A retirement plan or pension plan is an investment option that helps you fulfil your financial needs post-retirement. Putting your money in a good pension plan will help you live a financially free retirement life. The accumulated corpus provides steady payments during retirement and ensures that you have a source of income after you stop working. These pension or retirement plans offer you financial security and peace of mind, making them an essential part of your long-term financial strategy.
Peaceful Post-Retirement Life
Tax Free Regular^ Income
Wealth Generation to beat Inflation
A pension plan, also known as a retirement plan, is an investment option designed for your post-retirement life. It allows you to save money either through a one-time lump sum or regular payments over time. These pension plans guarantee a steady income during your retirement, ensuring a secured financial future.
A ULIP-based retirement plan is a good choice for investors who seek insurance cover along with high investment growth through market-linked returns.
By consistently contributing to a retirement plan or pension plan during your career, you can create a significant fund to support your retirement needs.
Market-Linked Pension Plans are investment plans that combine the features of both pensions (providing regular income in retirement) and investments (exposure to market returns). Your contributions are invested in the market-linked funds. The value of your retirement plan grows based on the performance of these investments. Annuity plans, on the other hand, offer 100% guaranteed income during retirement. The amount is predecided at the time of policy purchase and does not get affected due to market fluctuations at any time.
The following list will help you to choose the pension plan among various investment plans:
| Pension Plans in India | Entry Age | Maturity Age | Policy Term (PT) | Minimum amount to Invest (yearly) | |
| Tata AIA Fortune Maxima | 18 – 60 years | 100 years | 100 minus issue age | Single: Rs. 25,000; Limited: Rs. 12,000 p.a. | Get Details |
| Max Life Online Savings Plan | 18 – 60 years | 85 years | 5 – 52 years | Rs. 12,000 p.a. | Get Details |
| HDFC Life Click 2 Wealth | 18 – 60 years | 18 – 99 years of age | 20 – 64 years | Rs. 12,000 p.a. | Get Details |
| Max Flexi Wealth Advantage Plan | 18 – 50 years | 18 – 75 years | 10 – 40 years | Rs. 24,000 p.a. | Get Details |
| Bajaj Allianz Life LongLife Goal | 18 – 65 years | 99 years | 99 years minus Entry age | Rs. 25,000 p.a. | Get Details |
| ICICI Prudential Signature | 18 – 60 years | 18 – 75 years | 10-30 years | Rs. 30,000 p.a. | Get Details |
| PNB Goal Ensuring Multiplier | 18 – 60 years | 99 years | 39 – 99 years | Rs. 18,000 p.a. | Get Details |
| Canara Promise4Growth - Life | 18 – 60 years | 18 – 80 years | 10-30 years | Rs. 12,000 p.a. | Get Details |
| Kotak E-invent - Retire Rich Plan | 18 – 50 years | 28 – 60 years | 10/ 12/ 15/ 20 years | Rs. 24,000 p.a. | Get Details |
| Edelweiss Life Tokio Wealth Secure Plus | 18 – 60 years | 18 – 70 years | 5-25 years | Rs. 24,000 p.a. | Get Details |
| Tata FortuneGuarantee Retirement Ready Plan | 18 – 75 years | 40 – 85 years | 5 – 15 years | Rs. 12,000 p.a. | Get Details |
| Max Life SWP – Long Term Income Plan | 18 – 60 years | 60 – 85 years | 60 – 80 years minus Entry Age | Rs. 11,000 p.a. | Get Details |
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer. The tax benefit is subject to changes in tax laws. *Standard T&C Apply
Here are the features of the pension plans by insurance companies:
The Tata AIA Fortune Maxima is a participating Unit-Linked Pension Plan (ULPP) offering life insurance cover and market-linked returns.
Invest in 4 or 5 star Debt, Equity or Balanced funds to increase your wealth.
Get life insurance coverage up to age 100 for your family's security.
Receive extra units starting from the 6th or 11th policy year to boost your investment.
Choose from multiple funds or the Enhanced SMART strategy for your investments.
Add optional riders to your ULIP policy for greater protection.
Benefits: Potential for higher returns than traditional pension plans, life insurance cover, market participation, and flexibility.
A unit-linked, non-participating traditional investment plan that provides both life cover and wealth creation benefits.
Receive a lump sum equal to the Fund Value on maturity, using the next working day's NAV if needed.
Death Benefits:
Variant 1: Highest of Sum Assured, 105% of premiums paid, or Fund Value on death.
