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Pension Plans: How Much Would You Need Post Retirement?

 
 

They say “life is a meal and retirement is the dessert.” This is the time you are to toss aside all of your life’s mundane worries and responsibilities as you embrace your post-retirement heydays. Many people believe that life begins after retirement, deeming it as the golden age of life.

Well, retirement does leave you with ample of time to pursue your hobbies, engage in recreational activities, or realize that long-standing dream of travelling the world. However, knowing that you will not have your day job any longer, you are going to be deprived of your regular source of income. Sufficient funds are necessary to enjoy the post-retirement years in comfort and leisure. For that purpose, it is necessary to take prudent investment decisions during your working days.

Retirement planning through investment in pension plans helps to maintain financial security once your regular income (through day job) starts to ebb. Life insurers such as MaxLife provide pension plans that offer combined advantage of maturity as well as death benefits, thereby securing the financial future of your loved ones and you post-retirement.

Choosing the right kind of pension plan to avail an uninterrupted source of income even after retirement can be exhausting. You are required to do extensive research for choosing the right scheme, zeroing down on the exact premium amount, planning the pay-out interval, and other investment-related information for getting adequate pension to make ends meet even after retirement.

Though many of you may be able to select the best pension plan, zeroing down on the pension pay-out is yet a taxing issue that involves financial expertise and professional aid. To simplify this, we have provided tips to calculate the approximate amount of funds you will require post-retirement.

Determine the Basic Living Expenses:

The pension received should be sufficient to cover the basic expenses of living each month after retirement. Your future expenses can be determined by assessing the extent of current expenses. To get the exact figure, you should take into consideration housing costs, utility payments (such as water, electricity, and gas), food and clothing expenditure, transportation cost, and other sundry expenses that might incur after retiring.

Take Inflation into account

Inflation will creep in with years and make goods and services dearer, raising the cost of living each year. The current inflation rate in India is around 4%; it will rise every year. In accordance to the inflation rate, the pension pay-out should rise. Otherwise, the received amount will not be sufficient to meet expenses, thereby forcing you to seek financial aid when you are not working anymore.

Plan for Health Insurance

Healthcare costs are rising at an alarming rate. To avoid the impact of such unexpected medical expenses on your monthly budget post-retirement, it is recommended to avail a health insurance plan during your working years. This plan will provide financial safeguard against uncalled medical expenses, thereby not putting a load on your regular expenditure budget after you retire. Avail a health insurance plan for both you and your spouse (or any other dependants in the family) to prevent such untoward eventualities.

Consider Recreation costs

Be it a short trip to your native place or a longing pursuit of old interest, retirees often find themselves tempted to engage in travel or hobbies to pass their free time. However, all these perks come at a cost, which needs to be settled from the pension amount itself. To cover such costs effectively, you should meticulously set aside some amount from your pension.

These tips will help you get a grasp of the right pension amount required to enjoy the post-retirement years comfortably. Choose a pension plan wisely after carefully perusing it and secure your old age today.

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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