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Retirement And Pension Plans

Retirement and pension plans are types of life insurance that are designed to help you after retirement. In exchange for regular contributions to pension funds, ... these plans either provide periodic payments (pension) or a lump sum payment at maturity. After retirement, periodic payments or a lump sum will allow you to maintain your standard of living, cover your day-to-day expenses, and pursue your dreams. The retirement plans help you cover your expenses and secure your future so you can enjoy your golden years.

In this policy, the investment risk in investment portfolio is borne by the policyholder.

Pay ₹1 Lakh/year⁹
Get ₹6.69 Lakh lifetime annual pension

Build retirement corpus with
top rated funds¹
Zero premium allocation charges
Withdraw fund for emergencies²

⁹Illustrative Returns: @4%: ₹3.66 Lakh. @8%: ₹6.69 Lakh
Policy Term: 25 years. Past performance is not indicative of future performance. T&C apply. The linked insurance product do not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.

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What are Retirement/Pension Plans?

The purpose of retirement plans is to provide you with a reliable income stream even after you stop working. There are two general types of pension plans:

Pension Plans:
With pension plans, you can save funds systematically, ensuring a steady income in retirement. In a pension plan, you can make regular payments or pay a lump sum. When you retire, you get regular payouts that help you stay financially independent. The best pension scheme in India also protects you against inflation, so you can live comfortably after you retire.
Annuity Plans:
In an annuity plan, you receive regular income payments for the rest of your life. Annuity plans have a phase called accumulation. During this time, you continue paying the premiums. After you retire, you can buy an annuity with these accumulated funds. With the best annuities, you get regular payments according to your plan's terms, ensuring your financial stability for years to come.

Tata AIA’s Best Selling Retirement Plans

Tata AIA

Smart Pension Secure

New

Key benefits:

Build retirement corpus with top rated funds¹
Zero premium allocation charges
Withdraw fund for emergencies²

Calculate Premium Know More

Non-Participating, Unit Linked, Individual Life Insurance Pension Plan
(UIN: 110L182V06)

Tata AIA

Fortune Guarantee Pension

Key Benefits:

Get guaranteed³ regular income post-retirement
Avail loan against the policy
Get tax benefits⁴ as per applicable tax laws

Calculate Premium Know More

Non-Linked Non-Participating Individual Life Insurance Plan
(UIN:110N161V14)

Retirement Planning Calculator

Total amount required for retirement

₹2.98 Crore

Monthly saving to accumulate this amount

₹31,334

What is retirement planning calculator

Retirement calculators are online tools that calculate how much wealth you'll need when you retire. It also helps you plan investments based on your retirement corpus requirements.

In general, it serves two purposes:

It shows you how much funds you will need after retirement to maintain your current lifestyle.
It helps you estimate the returns on your investments and how much you need to invest for retirement.

Why you should start a retirement plan in India

Since inflation has been on the rise, family dynamics have changed, and there is no social security system in India, planning your retirement is extremely important. The following are reasons why you need a retirement plan:

Job market uncertainty and early retirement trends

Increasing layoffs and health problems associated with stress and burnout are causing Indians to consider early retirement. When considering early retirement, it's important to consider its financial, emotional, and psychological challenges. If you retire early, you ought to have an adequate retirement corpus so that you don't have to worry about financial problems. Depending on your financial needs and your current age, you should select the best retirement plan to build your corpus.
The rising cost of healthcare

The Global Medical Trend Rates Report 2025 predicts a 13% increase in healthcare costs in India by 2025¹⁰. After retirement, you will need funds to cover your medical expenses. Individual health insurance will help cover major expenses, but you will need to set aside some funds for long-term care costs and any associated medical costs. Such costs can be covered by a retirement or pension plan.
Rising life expectancy

For at least a decade, India's life expectancy has been increasing. Life expectancy in India is expected to increase with improved living and healthcare standards. A rising life expectancy raises the question of how you will maintain your standard of living after retirement. 57% of urban Indians believe that their retirement savings will be exhausted in just 10 years after retirement, according to the 4th edition of the India Retirement Index Study. When you have a retirement plan with a long-term goal of building corpus, you will ensure that you have adequate funds to meet your financial needs in retirement.
Increasing living costs

The cost of goods and services gradually increases as inflation occurs, so your current savings may not be enough in the future. As per the Government of India (Ministry of Finance), retail inflation11 in India as measured by the Consumer Price Index (CPI) in 2024-25 stood at 4.6%. Even as costs rise, you can maintain your standard of living by investing in retirement plans. Prepare in advance so that you can afford essentials and other expenses post-retirement.
Tax advantages

Various retirement plans, such as the Public Provident Fund (PPF), the National Pension System (NPS), the Employees' Provident Fund (EPF), and life insurance plans, offer tax deductions⁴ under Section 80C, Section 80CCD, and Section 10(10D), allowing you to save for your retirement while reducing tax burdens.
Family shift from joint to nuclear

Traditionally, Indian retirees relied on their children for financial support. Now, nuclear families are a significant majority of households. Since nuclear families are on the rise, it's important to prepare for financial self-reliance with a long-term investment strategy.
Absence of a universal social security scheme

All citizens in India do not have access to a robust government-funded pension system. In most cases, citizens rely on personal savings, employer-sponsored pension plans, or private retirement plans to support themselves after retirement.

