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Retirement is a much-celebrated milestone in an individual’s life, as it marks the end of an era. However, as much as you may be looking forward to this much-needed break after decades of working, you do have to keep in mind that your regular paychecks will also stop post-retirement.
Without having your monthly salary and yearly increments to count on, you and your family can find yourself in a lurch if you do not plan your finances.
This article will help you understand the importance of planning your finances for retirement and how plans like the insurance annuity plan can help you save.
With the rising cost of living, life post-retirement cannot be financially secure unless you plan your finances well to cater to your needs. Listed below are a few reasons that will highlight the importance of financial planning for retired life.
By planning your retirement finances, you can invest in separate insurance policies that will provide you and your family with ample coverage against medical bills.
Amongst the many options of retirement plans in India, most financial advisors suggest making investments that will support you during your golden years. One such investment is getting an annuity plan.
For this very reason, it is best to aim for financial freedom, using retirement investment plans to enjoy a stress and guilt-free life.
Now that there is clarity on why it is important to plan for your retirement, the next step is to understand the factors you should consider in how to plan for your retirement.
Your age will directly impact the amount you would need to invest annually towards creating a retirement corpus. The sooner you start saving for your retirement, the less it will burden you at a later stage.
For example, if you start putting aside ₹5000 every month towards your retirement corpus at the age of 25 years, you shall be able to collect at least ₹75 lakhs with compounded interest by the time you retire at 60. On the other hand, if you start saving for your retirement at the age of 40, collecting ₹75 lakhs will require you to put aside at least ₹25,000 monthly.
For you to decide on how much your retirement corpus should be, you will have to calculate your monthly expenses and factor in costs like medical treatment, inflation, and contingency funds. You can turn to a financial consultant to help determine the final amount and work on your investments accordingly.
There are plenty of pension plans available in the market for you to choose from. You should select a plan that suits your needs and can be supported by your income. Investing in an immediate annuity plan is one such option. The immediate annuity plan allows you to invest a lump sum of money and begin receiving the payouts immediately. This is a great option for people who are either retired or close to their retirement age, as you only have to pay the premium amount once.
Retirement is a phase in life that you should be able to cherish instead of having to worry about money. The best way to ensure that your golden days are happy is to plan your finances in a manner that allows you to continue living life as per your standard of living.
Tata AIA Life Insurance retirement solutions offers you a choice of insurance policies that cater to every phase of your life. Amongst those policies is the insurance annuity plan, which provides you with the needed financial support to enjoy your retirement.
For more details on the retirement plans from Tata AIA Life, get in touch with us today!