Variant 2: Immediate lump sum, Family Income Benefit, total Fund Value at term end, and company-funded premiums after death. Higher death benefits, lower returns.
Choose from 13 funds or a Dynamic Fund Allocation strategy.
Unlimited free fund switches, no Premium Allocation or Policy Administration charges. Only Mortality and Fund Management charges apply.
Benefits: Guaranteed returns, predictable income after retirement, tax benefits, no market risks.
A participating Unit-Linked Pension Plan (ULPP) with guaranteed life cover and loyalty additions.
Only fund management and mortality charges apply when managing your funds and life coverage.
Receive a special addition of 1% of annualized premium for the first 5 years.
Get Mortality Charges back on maturity.
Choose from 13 fund options with unlimited free switching if you opt for the Premium Waiver.
Utilize the Systematic Transfer Plan for Rupee Cost Averaging benefits.
Benefits: Offers life cover, maturity benefit, investment flexibility, and online convenience.
A Unit Linked Insurance Plan (ULIP) designed to help you build a wealth portfolio for you and your loved ones for regular income during retirement.
Refund of ULIP charges added back to your fund value.
Guaranteed loyalty additions to your fund from the 8th year.
Extra boost after 5 years for auto debit payments.
Choose between Wealth and Whole Life plans, various premium and policy terms, 5 investment strategies, and 12 funds.
Change your investment style anytime with unlimited free switches and premium redirections.
Benefits: offers potential for wealth creation, life cover, tax benefits, and investment flexibility.
A non-participating Unit-Linked Pension Plan (ULPP) with guaranteed life cover and annuity payout.
Receive yearly loyalty additions from the 5th to the 25th policy year.
Choose between LongLife Goal without Waiver of Premium and LongLife Goal with Waiver of Premium.
Select from 4 investment strategies and 15 different funds.
Benefit from the periodic return of Waiver of Premium charges and the option to reduce your premium.
Enjoy life insurance coverage until age 99 with Retired Life Income and Return Enhancer
Benefits: Guaranteed returns on annuity payout, market participation, flexibility in payout options, and life insurance cover.
A participating Unit-Linked Pension Plan (ULPP) with guaranteed life cover and loyalty additions.
Additional boosts every 5 years starting from the 10th policy year.
Enjoy benefits until 99 years of age with the Whole Life policy option.
Entire premium is invested in your chosen funds without deductions.
Get back Mortality and Policy Administration Charges at maturity.
Choose from 4 portfolio strategies and a variety of funds across equity, balanced, and debt to suit your savings needs.
Benefits: Potential for higher returns with market participation, guaranteed benefits, life insurance cover, flexibility in premium payment and policy terms.
PNB Goal Ensuring Multiplier (GEM) is a Unit Linked Insurance Plan (ULIP) that combines life insurance coverage with investment options, aiming to help you achieve your long-term financial goals.
Get back Fund Management, Premium Allocation, and Mortality Charges.
Choose from 13 different funds.
Exclusive feature for child-related benefits.
Adaptable premium payment options.
Premiums waived on death or critical illness.
Benefits: Offers life insurance, investment growth, return of charges, tax benefits, and flexible goal-oriented options.
Canara HSBC Promise for Growth is a retirement plan that helps you achieve your long-term financial goals while providing life insurance coverage for your family.
Choose from three plans - Promise4Wealth, Promise4Care, or Promise4Life - based on your life stage needs.
Mortality Charges deducted during the policy term are added back to the Fund Value at maturity.
Premium funding benefits ensure that your savings contributions continue even in your absence.
Receive Loyalty Additions every 5 years starting from the 5th policy year, and Wealth Boosters every 5 years starting from the 10th policy year.
Benefits: Offers life insurance coverage, investment flexibility, and potential wealth growth through various fund options.
The Kotak e-Invest Retire Rich Plan is a type of investment plan that combines investing your money in the market with some life insurance protection.
Enjoy 100% allocation of your premiums.
Receive yearly additions from the 6th policy year until maturity or death.
Gain additional fund value from 25% to 200% of Life Cover charges deducted.
Opt for the Rising Star option for Triple Protection Benefit on the parent's death.
Ensure post-retirement expenses are covered with Retirement Income and Income Booster.
Benefits: Offers investment growth, insurance coverage, flexible withdrawals, retirement income with booster, and tax benefits.
Edelweiss Life Tokio Wealth Secure Plus is a non-participating unit-linked pension plan in India with guaranteed life cover and maturity benefits.
Ensure continued policy coverage for your child in the event of your unfortunate demise
Guaranteed death benefit and guaranteed maturity benefit.
