Types of Retirement Plans in India

Without a sturdy retirement plan, it is impossible to lead a happy and fulfilling post employment life. Besides the employer-induced pension plans sometimes it may become necessary to invest in an additional schemes that adds to what you stand to gain when your job situation ends. It is necessary to remember that one simply cannot work throughout their lives. There comes a time eventually when one has to call it quits. What is there to fall back on during this time? Ask yourself this question and then choose a best pension funds in India that offers a complete peace of mind.

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Disclaimer: ##Rs 60,000 are the monthly pension amounts at the assumed rate of return of 8% p.a. and 4% p.a. for unit linked insurance plans. This is an illustrative example and the returns are not guaranteed & dependent on the policy term and premium term availed along with the other variable factors. The market linked return of 60K per month is for an 18 year old investing 6k per month for 20 years in a whole life policy having policy term 82 years in which Systematic partial withdrawals start at the age of 65 years at 5% rate of withdrawal per year. The investment risk in the policy is borne by the policyholder. All Plans listed here are of insurance companies’ funds. *Tax benefits and savings are subject to changes in tax laws. All Plans listed here are of insurance companies’ funds. Disclaimer: #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 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

Some of the types of plans available include the following.

Retirement Plans by default

When it comes to retirement plans by default the very first option that springs to mind is the provident fund. Here, the organization where you are employed forces you to deduct definite sums of money on a regular basis. This type of forced savings helps you to reap the benefits in your advanced years. The Central Government in India offers a contributory PF for the employees where the government contributes the exact sum you save every month.

Employees working in a single concern for over five years become eligible for gratuity. The gratuity bonus depends upon the last salary you draw as an employee in an organization. Leave encashment is another benefit you can get post retirement from the concern you work for presently.

Government Plans

There are safe government plans, which individuals can choose in order to ensure a financially well-protected post retirement life. One of these is the Monthly Income Scheme (MIS). This comes with a high rate of interest at over eight percent. Then there is the Senior Citizen Savings Scheme (SCSS) with a nine percent annual interest. PPF scheme is another option for those interested in opting for a safe retirement planning.

Other Retirement Plan Options

Opening up a savings bank account is a good way to keep aside money for the post retirement scenario. You can get interest ranging from 4% to 7%. Fixed deposits in banks can allow your money to grow steadily at 3-10% interest rates and thus offer a viable plan to individuals. Mutual funds are another option, which offer a safe way to help your money grow on a long-term basis.

With so many available options, it is not going to be difficult to find a retirement plan that works wonders in your case. Turn your post job period into the Golden Years of your life with a reliable scheme that not only provides a regular source of income but also helps you to tide over the bad phases that invariably come up, especially during the advanced years. Retire gracefully and confidently with a sturdy plan that WORKS!

†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 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.
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^^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.