Importance of retirement plan in India

Inflation rates have increased the living expenses dramatically over the years. This means you need to account for future living expenses and accumulate a significant amount of savings to sustain yourself over your retirement years.

Here are some reasons why a retirement pension plan could be the reliable solution to living a stress-free lifestyle in your post-retirement years:

It is a disciplined, affordable, and secure method of retirement planning that can be started at any time.
You are offered a guaranteed³ income after retirement to cater to your financial needs.
You can secure your family members in the form of a death benefit along with your retirement savings.
You can choose between investing in a market-linked pension plan or a conventional pension plan, depending on your investor profile.

How does a retirement plan work?

Pension plans in India are designed to help you accumulate savings during your working years, ensuring a steady income after retirement. These plans generally have two key phases:

Accumulation phase

In this phase, you make regular premiums towards the pension plan. Over time, these investments grow through compounding, helping you build a retirement corpus. With Tata AIA pension plans, the payments can be a one-time lump sum payment or regular/limited payments equal to the policy term. These are paid to your account to accumulate interest over time.
Distribution phase

Once you reach the predetermined retirement age (commonly 60 years), known as the vesting age, you start receiving regular pension payments in the form of an annuity from the accumulated corpus. You have two choices when you reach this phase: start receiving your pension payouts or withdraw your earnings and buy an annuity plan.

The annuity plan must be bought from the same insurer you bought your pension policy from. Moreover, the minimum vesting age in India is 30 - 40 years, while the maximum vesting age is 80 years. As a policyholder, you can choose any appropriate vesting age between the minimum age and the higher limit to start getting the benefits.

Some of Tata AIA's pension plans also allow you to increase your annuity through top-up premiums. Namely, the Tata AIA Fortune Guarantee Pension.

Let’s understand both phases with the help of an example:

Accumulation Phase

Let’s say

You are 30 years old.
You purchase a Pension Plan.
You invest ₹5,000 every month for the next 30 years (till age 60).
These regular contributions grow over time through compounding.
By age 60, your accumulated corpus becomes, say, ₹40 lakhs

Vesting Phase

At the age of 60 (vesting age), your pension plan matures.
You withdraw a part of the corpus as per policy rules (many plans allow a 1/3rd withdrawal).
The remaining amount is used to buy an Annuity Plan.
You start receiving a monthly pension, for example, ₹25,000, for the rest of your life.

Tata AIA Life Insurance Retirement Plans

Tata AIA
Smart Pension Secure

TATA AIA
Fortune Guarantee
Pension

Tata AIA
Fortune Guarantee Retirement Ready

Tata AIA
Saral Pension

Tata AIA
Smart Annuity Plan

Types of pension plans

Government-Backed Pension Schemes

Pension Scheme	Key Features/Description
Public Provident Fund (PPF)	• Government-backed fixed returns • 15-year lock-in period • EEE tax⁴ benefit – investment, interest & maturity tax-free⁴ • Ideal for long-term goals, especially retirement • Requires long-term commitment • Suitable for safe, tax-free⁴ savings
Employee Provident Fund (EPF) & Employee Pension Scheme (EPS)	• EPF gives fixed returns on employee + employer contributions • EPS provides fixed pension after retirement • EPS pension may be limited for full expenses • EPF is mandatory for most salaried employees • Suitable for salaried individuals seeking retirement income
National Pension Scheme (NPS)	• Government-backed retirement scheme • Invests in equity and debt for market-linked returns • At retirement: 60% lump sum withdrawal, 40% annuity purchase • Maturity proceeds partially taxable • NPS Calculator helps estimate returns • Suits long-term investors comfortable with market exposure
Atal Pension Yojana (APY)	• Guaranteed³ fixed pension from age 60 • Pension options: ₹1,000–₹5,000 per month • Contributions: monthly/quarterly/half-yearly • Eligibility: 18–40 years • Targets unorganised sector • Suitable for those seeking stable government-backed pension
Pradhan Mantri Vaya Vandana Yojana (PMVVY)	• Eligibility: Individuals aged 60+ • 10-year policy tenure • Monthly pension: ₹1,000–₹9,250 • Fixed return of 7.40% p.a. • Designed for retirees seeking guaranteed³ income
Senior Citizen Savings Scheme (SCSS)	• Guaranteed income for individuals above 60 years • Interest rate: 8.2% (revised quarterly) • Min investment: ₹1,000; Max: ₹30 lakh • 5-year tenure; extendable by 3 years • Tax⁴ benefit under Sec 80C; interest taxable • Suitable for low-risk senior citizen investors
Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM)	• Voluntary pension for unorganised workers • Eligibility: 18–40 years, income ≤ ₹15,000/month • Guaranteed³ pension: ₹3,000/month post 60 • Spouse receives 50% pension upon death • If death before 60: spouse may continue or withdraw lump sum • Designed for low-income workers needing retirement support

Private Pension Plans

There are two types of private pension plans: annuities and pension plans with life cover.

