What Are the Steps of Buying a Retirement Plan?
Published On Jul 31, 2021
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Retirement insurance is a must for every person who wants their life post retirement to be peaceful. One of the best ways to ensure financial stability even after quitting the ultimate source of income, retirement plan is the need of every individual who does not wish to depend on their family members to get their financial needs met. If you understand the importance of retirement insurance and wish to buy one as soon as possible, it would be a must for you to know the steps involved.
Steps of Buying a Retirement Plan
The steps of buying a retirement plan include:
- Setting a Budget - Start with making a budget. Prepare a list of 30 things based on priority and categorize them into short, medium and long term goals. Allocate your current income so that you can get an estimate.
- Evaluate Your Current Financial Position - Examine your current financial position in comparison to your financial goals. Make sure you are more proactive about savings, investments in addition to income.
- Identify Your Income Sources - It would be a must for you to consider all your income sources. Keep in mind that all income sources would include insurance, investment portfolios, assets, along with an option to take up a part-time job to take charge of your retirement funds. In case you find yourself running short of funds, make sure you re-evaluate your investment, make optimum contributions to fill the gap.
Things to Consider Before Buying a Retirement Plan
Some of the prime things you should keep in mind before buying a retirement plan are:
- The rate of inflation should be less than the ROI (return on investment).
- Does your chosen plan give adequate pension income after your retirement? Will it be sufficient for you and your family? Will it be enough for your loved ones in case of your demise?
- Does the plan give guaranteed return on investment and low-risk corpus to help you fight the market risk?
- The vesting period should meet your specific requirements.
- Your retirement plan should come with an annuity alternative that is most perfect for you.
- You are not spending more capital on taking a savings plan and comparing all the options available to end up with an informed decision.
- The need for involving a financial planner should never be underestimated. Keep in mind that a financial planner will help you at each step and guide you properly through the process.
You may, at times, feel that you don’t need to think of buying a retirement plan at the present time. But, don’t let this thought prevent you from buying a retirement insurance policy. Remember, the early you start retirement planning, the better it will be for you in the future.
If you have any doubts regarding retirement insurance or want to know about some of the best retirement plans in India you can choose from, feel free to contact one of our InsuranceDekho experts at 7551196989.
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.