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5 Investment Avenues in India for Retirement Planning

Retirement planning is the best way to organize your income for happy and peaceful living after you stop working. However, it requires intense research based on your steady flow income, financial commitments, and other goals in life. Financial planning is the primary step. It will help you set aside a specific fund to save and invest for a return in the long term. The next important step is choosing the right investment plan for all your financial needs. Many investment avenues in India offer the best opportunity to save for your retirement based on your affordability and financial goals.

 

 

What is an Investment Avenue?

An investment avenue is a channel to save and invest money in the long term. It will help you earn returns from the specific investment type for ensuring financial independence in the future.

 

 

Top Investment Avenues for Retirement Planning in India
 

 

  1. Fixed Deposits: Bank fixed deposits are the most preferred investment avenue for senior citizens in India. You will have to deposit your fund in an FD for a set tenure, after which you will receive the amount along with interest earned.

     

    FDs provide liquidity and also flexibility in terms of tenure. Thus, you can spread funds across different maturities to manage the reinvestment risk instead of being locked in a particular set duration.

     

  2.  Guaranteed1 Return Life Insurance Plan: Insurers have introduced comprehensive insurance plans that provide dual benefits, life cover, and guaranteed1 returns to the policyholders. The life cover will provide a sum assured to your family members in case of your sudden unexpected demise. And the guaranteed1 returns are available as a maturity benefit.

     

    As the returns are guaranteed during policy inception, you can plan for your financial commitments with precision. It will serve your family's financial needs in your absence and assure guaranteed1 returns as a retirement solution. Tata AIA retirement plans offer a range of advantages with attractive features for your benefit.

     

    The best advantage of this plan is the varied payout options provided. You can receive it as a lump sum, a preferable combination of lump sum and guaranteed1 annual income or a regular monthly income. If you have many liabilities such as the repayment of loans, child's marriage, or higher education, you can opt for the lump sum benefit.

     

    However, if you have not made sufficient reserves for your retirement and want a regular income, you can choose the monthly income plan. You can decide the income period for the plan and set it for a specific period or the entire life until death. The plan also provides flexible premium payment options to choose from based on your financial status.

     

  3.  Post Office Schemes and Government Bonds: These options are considered extremely safe and beneficial because they are backed by the government.

     

    Some of the most prominent options are the Public Provident Fund, National Savings Certificate, Post Office Monthly Income Scheme etc. Some of the funds will be invested in securities for market-linked returns. However, it is extremely low in risk and considered the risk-averse investors. The rate of interest for such investment plans in India keeps changing but may not have a significant effect.

     

  4.  Annuity plans: Annuity plans are pension plans that provide a method to park your retirement fund for your post-retirement expenses. You can place the lump sum amount as a single payment to the plan and receive a regular monthly income for a set period.

     

    There are immediate and deferred annuity plans. The investor can make one-time or regular monthly payments to build a retirement corpus with the deferred annuity plan. You can avail of this corpus fund on maturity as a lump sum or regular income. In the immediate annuity plan, you will have to pay a lump sum fund and receive a regular income monthly, quarterly, half-yearly or annually. 

     

  5.  Mutual Funds: If you are looking for various investment avenues to provide market-related returns, mutual funds are a reasonable option. It is a pool of funds organized by many investors and managed by an Asset Management Company (AMC). The AMC will always provide professional advice and regular updates based on your fund status.

     

    It is considered one of the best options for working professionals who wish to invest for good returns from the financial markets. You can choose the fund based on your risk appetite. Mutual funds also provide the option to invest in smaller amounts regularly as a Systematic Investment Plan. You can even earn tax benefits under Section 80C of the Income Tax Act if you invest through Equity Linked Savings Schemes (ELSS).

     

     

  6. Conclusion
     

    Retirement planning is an essential part of financial planning that you should consider in the early years of your career. Many investment avenues help you make use of the right opportunity to organize your income. If you are looking for a standard secure investment option, a fixed deposit is a good option. Mutual funds are for individuals seeking market-linked returns based on the risk appetite. Post office schemes are preferred by people looking for a long-term savings solution. Annuity plans best suit people who want to park their retirement corpus for a regular income until death.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimers

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.