Annuity plans

The purpose of annuities is to provide individuals with a regular monthly payout after they retire. Listed below are the different types of annuity plans:

Annuity Type	Key Features/Description
Deferred Annuity	• Accumulates a retirement corpus through regular or single premiums • Pension starts after the policy tenure ends • Offers tax⁴ exemption • On withdrawal: 1/3rd of the corpus is tax-free⁴; remaining 2/3rd is taxable • Locked-in investment; cannot be withdrawn for emergencies • Suitable for investors making regular or lump-sum contributions
Immediate Annuity	• Pension starts immediately after paying a lump-sum amount • Offers multiple annuity options • Premiums are tax-exempt⁴ under Income Tax Act, 1961 • Nominee receives benefits if the annuitant dies during the policy period
Annuity Certain	• Pays annuity for a specific number of years chosen by the annuitant • If the annuitant dies before the period ends, the remaining payments go to the beneficiary
Guaranteed³ Period Annuity	• Provides annuity for a fixed tenure (e.g., 5, 10, 15, 20 years) regardless of survival • Payments continue for the entire guaranteed period even if the policyholder passes away
Life Annuity	• Provides pension to the annuitant for life • Option available to continue pension to spouse after the annuitant’s death ("with spouse" option)

Pension Plans with Life Cover

Plan Type

Key Features / Description

ULPPs (Unit Linked Pension Plans)

• Money remains invested for the entire lifetime of the insured

• Partial withdrawals allowed after retirement; withdrawals are tax-free⁴in whole-life ULPPs

• Additional withdrawals can be made as needed

• Market-linked returns⁸ based on fund performance

• Suitable for individuals seeking both growth and flexibility during retirement

Traditional Plans

• Can be participating (earn bonuses) or non-participating (no bonuses)

• Investments mostly in conservative, low-risk instruments

• Provide moderate but stable returns

• Generally offer guaranteed³ or assured returns

• Minimal life cover, as the primary focus is building retirement corpus

• Suitable for risk-averse investors seeking stable retirement savings

Here is the detailed explanation of each plan:

Deferred Annuity

A Deferred Annuity plan allows individuals to build a retirement corpus over time, by making regular or lump-sum premium payments. The pension or annuity starts only after the completion of the policy term. This plan is suitable for those who want to accumulate savings over the long term and start receiving regular income after retirement.

Immediate Annuity

With an Immediate Annuity plan, the policyholder receives pension payments immediately after paying a lump-sum amount to the insurance company. This plan is suitable for individuals who have a retirement corpus ready and want to start receiving regular income without any waiting period.

Life Annuity

Under a Life Annuity plan, the policyholder receives pension payments regularly for as long as they live. If the policyholder opts for the 'with spouse' option, the pension continues to be paid to the spouse after the policyholder's death, ensuring financial security for both.

Guaranteed Period Annuity

This plan provides pension payments for a fixed period such as 5, 10, 15, or 20 years. These payments are made irrespective of whether the policyholder survives for the entire period. If the policyholder passes away during the guaranteed period, the payments continue to the nominee or beneficiary.

Annuity Certain

An Annuity Certain plan allows the policyholder to choose a specific period during which pension payments will be made. If the policyholder passes away before the completion of this period, the remaining payments are given to the nominee, ensuring the family’s financial stability.

Public Provident Fund (PPF)

PPF is a government-backed savings scheme that offers fixed returns with complete tax benefits. It comes with a lock-in period of 15 years, making it suitable for long-term savings and retirement planning. PPF provides secure, tax-efficient growth for individuals seeking low-risk investment options.

Employee Provident Fund (EPF) & Employees' Pension Scheme (EPS)

EPF is a retirement savings scheme where both the employee and employer contribute a fixed percentage of the employee's salary. EPF offers fixed, government-backed returns. A portion of the EPF contribution goes towards EPS, which provides a fixed monthly pension after retirement. These schemes are compulsory for many salaried employees and help build a stable retirement corpus.

Pension Funds

Pension Funds are long-term investment schemes regulated by the Pension Fund Regulatory and Development Authority (PFRDA). These funds aim to provide better returns upon maturity compared to traditional options. They also allow partial withdrawals during the accumulation stage, which can be useful during financial emergencies.

Whole Life ULIPs

Whole Life ULIPs (Unit Linked Insurance Plans) keep the money invested for the entire life of the insured person. They combine life insurance coverage with market-linked investments. After retirement, partial tax-free withdrawals can be made to meet financial needs, offering flexibility and long-term wealth creation.

Defined Benefit Plans

Defined Benefit Plans guarantee a specific retirement income based on a formula that considers the employee's salary and years of service. The employer is responsible for funding the plan and bears the investment risk. These plans provide stable, predictable income after retirement.

Defined Contribution Plans

In Defined Contribution Plans, both the employee and employer contribute a fixed amount towards the retirement fund. The final retirement amount depends on the total contributions made and the investment returns earned over time. Unlike Defined Benefit Plans, the final pension amount is not fixed, but these plans offer more transparency and flexibility.

National Pension Scheme (NPS)

The NPS is a government-backed pension initiative that invests contributions in a mix of equity and debt funds to generate market-linked returns. At the time of retirement, 60% of the accumulated corpus can be withdrawn, while the remaining 40% must be used to purchase an annuity that provides regular income. It is suitable for individuals seeking a low-cost, long-term retirement option.

Features of pension plan

Here are some prominent features of retirement pension policies from Tata AIA:

A Steady Flow of Income

When you invest in a retirement pension plan, you receive a regular income as per the plan of your choice.

