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When is the Right Time to Invest in Retirement Plan

 
 

Retirement is said to be the golden period of your life. It is the time when you are free from responsibilities and worries. However, retirement without pension means loss of steady source of income. To ensure that you do not end up becoming dependent or find yourself penny-pinching in this golden age, it is prudent to keep the money flowing in by timely investment in the pre-retirement period.

With numerous retirement plans presented by insurance companies such as MaxLife, it has become quite easy for a person to plan these golden years of life in advance. However, zeroing down on the right age to start investing in retirement plans is an impelling question that bothers us all.

Experts say that the right age to invest in retirement plan is now. The early you start investing, higher will be the benefits that you will be able to avail at the time of retirement, yet many individuals are known to wait until their 40s to start with retirement planning.

Following are the different age brackets that will give you a basic idea about how to go about retirement planning in different age-groups:

  1. In the 20s

    Retirement is the last thing on mind in your 20s. However, it should not be neglected. As you will have fewer responsibilities and debts in this age, a major part of the income will remain unutilized. Start by investing in Fixed Income plan, Savings plan, or Life Insurance plans with investment benefit to get assured returns at the time of retirement. As you start early, you will be able to collect a larger investment corpus, thereby getting higher returns.

  2. In the 30s

    People in their 30s are generally married and have just started a family. Responsibilities of kids and liabilities such as home loans, car loans, and future investment plans are prevalent. Keeping in mind these obligations, you have to start investing in options with moderate risk. At this age, you should also opt for term plans to secure your family's future when you are not around anymore. This plan will be helpful in paying the existing debt and sustain the basic financial needs of your family.

  3. In the 40s

    Forty is the standard age where individuals start planning for retirement on a serious note. At this age, most of the long-term debts are covered. However, you will have very short period to plan your investment. Thus, retirement plan with equity elements for building a large corpus is recommended. Such retirement plans will offer dual advantage of death benefit and guaranteed pension after you retire.

  4. In the 50s

    Fifty is the prime age when it comes to retirement planning. Though your long-term debts are covered, you might face several health risks that account for additional expenses. At this time, you cannot think of taking risks with investments, so market-linked policies are to be avoided. By investing in a traditional, non-linked annuity plan, you can safeguard your post-retirement life by having a guaranteed regular stream of income after you retire.

Having understood the different age brackets for retirement planning, it is never too late to plan your retirement. So start investing today in retirement plans to have a bright post-retirement life.