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How to choose the right pension plan?

 
 

Choosing the right pension plan is a crucial step in one’s lifetime. In order to ensure a secure future for you and your family after you stop working, it is a must to go for the right pension plan. Particularly in Indian households, pension schemes have been given a high priority from a long time ago. Jobs were often chosen on the basis of whether a pension will be offered or not. Following the same footsteps might not be such a bad idea.

There are several things you should keep in mind when investing in a pension plan. It is a good idea to start off early, as the earlier you start, the better the returns will be in future through the power of compounding. Also, there will be little burden on your shoulders in the latter years of your life. Equities should be given a particular place in your pension planning, as the returns in the longer term are generally better than other asset classes.

Also, it is advisable to invest in a diverse range of assets. Fixed deposits, bonds, and gold to name a few. Smartly choosing between these can go a long way in achieving your post-retirement plans. It is quite common to be under the impression that PPF or EPF are going to be enough for a smooth ride post retirement. This, however, is far from the truth.

Some of the critical elements that you must consider while choosing the right pension plan are as follows:

  1. Does the plan allow you to save systematically for a long term and flexibility to choose your retirement or vesting age?
  2. Does the plan offer some minimum guarantee of the principle that you invest?
  3. Does the plan allow you to invest in equities and debt in a balanced manner?
  4. As it is important to plan for the retirement for you and your spouse, an ideal retirement plan should also offer you the option of purchasing additional life cover.
  5. With increase in income, you must ensure that the monthly savings you do towards your retirement should also increase every year in a systematic manner. Ideal retirement solution should provide you the option of increasing your savings in a systematic manner.

Apart from these, it is also important that you choose a plan with a suitable annuity option. There are several options to choose from. Keep out an eye for the kind of cost of investment, and choose the most suited plan that provides you all the critical elements. Max Life Insurance has some great retirement and pension solutions available. It would be a good idea to check those out as well.

A financial planner could be hired in case if the confusion mounts for you. However, doing a bit of homework before you take the plunge should do the trick.

Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and Forever Young Pension Plan(UIN: 104L075V02)is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. Past performance of the funds does not indicate the future performance of the funds. You may be entitled to certain applicable tax benefits on your premiums and policy benefits. Please note all the tax benefits are subject to tax laws prevailing at the time of payment of premium or receipt of benefits by you. Tax benefits are subject to changes in tax laws.

 
 
 

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