Choose from a selection of 7 funds and enjoy unlimited switches if you opt for the Self-Managed Strategy.
Start your savings journey with premiums as low as Rs. 1,000 per month.
Benefits: Guaranteed returns on maturity and death benefits, market participation, flexibility in payout options, and life insurance cover.
Tata Fortune Guarantee Retirement Ready Plan is an individual, non-linked, non-participating pension plan designed to provide you with a guaranteed income after retirement, along with life insurance coverage.
Choose from 3 flexible plans: My Pension, Partner Pension, and Partner Pension Plus.
Enjoy a boost to your retirement corpus with guaranteed additions of 6% of the sum assured on vesting.
Receive a lump sum Vesting Addition at the time of vesting.
Special discounts for women, transgenders, and customers under 35 years of age.
Benefits: The retirement plan offers guaranteed income after retirement, life insurance coverage, flexibility, guaranteed additions, and discounts for women, transgender individuals, and young policyholders.
Max Life SWP, which stands for Smart Wealth Plan is a whole-life insurance based retirement plan in India that is designed to provide income for a long period.
Choose from Early Income, Early Income with Guaranteed Money Back, or Deferred Income Plans, all offering guarantees and cash bonuses.
Accrue and withdraw survival benefits as needed, with flexible withdrawal options.
Select an income period, including Whole Life Income, up to ages 100, 85, 75, 70, 65, or 60.
Customize protection with optional riders for added security.
Ensure continuity of benefits in case of the insured's death, without the need for premium payments, with PCB.
Benefits: Offers customizable long-term income options, death benefit, maturity benefit, tax benefits (subject to tax laws), and flexibility in choosing your income payout.
A wide range of the retirement plans in India are available to cater to your various requirements. These retirement and pension plans are classified based on the plan structure and benefits.
Let us explore the following types of pension plans in detail:
| Pension Plans | Description |
| Deferred Annuity | - Allows you to accumulate a corpus through regular or single premium payments -Pension is provided after completion of the policy tenure. -1/3rd of the corpus is tax-free on withdrawal, while 2/3rd is taxable. -Amount invested in a Deferred Pension Plan is locked and cannot be withdrawn for emergencies until you reach retirement age. |
| Immediate Annuity | -Provides regular income immediately after payment of a lump-sum amount. -Premiums paid towards immediate annuity scheme are tax-exempted as per Income Tax Act, 1961. -Policy nominee receives the money in case of your unfortunate demise during the policy tenure. |
| Annuity Certain | -You receive regular annuity payments for a specific number of years, chosen by you. -If you pass away before receiving all complete payments, the annuity is paid to your beneficiary. |
| Guaranteed Period Annuity | -Offers annuity payments to you for specified periods, such as 5 years, 10 years, 15 years, or 20 years. -You get annuity regardless of whether you survive that duration or not. |
| Life Annuity | -Provides you with regular pension payments during your lifetime. -If the option of 'with the spouse' is chosen under the life annuity plan, the pension amount is transferred to your spouse in the event of your unfortunate demise. |
| National Pension Scheme (NPS) | -Introduced by the Government of India to secure the financial future of the government and private employees after retirement. -Money in the National Pension Scheme is invested in equity and debt funds to generate returns on investment. -60% of the amount can be withdrawn at retirement, while the remaining 40% is used to purchase an annuity. -Maturity proceeds are not tax-free. -You can use the NPS Calculator to easily calculate your potential returns from the scheme. |
| Pension Funds | -Long-term pension scheme regulated by the Government under the Pension Fund Regulatory and Development Authority (PFRDA). -Offers better returns upon maturity compared to other savings plans. -Remains active for a specified period. -You can withdraw an amount from your pension fund during the contribution stage in case of emergencies, providing you with financial stability. |
| Whole Life ULIPs | -Money stays invested in the market-linked funds for your entire life. -Partial withdrawals are allowed upon retirement, providing tax-free income. -Additional withdrawals can be made as needed. |
| Defined Benefit | -This pension plan guarantees a specific retirement income for life. -Calculation under Defined Benefit Plans are based on earnings and years of service with the employer. |
| Defined Contribution | -Retirement income is not guaranteed, but contributions are guaranteed. -Both you and your employer can contribute to this retirement plan. -Retirement amount depends on contributions and investment returns. |
| HDFC Life Insurance Pension Plans | -One of India's leading life insurance providers offers specialized pension plans in India. -Offers a range of retirement plans tailored to individual needs. - retirement plans available at affordable costs for complete financial protection. |
| Retirement Plans Available in USA | |
| SIMPLE IRA | -Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Account (IRA) or Simple IRA. -Designed for small businesses with 100 or fewer employees. -Easy and suitable for employees of small businesses. |
| SEP-IRA | -Simplified Employee Pension (SEP) Individual Retirement Account (IRA). -Opted by self-employed individuals or employers. -Tax deductions applicable. -Contributions made to employees based on eligibility. |
| Roth IRA | -Special Individual Retirement Account (IRA) plan. -Under a Roth IRA taxes are paid on deposited money. -Future withdrawals are tax-free. |
Buying retirement or pension plans online comes with a lot of benefits. Take a look at them below:
An annuity is the fixed amount you will receive each year throughout your life tenure on the purchase of an annuity Plan. The annuity can be immediate or deferred, depending upon the nature.
