India
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.