Planning for a financially secure retirement is important for everyone, including NRIs (Non-Resident Indians). As an NRI, investing in a retirement plan can be a smart decision to make sure a stress-free retirement. Pension plans provide a regular income flow after retirement, helping NRIs to maintain their lifestyle and meet their financial needs.
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Retirement Plan is a type of investment plan that enable individuals to save a portion of their income over an extended period to ensure a secure financial future. This plan is designed to assist people in managing their expenses after they retire, providing a stable income stream.
Simply put, A pension plan is a financial tool that allows you to accrue a retirement corpus in the long tenure during your working years. At the time of maturity, you can withdraw a part of the accumulated amount and then invest rest of the funds to buy an annuity plan. The amount of a pension plan increases with regular investments over time, which results in larger retirement savings for individuals. After the retirement of investors retire, they receive periodic payments from the accumulated amount to cover lifestyle expenses and other financial needs.
Listed below are some of the best pension plans in India:
| Retirement Plans in India | Entry Age | Maturity Age | Policy Term | Tax Benefit | Minimum amount to Invest (yearly) |
| Aditya Birla Sun Life Empower Pension Plan | 25-70 years of age | 80 years of age | 5-30 years | Offers tax benefit U/S 80C of IT Act | Rs. 18,000 |
| Bajaj Allianz Life LongLife Goal | 18- 65 years | 99 years of age | 99 years- Entry age | Offers Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961 | Rs. 25,000 |
| Bajaj Allianz Pension Guaranteed Pension Plan | 0-100 years of age | N/A | Lifetime | Offers tax benefit U/S 80C & 10(10D) of IT Act | Rs. 25,000 |
| Edelweiss Life Tokio Wealth Secure Plus | 18-60 years | 18 to 70 years | 5-25 years | Offers Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961 | Rs. 24,000 |
| HDFC Life Click 2 Wealth | 18-60 years | 18-75 years of age | 20-64 years | Offers Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961 | Rs. 12,000 |
| ICICI Pru Easy Retirement Plan | 18-70 years of age | 30-80 years of age | 10, 15, 20, 25, 30 years | Offers tax benefit U/S 80C & 10(10D) of IT Act | Rs. 48,000 |
| ICICI Prudential Signature | 18-75 years | 99 years | 10-30 years | Offers Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961 | Rs. 24,000 |
| IndiaFirst Life Guaranteed Annuity Plan | 40-80 years of age | N/A | Lifetime | Offers tax benefit U/S 80C IT Act | Rs. 1 lakh |
| Kotak Premier Pension Plan | 30- 60 years of age | 45-70 years of age | 10-30 years | Offers tax benefit U/S 80C of IT Act. | Rs. 1 lakh |
| LIC Jeevan Akshay 7 Pension Plan | 25-100 years of age | N/A | Lifetime | Offers tax Benefit U/S 80C of IT Act | Rs. 1 lakh |
| LIC New Jeevan Shanti Pension Plan | 30-79 years of age | 31-80 years of age | -- | Offers tax Benefit U/S 80C of IT Act | Rs. 1.5 lakhs |
| Max Life Forever Young Pension Plan | 30 years-65 years | 50-75 years of age | 10 years to 75 years-Entry age | Offers tax benefit U/S 80C of IT Act | Rs. 25,000 |
| Max Life Guaranteed Lifetime Income Pension Plan | 0-85 years of age | 26-90 years of age | N/A | Offers tax benefit U/S 80C IT Act | Rs. 25,000 |
| Max Life Online Savings Plan | 18-60 years | 18-45 years | 5 to 67 years | Offers Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961 | Rs. 12,000 |
| SBI Life Saral Retirement Saver | 18-65 years of age | 40-70 years of age | 5, 10- 40 years | Offers tax benefit U/S 80C of IT Act | Rs. 1 lakh |
| Tata AIA Fortune Maxima | 18-60 years | 100 years | 100 minus issue age | Offers Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961 | Rs. 18,000 |
| Tata AIA Life Guaranteed Monthly Income Plan | 6-60 years of age | 68 years of age | 5, 8, 12 years | Offers tax benefit U/S 80C & 10(10D) of IT Act | Rs. 36,000 |
Disclaimer: ≈ Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is done in alphabetical order (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
A wide range of retirement plans in India are available to cater to the insurance seekers' requirements. Here is a list of some of the common pension plans:
Let's explore these pension funds in detail.