For example, in the case of a deferred annuity plan, you begin receiving the fixed, regular income at a later date (post deferment period), while in an immediate annuity, this benefit is paid out soon after you start the investment. A retirement calculator can be a useful tool to help you calculate this amount.
Tax Benefits

Pension plans in India are eligible for tax⁴ deductions under applicable tax laws. This specific tax deduction will depend on the type of retirement pension policy you choose.

Most plans offer tax deductions on your annual premium payments, allowing you to reduce your taxable income in the year you make contributions. Under some plans, your investments are tax-exempt, allowing them to grow without immediate tax consequences. Moreover, death benefits received from a pension policy due to the insured person's death are tax-exempt.
Payout Period

The time during which you get the benefits of your pension plan is known as the payment or payout period. If you choose to receive payments between the ages of 65 - 80, the payout period will be 15 years.

In some pension plans in India, you can choose the payout/income period as per the options under the plan. At Tata AIA, you can opt for a Life Annuity under our plans, where you will receive payments for as long as you live.
Avail Loans

Tata AIA pension plans allow annuitants to get a loan against their policy. The terms under which you can get avail loans are subject to policy conditions. For example, under a Joint Life option in our Fortune Guarantee Pension Plan, the primary annuitant can take a loan six months from the commencement date. If the primary annuitant dies, it can be availed by the secondary annuitant.
Liquidity in Retirement Plans

As stated, upon policy maturity, you can opt to withdraw the pension plan benefit or purchase an annuity plan. Some annuity plans also offer a return on the purchase price. This means the benefits of your pension plan will also include the purchase price which was paid for the annuity plan.
Surrender Value

This is an amount the insurance company will pay you if you ever decide to "surrender" or discontinue your plan before it reaches maturity. In simple terms, you can choose to cash out your pension policy.

This amount will be stated in your policy wording and available only if you have held your pension plan for a minimum number of years. Remember to check your policy terms before purchase to ensure you get properly compensated if you want to discontinue your policy.

Benefits of Retirement Plan

Guaranteed^* Returns Benefit

Under your retirement pension plan, you will begin receiving guaranteed³ income benefits from the distribution phase. This means you do not need to worry about any delays in getting a regular income stream once you retire.
Financial Security for Your Family

In case of your untimely demise, any applicable death benefit under your pension policy will be paid out to your family. In the case of a Joint Life annuity plan, the second annuitant continues to receive the annuity after the death of the first annuitant.
Flexible Premium Payment Terms

Most pension plans in India offer flexible premium payment modes and terms you can opt for under your policy. This way, you can pay when you can at your desired frequency. Tata AIA pension plans offer Single/Regular/Limited payment modes.
Creation of a Stream of Regular Income

Once you retire, your pension policy steps in to help you afford daily expenses in place of your salary. These pension payouts can be received as a lump or monthly income to ensure your savings last throughout your retirement.
Get Tax Benefits

The best retirement plans in India offer several different tax deductions and exemptions depending on the type of pension policy you buy. This means Tata AIA pension plans are also eligible for tax⁴ benefits under applicable tax laws.
Customise your Retirement Plan

Though your retirement plan should be able to suffice for all kinds of emergencies, you can still enhance your policy coverage with optional rider benefits. Keep in mind that any additional top-ups or add-on riders will require additional premium payments under your policy.

Comparison of Tata AIA retirement plans

Below is a comparative overview of the Tata AIA Fortune Guarantee Pension Plan and the Tata AIA Smart Pension Secure Plan:

Parameter	Tata AIA Fortune Guarantee Pension Plan	Tata AIA Smart Pension Secure Plan
Premium Mode	Single premium and limited/regular premium options	Regular premium payment only
Annuity Type	Immediate and Deferred annuity options available	Deferred pension plan (benefits at vesting/maturity)
Features	Multiple annuity options: Single or Joint Life Return of Purchase Price (ROP) on death Increasing annuity options	Offers: Loyalty Additions Maturity Boosters Waiver of Premium Optional rider for outpatient medical expenses
Returns	Guaranteed annuity payouts for life	Market-linked returns via unit-linked funds (ULIP-based)
Tax Benefits	Eligible for tax benefits under Section 80CCC/80C and 10(10A), as per prevailing laws	Eligible for tax benefits under Section 80C and 10(10D), as per prevailing laws

How much do I need to save for retirement?

An important aspect of retirement planning is estimating how much you will need in retirement. There is no fixed number because it depends on several factors, including age, lifestyle, financial goals, and others. To determine how much you need to save for retirement, consider the following factors:

Retirement age and current age

The number of years it will take you to build up your retirement corpus through compounding depends on your current and retirement age. You will have to invest less, if you start investing at an early age, to reach your desired retirement income.
Calculate your daily living expenses

Calculate the amount you spend per day on food, utilities, transportation, and medical care. Estimate future costs, keeping in mind inflation. By building a realistic retirement corpus and estimating your costs correctly, you will not face any financial hardship after you retire.
Major life events and milestones

Retirement does not mean that major expenses stop. You may still need to pay for the education of your kids, weddings, or other important occasions. By factoring these fees into your retirement plan, you can be sure you are adequately prepared financially for these one-time but substantial expenses.
Post-retirement lifestyle and residence

Consider your personal goals when planning for retirement, such as taking up hobbies, travelling, or launching a small business. While these goals bring happiness, they also cost you. Planning for these ensures a fulfilling retirement that fits your desired lifestyle. It is also important to consider your city of residence because metros and tier 1 cities can have a high cost of living.
Expenses associated with medical emergencies and healthcare