The sum assured is a definite amount offered to the nominee of the selected pension plan at the end of the plan tenure. It is generally 10 x of the annual premium or the fund value of the policy.
The vesting age is the age when you start receiving the monthly pension from your retirement plan.
The payment period is when you start receiving the regular pension payouts post-retirement.
The accumulation period is the complete time period wherein you pay a regular premium towards your retirement policy.
The surrender value of a pension plan is the amount the insurance company will pay you if you surrender the plan before its maturity.
Start early to benefit from compounding interest and build a secure retirement fund.
Take control of your retirement savings since there are no employer-sponsored plans available.
Do not rely solely on government schemes; secure your retirement with your own plan.
Plan ahead to accumulate sufficient savings for an early retirement and maintain your lifestyle.
Ensure your financial security to avoid depending on your children while also investing in their future.
Optimize taxes and maximize retirement savings by investing in efficient retirement plans.
Prioritize retirement savings to achieve financial freedom and independence.
The three main eligibility criteria for purchasing a retirement plan in India are:
Entry Age: Typically, the minimum entry age for a retirement pension plan is 18 years, but some plans require an entry age of 30 years. Maximum entry age is usually around 70 years.
Premium: You must pay a minimum premium for your retirement plan, as the pension amount is based on the premium paid.
Vesting Age: The age at which you start receiving your pension is known as the vesting age, which is usually set at 40 years but can vary depending on the insurance provider.
Retirement plans in India offer financial security with systematic savings, tax advantages, and customisable investment options. Support from the government and the employer enhances financial accessibility, ensuring a comfortable and stress-free retired life. Let us learn some basic advantages offered by pension plans in India:
Financial Security: Provides a steady income post-retirement.
Tax Advantages: Contributions are tax-deductible, reducing taxable income.
Compounding Benefits: Early investment grows your fund through compounding.
Encourages Saving Habits: Promotes financial discipline and better money management.
Diverse Investment Choices: Offers various investment options to match your goals.
Protection for Loved Ones: Includes life insurance benefits for dependents.
Enhanced Coverage with Riders: Enhance retirement plans with riders like critical illness or accident disability coverage.
Steady Cash Flow Post-Retirement: Pension plans create an annuity for a steady cash flow after retirement.
Guaranteed Income for Daily Expenses: These plans provide guaranteed income to cover daily expenses.
Retirement planning is the process of preparing your finances for the retirement stage of your life. It involves setting goals, estimating your income needs, and taking steps to accumulate and manage funds to support those needs throughout your retirement years.
Define Your Goals: You need to set clear goals for your retirement, like your house, your place of residence, your car, daily lifestyle, etc.
Estimate Your Income Needs: Calculating your estimated monthly expenses post-retirement is important to maintaining your desired lifestyle.
Grow Your Retirement Fund: Retirement fund building means investing at the right age and time in investment options like ULIPs or mutual funds that help you grow your money and safeguard your retirement.
Manage Your Funds: Fund management and strategizing investments to maximize returns while minimizing risks are key factors to consider in pension or retirement planning.
It is crucial to start planning for retirement as early as possible to accumulate the desired corpus to maintain the lifestyle of your choice after retirement. Factors like healthcare, inflation, and lifestyle changes should be considered while planning.
A pension calculator is an online tool that helps in calculating the pension amount receivable by factoring things like your current income, savings, and expected retirement income in mind. The pension calculator requires details like:
Your Age
Current Monthly Expense
Your Retirement Age
Retirement or Pension planning is important for you for the following reasons:
Secure your future: Retirement planning makes sure that you are financially secure in your later years.
Beat inflation: Starting retirement planning early in your life allows your investments to grow and beat inflation in the future.
