Retirement planning – the earlier, the better
//Retirement planning – the first step towards your best financial life//
When it comes to retirement planning, the importance of early investing has always been stressed upon. The reason is simple enough – it doesn’t matter how robust your pension plan is, you need a considerable corpus for planning your retirement. If you start early, the possibility of creating such a corpus increases.
When planning a retirement corpus, the importance of time is emphasized for two main reasons. They are as follows –
Compounding of returns
Almost all types of investment avenues give compounded returns on your investments. Compounding means earning returns on the returns that you have already earned. For example, say you invest Rs.1000 for 2 years @10% interest. After the first year, the interest would amount to Rs.100. In the second year, the interest of 10% would be calculated on Rs.1100, i.e., Rs.1000 + Rs.100 interest earned last year.
Compounding, therefore, multiplies your returns year after year. So, when you give compounding time, your returns can increase exponentially, creating a considerable corpus. This is exactly the mechanism that retirement plans in India attempt to bring into play.
Thus, when planning for retirement over a long-term horizon, the compounding returns can give you a substantial corpus. This is why you need to start early so that you have the longest possible investment horizon.
Let’s face it – your income might be a limited resource. After paying for your expenses, you get the disposable income that you can invest towards your financial goals. Besides retirement, you might have other financial goals, like your child’s education, buying a house and/or a car, etc. So, you need to allocate your disposable income in such a manner that all your financial goals are fulfilled.
When you start retirement planning early, you have the benefit of compounding, which enhances your returns. Thus, you can regularly make do with small amounts of savings to create an optimal retirement corpus. This ensures that investment towards other financial goals is not hampered, and your retirement fund is also created at the same time.
These two reasons necessitate planning for retirement from an early stage of your life. Don’t wait to start retirement planning. Start the process as soon as you can!
Having financial security post-retirement
Retirement planning is a two-pronged process. Besides creating a retirement corpus, you also need to make sure that the corpus is utilized in the best possible manner through optimized retirement plans.
You create a retirement corpus to fund your expenses after retirement. So, you need to ensure that your corpus does just that. One way to ensure the proper utilization of your retirement corpus is by investing in Aviva Saral Pension Plan.
Aviva Saral Pension Plan – security for your retirement
Aviva Saral Pension Plan is a pension scheme in India that is structured as an immediate annuity plan. When you invest your retirement corpus into the plan, it guarantees lifelong, fixed pension payments. Thus, Saral Pension Plan creates a source of guaranteed income in your old age, ensuring that all your financial needs are met.
Here are some of the salient benefits of Aviva’s Saral Pension Plan –
Security for you and your spouse
Aviva Saral Pension Plan offers single as well as Joint Life annuity. While single-life annuity pays pensions over your lifetime, under joint life annuity, you can secure your spouse’s source of income too. Joint Life option pays the annuity for as long as either you or your spouse is alive. This makes sure that even when you are not around, your spouse would be financially independent.
You pay a lump-sum single premium and the plan starts paying annuities immediately. You can choose to receive the annuity payments yearly, half-yearly, quarterly, or monthly as per your financial needs.
Loans for big expenses
Unlike other pension plans in India, a unique feature of the Aviva Saral Pension Plan is the availability of loans. Six months after buying the plan, you can avail loans for unexpected expenses.
Financial aid during an illness
If you or an immediate family member suffers from a critical illness, Aviva Saral Pension Plan offers liquidity; You can surrender the plan as early as 6 months from the date of purchase of the plan and get 95% of the purchase price (premium) refunded.
A lump sum benefit on death
In case of death, the plan refunds the premium paid,allowing you to leave behind a legacy for your loved ones.
So, plan for your retirement from an early age and then invest in Aviva Saral Pension Plan for a lifelong income.