Top Reasons why Retirement Planning is Important | Aviva India Skip to main content

4 reasons why Retirement Plans are a must buy

Everyone likes to enjoy financial independence in working as well as retired phase of life. A Retirement plan focuses on taking care of the financial expenses in the post-retirement phase with the help of accumulated funds. A regular premium retirement plan builds a financial corpus, which would be utilized to give you pension money to enjoy the same financial independence in the post-retirement phase as well.

The retirement plan also offers a death benefit to the family in case of an unfortunate and untimely demise of the life insured. The retirement plan consist of two phases which are the Accumulation phase (where you pay regular premiums to create a corpus) and the Distribution phase (where you consume the accumulated corpus in the form of a pension).

Here are some solid reasons why pension plans are a must-invest:

· Inculcates a Savings Habit

A retirement plan is a dedicated plan to accumulate a corpus that would take care of the post-retirement finances also known as pension plans. A retirement plan ensures that you pay the premiums timely to keep your retirement plan active. Regular allocation in the form of premium ensures you save the requisite amount periodically to gift yourself a worry-free and financially capable retirement.

The earlier you start accumulating for your retirement corpus, the more robust corpus you can build.

· Gain from Compounding

Compounding is a brilliant way to build wealth in the long term. Compounding implies generating earnings on your previous earnings. The more time you give to your investments, the power of compounding will enable it to grow bigger and larger. Retirement plans will offer you the option to invest in the form of a premium and build a retirement corpus with the power of compounding. The longer you stay invested, the larger you are likely to create your retirement corpus.

· Offers a Flexible and Scalable Investment Plan along with Insurance

A retirement plan is a combination of investment plus insurance plan. It is a special category of insurance plans which are designed to meet the post-retirement financial needs. It offers you the platform to accumulate your savings to build your retirement corpus.

Pension plans range from traditional to a unit-linked retirement plan. Based on the risk capability of the investor one can choose the investment portfolio ranging from aggressive to balanced to conservative. It allows you to build your retirement corpus along with ensuring financial protection for your loved ones. With an increase in income, one can also increase the savings in the form of a top-up premium under unit-linked retirement cum insurance plan.

· Safeguards the Interests of Loved Ones

Your life is precious for your loved ones and especially if you are the sole bread earner of the family. During your working years, you ensure that you save enough to meet the short term and long term financial goals of your family.

Along with the investment, the retirement plan enables you to safeguard your dependents financially with its insurance component. In the event of an unfortunate demise of the life insured, the nominee is compensated with the accrued death benefit.

Best retirement plans offer you ample flexibility and good returns to accumulate a concrete retirement fund to live life independently with no financial dependence.

AN Jan 49/18

Talk to an Expert

Leave a Reply

Add new comment

Filtered HTML

  • Web page addresses and email addresses turn into links automatically.
  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.