Reduce financial stress: Early retirement planning removes worries about money during retirement.
Enjoy retirement: With better planning, you can ensure a good lifestyle, and you can pursue your passions worry-free.
Take advantage of compounding: If your money is invested for a longer time, it will grow more through the compounding interest effect.
Prepare for unexpected expenses: You can build an emergency fund through early retirement planning.
Ensure independence: Retirement planning allows you to become independent and not be dependent completely on others or government support.
Leave a legacy: With proper planning you can leave behind a financial legacy for your loved ones.
Following are the factors to be kept in mind to estimate the amount needed post-retirement:
Start Early: It is to plan as early as possible. If you start in your early 20s, you will have more time to build a good corpus at the time of retirement.
Set a Goal: It is important to set aside a good percentage, say 15%-20% of your total earnings, for your retirement.
Target your lifestyle: Keep in mind the lifestyle you want to maintain after retirement and plan accordingly.
Account for Inflation: Always keep in mind the growing inflation rate while planning your retirement. The cost of living will go up every passing year.
Diversify Investments: Never put all balls in one pool. Always diversify your investment across different asset classes to reduce risk.
Save Consistently: Maintain the habit of savings, not just for 1 day but till the time you are earning.
Use a retirement calculator or pension calculator: A pension plan calculator is a helpful tool that will help you plan your investments better.
Review and adjust: Keep on reviewing your investments from time to time. As age grows, so do personal goals.
| Criteria | Pension Plan | Saral Pension Yojana |
| Entry Age | 18 years and above | 40 years |
| Type | Various types (e.g., traditional, unit-linked, NPS) | Immediate annuity plan |
| Flexibility | High, multiple plan options available | Low, standardized structure as per IRDAI |
| Premium Payment Options | Regular, Single, or Limited pay options | Single premium payment only |
| Maturity Benefits | Lump sum and annuity options | Lifelong pension only, no lump sum |
| Guaranteed Returns | Some plans offer guaranteed income, others are market-linked (ULIP-based). | Guaranteed lifetime annuity. Returns are not linked to the market. |
| Annuity Options | Offers various annuity options | Offers 2 options |
| Aspect | Pension Plans | PPF | NPS |
| Type of Scheme | Insurer pension plans | Government savings | Government pension |
| Purpose | Retirement savings with life insurance. | Retirement savings. | Retirement savings. |
| Returns | Market-linked returns | The fixed interest rate set by the government. | Market-linked returns based on investments. |
| Tax Benefits | Tax benefits under Section 80C and 10(10D) on premiums and returns. | Tax exemption on investments, interest, and withdrawals. | Tax benefits on contributions, returns, and withdrawals. |
| Lock-in Period | 5 years | 15 years, partial withdrawals after 6 years. | Until retirement age (60 years), partial withdrawals are allowed. |
| Flexibility | High flexibility. | Partial withdrawals, loans available. | Flexible contributions, investment options, partial withdrawals. |
| Annuity Options | Various annuity options are available. | No annuity, lump-sum withdrawal, or extension. | Choice of annuities upon retirement. |
| Regulation | Regulated by IRDAI. | Governed by the Ministry of Finance. | Regulated by PFRDA. |
To buy a retirement plan, you'll want to start by finding out about your financial goals then, follow these steps:
Step 1- You can check retirement plans on this page or through the Policybazaar homepage.
Step 2-Check the features and premiums of different plans to find the fit for you.
Step 3-Pick and choose the most suitable plan that aligns with your goals and needs.
Step 4-Think about adding on features or adjusting coverage if needed to modify the plan according to your situation.
Step 5- Make your payment online and receive confirmation about your retirement plan.
Pension plans play an important role in securing your financial stability during your retirement. years. With so many options available you can choose and modify the one that meets your financial needs and ensures you live a comfortable life after retirement.
†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 based on past 10 years’ fund performance (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
*All savings are provided by the insurer as per the IRDAI approved
insurance plan.
# The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
^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.
¶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
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
Tata AIA
Max Life
Bajaj Allianz
SBI Life
HDFC Life
ICICI Prudential
Edelweiss Life
Kotak Life
Future Generali
PNB MetLife
Aditya Birla Sun Life
Aviva
Ageas Federal
Bandhan Life
Canara HSBC
IndiaFirst
Pramerica Life
Reliance Life
Sahara Life
Shriram Life
Star Union
23 Oct 2024
A Single Life Annuity provides regular payments for the lifetime
19 Sep 2024
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