With increasing age comes a host of unexpected crises and growing medical expenses. An emergency fund guards your retirement money against sudden depletion so that you may meet emergencies without denting your regular income.
Inflation and its impact over time

The value of money gradually declines as living expenses rise due to inflation. For example, if inflation is 5%, things you can buy now for Rs. 6 lakhs might cost you around Rs. 14.38 lakhs in 20 years. If your retirement corpus is adjusted for inflation, your savings should cover future expenses.
Retirement savings and additional income sources

Retirement income does not only come from savings. Dividends, pensions, rental income, or part-time employment can supplement your income. By easing the burden on your retirement corpus, these sources of income can help you enjoy a more comfortable and secure retirement.
Expected rate of return

Depending on the expected rate of return, you can calculate how much and when you can accumulate retirement funds. Depending on which retirement plan you choose, you'll get a different rate of return.

Who should invest in a retirement pension plan?

Anyone planning to retire one day or who lacks sufficient corpus to support themselves after retirement will benefit from purchasing a retirement plan. During certain life stages, investments in retirement planning become particularly essential:

Young professionals (in 20s & 30s)

Young people have the opportunity to start early and take advantage of compound interest. A longer investment horizon also gives you the chance to recover from market downturns and develop an investment habit. Also, retirement plans with life insurance are less expensive at a younger age.

Individuals who are self-employed and business owners

A self-employed individual is responsible for their own financial future without a retirement plan provided by their employer. Disciplined investing, such as retirement plans, enables the building of a solid corpus. If they start early and continue to contribute, they will have enough money in retirement to maintain their lifestyle.

Professionals in their 30s and 40s

As your career progresses, it is critical that you evaluate and improve your retirement fund. With increased income, professionals can increase their contributions to take advantage of compounding. You have an opportunity at this stage to make up for lost savings in order to ensure a stress-free retirement later in life.

Pre-retirees (in their 50s)

There is still time to plan effectively even for those close to retirement. Pre-retirees can accumulate funds by focusing on lower-risk, stable-return retirement plans. The right products and strategies tailored to shorter horizons can help secure a steady income after retirement and ensure financial independence.

Women

Based on official sources, the World Bank compilation of development indicators shows that females in India have a life expectancy of 73.6 years, which is higher than that of men. As a result, they will require a larger retirement corpus to maintain their standard of living after they retire. Additionally, with changing dynamics, women should be independent financially post-retirement rather than relying on their spouses or families.

Those seeking peace of mind and financial independence

Early retirement planning will help you accumulate the required corpus for:

Maintain a standard of living
Achieve inflation control
Cover the cost of healthcare
Achieve retirement goals

Avoid financial dependency on family members

How to use a retirement planning calculator?

To use a retirement planning calculator, follow the below steps:

Step 1: Input personal information:
Enter your current age, retirement age and expected lifespan after retirement.
Input financial details
Add existing retirement savings and investments.
Some calculators ask for your current income to estimate future expenses.
Calculate your expected monthly retirement income to maintain your lifestyle in retirement.
Provide an estimate of your country's long-term inflation rate.
Enter the expected return on your investments before retirement.
Calculate your expected investment returns after retirement.
Step 3: Analyse the results
A retirement corpus projection will be provided by the calculator. The calculator will show you how much you should save each month to reach your goal.
It will help you figure out if there is a financial gap between your projected needs and your current savings.
Step 4: Adjust and plan
Try adjusting the variables to see how they impact your goal if the results don't match your expectations. As an example, you might consider retiring later or adjusting your savings rate. Consider setting up a Systematic Investment Plan (SIP) using the insights.

Calculate Your Retirement Premium

Plan your retirement fund and find out how you can secure the financial needs of your loved ones!

Factors to consider while buying a pension plan

There are several factors to be considered before investing in a pension plan. The following may be considered when choosing best retirement plan in india:

Retirement needs and wants

How would you like to live in retirement? This will give you an idea about the accumulation period, or how long you need to invest, and the payout period, or how long you will receive your pension.

How would you like to live in retirement? Where one decides to live during retirement depends upon what is important to them: hobbies they may want to pursue and their lifestyle – metro vs. Tier 2 city.

What are your current and projected expenses? The answer to this will be based on the inflation, health expenses, and living expenses you expect. You can use a pension calculator to get better estimates.

Are there any dependants in your family? - Evaluating your financial dependants – spouse, children, parents, and others – will help you prepare for retirement.

Type of pension plan

There are various types of pension plans in India, each having different features and benefits:

National Pension System: NPS is a Government of India-backed, market-linked retirement plan available to all Indian citizens in the age bracket of 18 to 70 years. Apart from tax⁴ benefits, you also get various investment options: equity, debt, and government securities.
Employee Provident Fund (EPF): This is the retirement savings plan that is mandatory for employees. Both you and your employer will make a contribution to the EPF.
Annuity plan: A life insurance company offers annuity plans whereby you can invest a lump sum or pay regular premiums. At the end of the term of the policy, you get a pension.

