Importance Of Retirement Planning

Every person at some stage of his career starts thinking of when he wants to retire

. With this, the next thought that follows is that of retirement planning. When a person is young and healthy, the idea of retirement planning may sound irrelevant to him; but if not done in time, it can prove to be fatal.

Some of the most important things to know about retirement planning and why it needs to be done are mentioned below:

Start the planning process as early as possible because the sooner you start, the bigger the corpus you create for yourself and in this process, give the power of compounding a chance to provide you higher returns.

Medical expenses during retirement period may prove to be very expensive. Sometimes, the medical cover may not completely cover the illness which may force you to liquidate your assets!

Planning your retirement is crucial, as India does not offer any social security net.

It is important to start with a small amount and then gradually increase the contribution towards this investment. Also, one needs to resist the temptation of withdrawing any amount from this fund.

One of the most important and effective investment products in this regard is Pension plans, also known as retirement plans or annuity plans. These plans are specially designed by life insurance companies, to help people build a retirement corpus. Under these plans, a person has to either invest a lump sum amount or in regular installments, over a period of time in return for a regular income, either for a fixed number of years or for life, depending on the nature of the plan.

Investing in a pension plan will ensure a fixed income, at a stage when you need it the most, as chances are you may not be actively be pursuing a profession to earn regularly. Also, it will give you the freedom to pursue a hobby, travel with your loved ones, etc. This is bound to relieve you psychologically, and ensure peace and happiness during your retirement period.

It is extremely important to understand that retirement planning requires a lot of discipline and dedication. It is an ongoing process and not an end in itself. So, plan your retirement and gift yourself a beautiful future!

by: Sudeep Desai

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