| Types of Retirement Plans | Description |
| Deferred Annuity |
|
| Immediate Annuity |
|
| Annuity Certain |
|
| National Pension Scheme (NPS) |
|
| With Cover Pension Plans |
|
| Without Cover Pension Plans |
|
| Guaranteed Period Annuity | Annuity provided for certain period, regardless of survival |
| Life Annuity | Pension paid until death, spouse receives pension in case of annuitant's death with 'with spouse' option |
| Pension Funds |
|
| Whole Life ULIPs |
|
| Defined Benefit |
|
| Defined Contribution |
|
| HDFC Life Insurance | Specialized pension plans for complete protection at affordable costs |
| SIMPLE IRA |
|
| SEP-IRA |
|
| Roth IRA | Special IRA where an individual pays tax on money deposited, but all withdrawals in the future are tax-free. |
Here are some benefits of Retirement Plans for NRIs:
An annuity is the fixed amount an investor will receive yearly throughout their life tenure. An annuity can be immediate or deferred depending upon its nature.
The sum assured is a definite amount offered to the nominee of the plan at the end of the plan tenure. It is generally 10X the policy’s annual premium or fund value.
The vesting age is when the investors start receiving the monthly pension from their pension plan.
The payment period is when the investor starts receiving the payments post-retirement.
The accumulation period is when the investor pays a regular premium toward their policy or plan.
The surrender value of pension plans is the amount the insurance company will pay the individual if they surrender the plan before its maturity.
With the rapidly changing economic landscape in the world, it has become vital to plan for a secure and comfortable retirement. It is essential to have a well-thought-out retirement plan that considers factors such as inflation, healthcare costs, and changing lifestyle needs.
It is crucial to start planning for retirement as early as possible to accumulate enough funds for future expenses and maintain a standard of living during retirement years.
If you are trying to find the best retirement plan in India, it is crucial to understand different scheme’s benefits available in India.
Let us learn some basic advantages offered by pension schemes in India:
Retirement plans assure long-term savings, regardless of the premium payment mode.
Pension schemes in India focus on creating an annuity that can generate steady cash flow post-retirement.
Retirement plans offer guaranteed income to meet day-to-day expenses.
Income plans offer better returns and are a smart way to plan for retirement.
Retirement plans provide insurance coverage to financially protect the policyholder's family.
The Pension Benefit Guaranty Corporation takes care of pension payouts even if the company liquidates.
Pension plans offer tax benefits under Offers tax benefit U/S 80C & 10(10D) of Income Tax Act.
Retirement plans in India for NRIs offer different options for individuals based on their needs and preferences.
Riders, such as critical illness or disability due to an accident can enhance the coverage of retirement plans.
Note: For detailed information on pension plans, read the plan brochure. You can explore Policybazaar to compare the best retirement plan in India for you.
A pension scheme is as important as buying a health insurance plan. Here are the reasons why:
Working forever is impossible due to aging and deteriorating health over time.
Retirement plans provide a regular source of income after you stop working.
Medical expenses are common and hefty, so having a pension plan can help.
Retirement allows you to pursue things you have had to put off in the past.
Being financially independent during retirement prevents you from being a burden on your children.
Retirement plans can also help you support your family when they need it.
India has multiple types of pension plans, so it is important to analyze your financial needs before choosing a retirement plan.
Let's look at the top 5 tips for retirement planning:
Save for retirement Now
Be Prepared for Future Financial Emergencies
Explore various insurance options
Diversify your Investments
Think about Your Retirement Wants
The three main eligibility criteria for purchasing retirement plans in India are:
Entry Age: Typically, the minimum entry age for a Pension Plan is 18 years, but some plans require an entry age of 30 years. Maximum entry age is usually around 70 years.
Premium: Policyholders must pay a minimum premium for their Pension Plan, as the pension amount is based on the premium paid.
Vesting Age: The age at which a policyholder begins receiving their pension is known as the vesting age, which is usually set at 40 years but can vary depending on the insurance provider.
Here are some key reasons why having a retirement plan is essential for NRIs living in USA:
Financial Security: A retirement plan is crucial for ensuring financial security during your retirement years. It provides a regular income stream, allowing you to maintain your lifestyle and cover essential expenses such as healthcare, housing, and daily living costs.
Long-Term Goals: Retirement planning helps you set and achieve long-term financial goals. It encourages you to save and invest wisely over the course of your working years, building a nest that can support you when you are no longer earning a regular income.
Peace of Mind: Knowing that you have a well-structured retirement plan in place brings peace of mind. It alleviates concerns about your financial future, reducing stress and allowing you to focus on enjoying your retirement years without constantly worrying about money.
Flexibility and Control: By actively participating in retirement planning, you gain greater control over your financial future. You can choose the type of retirement account that suits your needs, decide how much to contribute, and make investment choices based on your risk tolerance and financial goals. This flexibility allows you to tailor your retirement plan to align with your unique circumstances.
˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance
plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
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