Risk appetite and investment options

Asset allocation: Understand how your pension plan invests your money in equity, debt, and government securities.
Risk appetite: The selection of a pension plan should be directed by your risk appetite and investment horizon. When younger, one has more time to recover should there be market downturns; hence, riskier classes such as stocks can be invested in.
Returns from plan: Some plans come with assured returns (EPF, PPF, or pension plans with guaranteed return³), while others give market-linked returns⁸ (NPS). That should be weighed against the risks associated with the pension plan.
Inflation: Inflation tends to erode purchasing power over time. Thus, finding a pension plan or investment strategy that outpaces inflation is key.

Tax benefits

Investment: In India, contributions to pension plans are largely tax-exempt⁴ under the various sections of the Income Tax Act, 1961.
Interest: Check if interest earned in the pension plan is tax-free⁴.
Withdrawal: A lump sum withdrawal or annuity payment carries tax implications. In NPS, for instance, 60% of the lump sum withdrawal is tax-free⁴, but your annuity income is taxed based on your tax slab. However, withdrawals from EPF and PPF are completely tax-free⁴.

Flexibility and liquidity options

Premium payment options: Consider the premium payment options (monthly, annual, lump sum) or if the premium can be increased or decreased later.
Partial withdrawal option: During the accumulation period, you may be able to withdraw funds partially for emergencies, such as medical expenses, child education, etc. Under certain circumstances, NPS allows limited partial withdrawals.
Vesting age: The age at which you will begin receiving pension payments. Your vesting age needs to be aligned with your retirement age.
Portability: Check if your pension plan offers portability if you wish to move your funds to another fund manager.

Charges and fees

Be sure to check for associated charges and fees in pension plans. Pension plans typically charge the following fees:

Administrative charges: For the purpose of maintaining your pension account.
Fund Management Charges (FMC): In order to manage your investments.
Premium allocation charges: Before your premium is invested, these one-time fees will be deducted.
Mortality charges: Exists in life insurance-linked pension plans to provide life insurance protection
Surrender charges: If you withdraw before the plan matures, the amount will be deducted.
Transaction charges: When a contribution or withdrawal is made, the transaction fee is deducted.

01

Rate of annuity

The rate of annuity determines your pension amount in annuity plans. Evaluate the rates offered by different providers for annuities.
02

Life insurer’s reputation and solvency ratio

Choose a reputable life insurance provider that has been in business for a long time. Asset Under Management (AUM) and solvency ratio can be used to gauge a provider's reputation.
03

Death benefit and nomination

Check to see if your pension plan includes death benefits in case of your death. A life insurance-linked pension plan provides a death benefit if the policyholder passes away during the accumulation phase.
04

Online tools and calculators

Online tools such as retirement and pension calculators can assist you in calculating your retirement corpus for a particular pension scheme.

Eligibility criteria for retirement plans

The following are the eligibility criteria for a retirement plan in India:

Entry age: Generally, pension plans require you to be 18 years old. However, some require you to be 30 years old. There's usually a maximum entry age of 75-80 years.
Premiums: Premiums are the regular amounts paid by the policyholder throughout the policy period. At the end of the tenure, maturity returns are determined by the regular premiums paid.
Vesting age: A policyholder's vesting age is the age at which they begin receiving their pension, which is typically set at 40 years of age but can vary depending on the insurer.

Documents needed for buying a pension plan in India

The following is the list of documents that you need to buy a pension plan in India:

Passport
Voter’s Identity Card issued by the Election Commission of India
Permanent Driving License
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Why buy pension plans online?

Here are some of the important benefits of purchasing a pension plan online:

Compare plans

When you buy a pension plan online, you can easily compare the plans alongside and look through the features, benefits and exclusions of all the plans before you choose a suitable one and purchase it.
Save time and capital

The online purchasing process is quick and easy, which means you can get your policy in a matter of minutes. And since there are no overhead costs of an online purchase, you can benefit from discounts when you buy the policy online.
Security of policy document

Since the policy document is online, there is no chance of you misplacing the policy like you can lose the hard copy. If you do happen to lose the hard copy, you can easily access the online soft copy or even save it on your device.
24x7 Customer support

Your insurance provider’s customer service can offer you 24/7 support for your feedback and queries when you buy online. You can reach out to them or leave them a query, and they can resolve it in a few minutes for a swifter process.
Minimum paperwork

Buying online means that you do not need to use any papers for your policy document. This not only saves you from a lot of physical clutter but also ensures a green and environment-friendly process for everyone.
Transparency

Before you buy a policy online, the necessary research, such as knowing your insurance provider’s claim settlement ratio, reading their reviews and knowing their products, can be done quickly and easily online.

Steps to Purchase a Tata AIA Pension Plan

Set a Budget

Plan a budget for your retirement plan after you determine your post-retirement needs, expenses, and family needs. Once you have this amount, you can buy a pension plan that lets you invest it and receive it at your convenience.
Evaluate your current finances

Take into account your income and financial situation. With your chosen retirement plan, you should be able to invest and pay premiums comfortably. Make sure your retirement corpus covers your future expenses and your family's needs so you do not end up with inadequate funds.
Identify your income sources

If you have additional income from other sources, such as a business or property, you still need a pension plan for your regular expenses.

However, it is important to know that the other income sources attract taxes while your retirement plan premiums will be eligible for tax benefits⁴ under Section 80C of the Income Tax Act.
Deferred or immediate annuity?

If you need an immediate income upon investment, an immediate annuity plan can be a good choice.

