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Reasons Why You Should Purchase A Retirement Plan?

Published On Jul 17, 2021 3:00 PM By InsuranceDekho

To live independently after your retirement, you need to do solid retirement planning. Planning for retirement requires managing your funds in a systematic way to make it enough for golden days. A plan is compulsory for retirement as you can not be working or earning forever and a pension plan can assist you during contingencies in your old age. Apart from stimulating you to save your corpus to enhance your wealth, retirement plans give you many other benefits that become actual reasons to buy a retirement plan.  

Why Should You Buy A Retirement Plan?

When it comes to retirement plans, it serves different types of benefits for policyholders in their old age. Some of them are as follow:

  • Enjoy Stress-Free Post-Retirement Life

You must select a retirement plan based on your retirement goal and risk appetite. There are several plans in the market that ensure lifelong pension income. Also, you can opt for ULIP plans to accumulate a huge tax-free corpus till the age of your retirement. Basically, retirement plans ensure a fixed income that allows you to enjoy your post-retirement life to the fullest without any worry.

  • Reliable Regular Monthly Income

No matter how much funds you own or attain in your bank account, a good amount of regular income is always considered a crucial financial input. It provides you assistance to maintain a consistent lifestyle and brings a sense of stability in life. Therefore, a good retirement or pension plan is the only way out to help you generate this constant income by keeping your corpus safe.

  • Tax Benefits After Retirement

The monthly pension received by you after retirement is also a taxable income just like the salary income. But, with a good retirement or pension plan, you can get a major part of such income without paying tax on it as most of them offer tax benefits on your investments. After your retirement, a few of these investment plans such as guaranteed savings plans or ULIPs can help you get tax-exemptions on partial withdrawals and tax-free maturity value.

  • Cost Efficient

It is highly recommended to begin your retirement investment journey as early as possible to earn the most out of your pension or retirement plans. For example, the ULIP provides a life cover by deducting a monthly premium from the accumulated corpus. It means as your corpus grows, the premium for life cover will go down. Thus, with an early start of investment in a ULIP, you can let your corpus grow faster over time by keeping the life cover cost lower.

  • Healthy Returns on Investment

The investment at an early age allows you to take more risks in your investments and aim for a higher value and growth. It is a common phenomenon that time plays a vital role in generating higher returns on your investments, therefore, retirement plans provide a good amount of returns in the long-run, if you start early, as it reduces the impact of market volatility.


Retirement plans are one of the most crucial goals of your financial planning. They provide a financial cushion for your life after retirement by providing you with a huge lump sum amount and a trusted source of regular income. The retirement plans bring a range of benefits for people which are aforementioned and we hope it will help you understand its importance. 

Also read

What Are The Different Types of Retirement Insurance Plans?

Which Insurance Plan is Best for Retirement Planning?

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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