However, if you are planning in advance, you can choose a deferred annuity plan where you can pay the premiums over the policy term and then receive the benefits during the vesting period.
Choose your Tata AIA pension plan

After evaluating all your income sources and liabilities, you can estimate the size of your retirement corpus. Next, browse our catalogue to see which retirement plans best suit your needs. Check investment amount, guaranteed³ payouts, other returns, and loan facilities of the plan. You can find all of this information in the policy brochure and policy details.

Types of retirement plans under Tata AIA

Annuity Plans

Tata AIA offers immediate and deferred annuity plans. You can make Single or regular payments under the policy and upon retirement, the annuity plan will offer annuity amount as per the mode chosen.
Guaranteed Returns Retirement Plans

These are low-risk retirement plans that offer guaranteed³ returns under three different options – lump sum (endowment), regular income, and whole life income. Since the returns are not market-linked⁸, you get an assured amount on retirement.

Why choose Tata AIA life insurance retirement and pension plans?

Guaranteed Income Post Retirement

Get assured income post your retirement with customizable plan features.

89 Lakh+

Families protected so far⁵

99.41%

Individual Death Claim Settlement Ratio in FY 2024 – 25⁶

Express Claim Settlement

Get your claims settled under 4 hours⁷

⁷T&C apply

600+ Branches

Presence across major cities in India

Pay your Way

Flexibility to choose premium payment mode as per convenience

³T&C apply

Looking to buy a new insurance plan?

Our experts are happy to help you!

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1.What are the eligibility criteria for buying a pension plan?

To buy a pension plan, you must be between 18 and 70 years and be able to pay regular premiums. Moreover, check the vesting age after which you can start receiving the payouts

2.What are the different types of government retirement pension plans?

The different types of government retirement pension plans include Public Provident Fund (PPF), Employee Provident Fund (EPF), and Atal Pension Yojana (APS).

3.How to get a ₹1 lakh pension per month?

To get ₹1 lakh per month, you need to invest a lump sum or make regular payments to build a sizeable fund corpus through a suitable pension plan.

4.What is the difference between a pension plan and an annuity plan?

A pension plan is an investment or savings scheme for creating a retirement corpus. An annuity, however, is an insurance policy that turns your savings (lump sum or periodic) into regular income.

5.Why is a pension plan important?

Pension or retirement plans provide the dual advantage of growth in investment and protection against insurance, giving you a secure income when you retire.

6.Can I go for a savings or investment plan as a retirement plan?

You can choose a savings plan if you’re focused on capital preservation. You may opt for an investment plan for relatively higher returns to build a larger corpus, but consider market-related risks.

7.Can I choose to get a retirement plan in my 20s?

Yes, if you start in your 20s, you can put away smaller sums of money over a longer term, allowing compound interest to take effect. Starting early provides options, lightens the fiscal burden later, and allows you to adapt your strategy as income and goals change.

8.Can I stop my retirement plan anytime I want?

Yes, you can stop your retirement plan anytime, but doing so may lead to penalty charges, loss of benefits, or reduced maturity value depending on the policy terms.

9.What will happen if I don’t die till my term plan is over?

If you outlive your term plan, no payout is given unless you opted for a Return of Premium (ROP) plan, which refunds the total premiums paid at maturity.

Feature	Immediate Annuity	Deferred Annuity
Payment start	Within 12 months of investment	After a deferment period, it could be years later
Funding method	Lump-sum payment only	Either lump-sum or periodic premiums
Growth potential	No accumulation phase; income based on insurer’s rates	Offers tax-deferred growth during the accumulation phase
Best suited for	Seniors needing immediate, predictable income	Younger savers looking for long-term growth and a later payout

10.How much money do I need to retire?

To retire comfortably, you should aim for a retirement corpus that’s 20–25 times your annual expenses. This ensures financial stability, inflation coverage, and a steady post-retirement income.

1.Does a retirement plan also offer life insurance coverage?

Yes, many retirement or pension plans combine savings with life cover, ensuring that if you pass away before retirement, your family receives a death benefit. Check your plan’s brochure to confirm the coverage amount.

2.Are riders available with pension plans?

Yes, pension plans usually include optional add-ons (riders) like critical illness cover, accidental death benefit, or waiver of premium. These provide added protection but usually entail extra premiums.

3.Do retirement savings plans have tax benefits

Yes. Pension plan premiums are deductible⁴ under Section 80CCC in India up to ₹1.5 lakh annually. Also, regulated plans like NPS have additional deductions⁴ under Section 80CCD(1B).

4.Can I increase the benefits of my retirement plan?

Yes, you can enhance your plan by increasing premium payments, opting for riders, or choosing a more aggressive investment mix (e.g. equity funds). Many insurers offer top-up or booster options for this purpose.

5.What is the difference between commuted and uncommuted pensions?

A commuted pension allows obtaining a one-time lump sum (usually up to ⅓ of the corpus), which is often tax-free⁴. Whereas, an uncommuted pension provides regular monthly payouts, which are fully taxable under income tax rules.

1.What are the payout options if I buy a retirement plan?

You can typically choose between:

Lump-sum payout: one-time full withdrawal.
Lifetime or fixed-period annuities: guaranteed³ monthly income for life or a set term.
Systematic withdrawals: flexible periodic payouts until funds run out.

2. Is there a return on the purchase price of a pension plan?

Standard pension plans do not return the purchase price. However, some offer Return of Premium (ROP), which refunds all paid premiums at maturity.

3.What are the various premium payment modes under retirement/pension plans?

You typically get to choose from:

Single lump-sum payment
Limited premium (e.g., pay for 5 or 10 years)
Regular premiums (monthly, quarterly, half-yearly, or annual)

4.Can I change the payout mode later?

Yes, you can often switch between payout modes (e.g., lump sum to annuity) during the free-look period before payouts begin. After that, options depend on your policy's terms and insurer approval.

1.Can I file a death claim under a retirement pension plan?

Yes. If the plan holder dies before payouts start, the nominee can file a death claim and receive either the corpus or insured sum, depending on policy terms.

2.What documents are needed to file a claim?

The nominee must submit:

Claim form(s)
Original death certificate
Medical/hospital records
Policy document & KYC of the nominee
Bank details

Additional documentation may be required for accidental or unnatural deaths.

3.How can my nominee file an online claim on a retirement plan?

Most insurers let nominees submit claims online via their portal by uploading scanned KYC, death certificates, and claim and hospital forms. Ensure documentation is complete to avoid delays.

4.How many days does it take for a claim to be settled?

The settlement of claims in case of non-investigated deaths typically takes up to 15 days and up to 45 days for investigated claims.

5.How can a retirement savings plan claim be processed if the nominee is not in India?

Nominee abroad must provide:

Embassy‑attested death certificate
Attested KYC & claim forms
Bank details
Additional documents, like an an employer’s letter.

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Retirement Planning Tips

For Salaried Individuals

Make your retirement savings a part of your budget.

If you have just started earning, 10% of your income must be allocated to savings. As your income increases, increase your savings to 15%. As you get older, try to get your savings to 35% or more while still comfortably handling your financial obligations.

Since you earn a regular monthly income, this can easily be done by automating your savings. You can also opt for an auto-debit option for your premium payments under Tata AIA pension plans, so your contributions are made on time. Moreover, consider the number of years you plan to work before retiring and your life expectancy. In case you plan to retire early, you need to choose a pension plan that offers a life annuity option and build a substantial enough corpus to last you post-retirement.

For Self-Employed Individuals

If you are a self-employed individual, like a business owner or entrepreneur, you must prioritise your retirement planning more carefully, as a loss of business means a loss of income.

One way to better plan your budget would be to differentiate personal and business expenses.

This can be done using separate bank accounts and purchasing a retirement pension plan with guaranteed³ benefits. This way, you stay financially secure regardless of other external factors.

For Senior Citizens

If you are an older individual, you must first start by figuring out when you are ready to retire. Think about when you are ready to stop working from a mental and financial perspective.

You will also need to take stock of your existing assets and investments and determine how much money you will need to sustain your standard of living once you stop earning a regular income. Moreover, if you haven't already, it may also be time to buy a pension plan. If you are close to retirement age and have a large corpus, we recommend buying and investing a lump sum into an immediate annuity plan.

If you are retiring early, getting a life cover with your retirement pension plans ensures you receive annuities throughout your retirement.

Retirement And Pension Plans

Pay ₹1 Lakh/year9 Get ₹6.69 Lakh lifetime annual pension

What are Retirement/Pension Plans?

Pension Plans:

Annuity Plans:

Tata AIA’s Best Selling Retirement Plans

Smart Pension Secure

Fortune Guarantee Pension

What is retirement planning calculator

Why you should start a retirement plan in India

Job market uncertainty and early retirement trends

The rising cost of healthcare

Rising life expectancy

Increasing living costs

Tax advantages

Family shift from joint to nuclear

Absence of a universal social security scheme

Importance of retirement plan in India

How does a retirement plan work?

Accumulation phase

Distribution phase

Let’s understand both phases with the help of an example:

Accumulation Phase

Vesting Phase

Tata AIA Life Insurance Retirement Plans

Tata AIA Smart Pension Secure

TATA AIA Fortune Guarantee Pension

Tata AIA Fortune Guarantee Retirement Ready

Tata AIA Saral Pension

Tata AIA Smart Annuity Plan

Types of pension plans

Government-Backed Pension Schemes

Private Pension Plans

Annuity plans

Pension Plans with Life Cover

Here is the detailed explanation of each plan:

Deferred Annuity

Immediate Annuity

Life Annuity

Guaranteed Period Annuity

Annuity Certain

Public Provident Fund (PPF)

Employee Provident Fund (EPF) & Employees' Pension Scheme (EPS)

Pension Funds

Whole Life ULIPs

Defined Benefit Plans

Defined Contribution Plans

National Pension Scheme (NPS)

Features of pension plan

A Steady Flow of Income

Tax Benefits

Payout Period

Avail Loans

Liquidity in Retirement Plans

Surrender Value

Benefits of Retirement Plan

Guaranteed* Returns Benefit

Financial Security for Your Family

Flexible Premium Payment Terms

Creation of a Stream of Regular Income

Get Tax Benefits

Customise your Retirement Plan

Comparison of Tata AIA retirement plans

How much do I need to save for retirement?

Retirement age and current age

Calculate your daily living expenses

Major life events and milestones

Post-retirement lifestyle and residence

Expenses associated with medical emergencies and healthcare

Inflation and its impact over time

Retirement savings and additional income sources

Expected rate of return